In the first of a five-part series, Yalman Onaran and John Helyar of Bloomberg chronicle the demise of investment bank Lehman Brothers and the fall from grace of its leader, Richard Fuld.

It was the afternoon of September 9, and tensions were rising in the 31st floor office of Lehman Brothers Holdings' chief executive officer Richard Fuld.

That morning news broke that the Korea Development Bank had pulled out of talks to buy a stake in the New York-based securities firm. By 1 pm, Lehman's already battered stock had plunged another 43 per cent.

Fuld was rat-a-tatting orders to associates seated at a table in his corner office.

Herbert "Bart" McDade, installed as president in June, vice-chairman Thomas Russo and chief financial officer Ian Lowitt had been in and out of Fuld's lair all morning.

Now the CEO was staring daggers at responses he deemed too slow or too fuzzy to help right his listing ship, said a person familiar with events that day. And he was lashing out at the injustice of it all.

"Here we go again," Fuld erupted at one point, the person recalled. "Perception trumping reality once more."

It was vintage Fuld, a man so physically imposing, so volcanically explosive that, even at age 62, he scared underlings and competitors alike.

He was raging on the captain's bridge, while a storm engulfed the company he had willed into becoming one of Wall Street's finest.

Couldn't the short-sellers see how much he had done to shed bad assets? Couldn't they understand what a great franchise it still was?

Fuld was grounded enough in reality to know one thing: "We've got to act fast," he said, "so this financial tsunami doesn't wash us away."

Six days later - 158 years after its founding as a cotton brokerage in Alabama - Lehman Brothers was gone. Treasury Secretary Henry Paulson said he didn't want to use taxpayer money to save Lehman, as the Government had done in March when it pledged US$29 billion ($50.5 billion) to facilitate the sale of failing Bear Stearns to JPMorgan Chase.

Federal Reserve Chairman Ben Bernanke insisted there was nothing the Government could have done in the end, even though Fuld had warned that Lehman's collapse could trigger a financial Armageddon.

Fuld's failure to save Lehman, after rescuing it three times before, is a story about how the most indomitable man on Wall Street became addicted to leverage and intoxicated with the power it brought.

It is a tale about the inability to repair a financial model wrecked by a lack of limits and transparency, a story pieced together from interviews with former Lehman executives and outsiders familiar with the firm.

Isolated, surrounded by acolytes and unaware of the rivalries tearing his firm apart, Fuld was too prideful to accept the fast-eroding value of the empire he had built, too slow to cut a deal.

The end came after months of frantic activity to find a solution - reaching out to, then spurning an offer from Berkshire Hathaway chairman Warren Buffett; meeting executives of banks on three continents, devising a last-ditch plan to spin off Lehman's toxic assets; and pleading with government officials.