The 2008 global financial meltdown witnessed most of the top global financial institutions crumble into liquidation and bankruptcy. The incident culminated in most of these firms either liquidated or experienced plummetion in returns. The failure of Lehman Brothers in the midst of the global financial crisis was the largest catastrophe to hit the financial industry in the United States. Notably, the leading US investment bank suffered huge losses within the month of September. Lehman’s stock price plummeted by 73% of its value in the first half of September alone and by the mid of September 2008, lost $3.9 billion in their attempt to dispose of a majority of their shares in one of their subsidiaries. To contribute to the body of knowledge, this paper investigated and reviewed the activities or transactions that resulted in the failure of Lehman Brothers. The findings revealed multiplicity of factors ranging from dubious accounting practices, unethical management practices, over investment in risky unsecured investments, laxity on the part of regulators. External auditors also played a major part in this failure by not detecting these financial statement malpractices by the Lehman managers. Policy makers such as the International Financial Reporting Standards (IFRS), Security and Exchange Commission (SEC), the Basel Accord etc, ought to initiate stringent policies to address Lehman failure to avert any future occurrence. Keywords: Financial meltdown, Liquidation, Bankruptcy, IFRS, SEC, Basel Accord.