Examples of Lehman Entity in a sentence
If secured financing was not available, LBHI would directly finance the Lehman Entity with unsecured intercompany loans.
As such, corporate formalities and the legal separateness of each Lehman Entity were disregarded as a means to achieve greater efficiencies for Lehman Brothers as a whole.
Based on the nature of the trade and its underlying instrument, LBI traders booked trades in the Lehman Entity predesignated by Lehman Brothers’ central management to carry such trades for legal, tax or regulatory reasons.
Lehman Brothers also engaged in hedging activities to control market and credit risk of the Lehman Group as a whole, and without regard to the market and credit risk profile of any specific Lehman Entity.
Consequently, Lehman Brothers freely transferred assets such as cash, securities holdings and other collateral from one Lehman Entity to another, as discussed below.
In other words, one market transaction executed by a Lehman Entity could spawn multiple downstream intercompany transactions necessary to settle the trade, hedge the risk and move collateral between affiliates in order to obtain financing.
In such a case, which is not only indicative of Lehman’s operational strategy but also indicative of what are believed to be hundreds of thousands of transactions between Lehman Entities, any attempt to view each Lehman Entity involved on a standalone basis would materially distort the economic reality of the transaction.
Accordingly, Lehman focused on hedging risk along business groups and product lines, not risk as it pertained to a specific Lehman Entity.
To implement such securities transactions, intercompany settlement processes were set up to generate trade tickets and accounting entries which had the effect of daily repurchase transactions (also referred to as a “repo”) or stock loans between LBIE or LBI and the booking-only Lehman Entity.
In such a case, which is not only indicative of Lehman’s operational strategy but also indicative of what are believed to be hundreds of thousands of transactions between LehmanEntities, any attempt to view each Lehman Entity involved on a standalone basis would materially distort the economic reality of the transaction.