Executives ousted at Lehman Brothers

Earlier this week, Lehman Brothers, announced it plans to raise $6 billion (£3 billion) via a rights issue in a bid to shore up its balance sheet.

The smallest of the major Wall Street investment banks has seen its shares slump by over 50% on fears about its exposure to the sub-prime mortgage market.

Yesterday, the US bank announced it was to part company with Erin Callan, chief financial officer, and Joseph Gregory, chief operating officer.

Chief executive, Richard Fuld, said ousting the two executives was one of the most difficult decisions of his career.

Ian Lowitt, the bank’s chief administrative officer is to replace Ms Callan, while Bart McDade, the bank’s global head of equities, will replace Mr Gregory.

Pressure has been mounting on Ms Callan following the bank’s funding call after she insisted that it did not require additional funding.

It is believed Ms Callan will return to a job in Lehman Brothers’ investment banking arm.

It has not been confirmed whether Mr Gregory will stay with the bank. He has been with the bank for over 30 years. Mr Fuld said Mr Gregory had been a driving force behind who we are today and what we have achieved as a firm.

Shares have fluctuated over recent weeks after concerns that it could face the same fate as Bear Stearns, which was rescued by JP Morgan Chase. Bear Stearns ran into trouble over its sub-prime mortgage debts and other banks stopped lending to it.

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