Marconi (2010) believes that the role played by institutional investors propagated financial crises. Institutional investors, whether individuals or companies, benefit from the advantages of preferential regulation in terms of reduced commissions. This is due to their significant and professional investments. Institutional investors like mutual funds, pension funds, hedge funds like Magnetar Capital, and life insurance companies like AIG and investment trusts contributed to the global financial crises of 2007-2008. This financial crisis, also called the Great Recession, was triggered by liquidity problems in the U.S. economy. Many large financial institutions have collapsed according to Geczy (2010). The government had to bail out some banks, which led to a decline in investment in stocks and money market funds in the United States and spread around the world. A report by the US Financial Crises Commission shows that the notorious global crises could have been avoided. He stressed that the bankruptcy of various financial institutions, including the Federal Reserve, accelerated the crises. Lehman brothers; one of the three largest investment banks in the United States was implicated during the financial crises of 2007. The bank failed and had to be sold in September 2008 (Currie, 2010). The other two banks, Morgan Stanley and Goldman Sachs, had to become commercial banks where more regulation was put in place. The collapse of large and important financial institutions like Lehman Brothers spread economic crises. Investors withdrew more than $150 billion from U.S. money market funds two days after Lehman Brothers collapsed. This made money markets unstable, necessitating...... middle of document ......uest.com/Laurence B., 2010. Research Foundation Of Cfa Institute, ScuLeavey School Of Business Research Paper No 10 -04. Available at: Ssrn:Http://Ssrn.Com/Abstract=1523931Manconi, Alberto, Massa, Massimo and Yasuda, Ayako, 2010. The role of institutional investors in the spread of the 2007-2008 crisis. UC Davis Graduate School of Management Research Paper No. 04-10. Available on SSRN: Shefrin, Hersh M., 2009. How psychological traps generated the global financial crisis. Voices of Wisdom: Understanding Global Finance Quinn James, 2011. JPMorgan and Citigroup Helped Trigger Lehman's Collapse, Report Claims. Retrieved from: http://www.telegraph.co.uk/finance/financialcrisis/7424849/JPMorgan-Citigroup-helped-trigger-Lehman-collapse-report-argues.htmlValuka Anton RS, 2010. Retrieved from: http:// lehmanreport.jenner.com/VOLUME%205.pdf