Lehman Brothers Holdings Inc shook up its management Thursday June 12, with its Chief Financial Officer and Chief Operating Officer forced out following $3 billion quarterly losses.
CFO Erin Callan and COO Joseph Gregory will leave their positions just days after the investment bank announced the huge loss.
Shares of the investment bank slumped to a near record low this past week and Lehman has moved to soothe Wall Street anger.
Investors have been understandably shaken since the nation's fourth-largest investment bank said Monday that it needed $6 billion of fresh capital to offset huge losses - the first since the company went public in 1994.
There has been a steady stream of market speculation that big customers might flee Lehman on concerns about the investment bank's health. Those fears were compounded by the near-collapse of Bear Stearns.
Changes
Callan will remain in Lehman’s investment banking division, where she previously ran a group that catered to hedge funds before taking the CFO spot in September 2007 while Gregory will also stay in an as yet undetermined position.
His successor will be Herbert McDade who was previously the global head of Lehman’s equities division. Ian Lowitt, the current co-chief administrative officer, will become Lehman’s new CFO.
Upheaval
A lack of confidence in Lehman's leadership has been hanging over the company for weeks, and it was unclear if the management upheaval will be enough to satisfy critics. These changes will take place immediately.
Lehman’s share price slid upon breaking of the news, adding to an already long list of woes. The company has been under intense pressure recently as investors question the firm's capital position and its transparency amid the ongoing credit crisis.
Lehman would not comment on the changes.
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