Lehman brothers posts first loss since going public

Losses and Lawsuits

NEW YORK - Lehman Brothers, the fourth largest US investment bank, has published a quarterly loss of $2.8 billion (£1.4 billion) - the first since the bank went public in 1994. Lehman blamed the loss on hedge funds and investments linked to subprime debt. The bank also announced that it is seeking a $6 billion capital injection to rebuild depleted assets, despite earlier claiming it would not require additional funding. Lehman has also demoted two executives, chief financial officer Erin Callan and chief operating officer Joseph Gregory, while the bank and its senior management are being sued in a shareholder class action lawsuit, accused of misleading investors on subprime exposure.

Lehman's shares have fallen 60% this year, which chief executive Richard Fuld described as an "unacceptable performance" that must not be repeated. The bank said it has now cut its exposure to residential and commercial mortgages and other property investments by 20%. More quarterly losses are now expected from Citigroup, Deutsche Bank, Credit Suisse and UBS. Goldman Sachs analysts estimate that UBS will write down a further $3.9 billion of struggling assets.

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