Why did Stephen leave Lehman?

Stephen Schwarzman left Lehman Brothers after an incident in which the trading department exceeded limits on certain securities, which resulted in significant losses that threatened the firm's equity. According to Stephen, the problematic trades and subsequent movement of interest rates could have nearly wiped out the firm's equity. To prevent Lehman Brothers from collapsing due to potential panic and loan recalls from lenders, the firm was sold to American Express. This decision was made in order to quickly bring in additional capital or provide a larger institution's guarantee for the balance sheet 1.

Stephen Schwarzman, along with Pete Peterson, later started Blackstone on October 1, 1985, after leaving Lehman Brothers 1.