Two top operating officers of Lehman Brothers resigned this morning.
Erin Callan, the CFO, has resigned. She is reported to be returning to investment banking. She was noted on Wall Street for her frankness and credibility. She was involved in some controversy in her handling of David Einhorn and the Lehman short sellers.
Joseph Gregory, the President and COO, is also reported to have resigned and will be leaving the company to pursue other interests. He had been the president since 2004. He has been with Lehman for 34 years.
They will be replaced by Lowitt and McDade respectively. Details to follow.
The stock dropped sharply on the initial news reports trading down to $22, three days after a secondary offering at $28.
LEHMAN NAMES HERBERT H. MCDADE III PRESIDENT, COO
(The following is a reformatted version of a press release issued by Lehman Brothers and received via electronic mail. The release was confirmed by the sender.)
HERBERT (BART) H. MCDADE III NAMED PRESIDENT AND CHIEF OPERATING OFFICER
IAN LOWITT NAMED CHIEF FINANCIAL OFFICER
NEW YORK, June 12, 2008 -- Lehman Brothers, the global investment bank, today announced that Herbert (Bart) H. McDade III will succeed Joseph Gregory as president and chief operating officer of the Firm, and Ian Lowitt will succeed Erin Callan as the Firm's chief financial officer. Mr. Lowitt will join the Firm's Executive Committee. These management changes are effective immediately.
"Bart, who has been my partner for 25 years and has proven himself to be the Firm's best operator, is the right individual to take on this responsibility and lead the Firm to the next level. His experience in both Fixed Income and Equities Capital Markets will benefit the Firm, especially during these challenging times," said Richard S. Fuld, Jr., Lehman Brothers' chairman and chief executive officer.
"Joe has been my partner for over 30 years and has been a driving force behind who we are today and what we have achieved as a Firm. This has been one of the most difficult decisions either of us has ever had to make," Mr. Fuld continued.
Ms. Callan, who has served as the Firm's chief financial officer since December 2007, will be rejoining the Investment Banking Division in a senior capacity.
