For a long time, Erin Callan was considered one of the most powerful women on Wall Street.

Somehow, a controversial stint as CFO of Lehman Bros. shortly before its collapse hasn't helped that status. After being pushed out of Lehman, she joined Credit Suisse, but in February of 2009, five months after joining, she went on a leave of absence for unspecifiied personal reasons.

Oh how the mighty have fallen.

With Lehman Bros. in the midst of winding up what's left of its operations following its bankruptcy filing, chairman and CEO Richard Fuld has been kicked out of the corner office at Lehman's Manhattan headquarters -- and sent packing to to a 41st floor office at 1271 6th Avenue.

Lehman's building at 745 7th Avenue is now the headquarters for Barclays' investment banking operations. It has no use for Mr. Fuld. With a flair for drama, The Wall Street Journal sums it up (subscription required) this way: "Napoleon cooled his heels on Elba. The Dalai Lama lives in Dharamsala, India. And Lehman Brothers Holdings Chairman and CEO Richard Fuld Jr. will be banished to 1271 Sixth Ave."

Meanwhile former CFO Erin Callan -- who was pushed out as a sacrificial lamb back in July -- gave her first post-Lehman interview to Fortune, telling the reporter that Mr. Fuld had been brought to tears by the difficulties the company was facing.

If you're in the market for $15 million worth of Fuld's modern art collection, Christie's has got you covered.

According to reports, Erin Callan, the charismatic CFO of Lehman Brothers Holdings (NYSE: LEH) is out of a job. So is Lehman's chief operating officer, Joseph Gregory.

As Charlie Gasparino reported for CNBC, "Callan and Gregory are leaving the investment bank, which has been under fire from its weak earnings performance and speculation that it will need to raise billions in capital to stay afloat, has seen its shares under intense pressure." Reuters reports that Herbert McDade will succeed Gregory, and Ian Lowitt will take over for Callan -- will become a senior investment banker at Lehman. I will discuss this at noon on Fox Business.

The market seems to hate the news -- with Lehman shares down 7% in premarket trading. Will the people who replace Callan (Lowitt) and Gregory (McDade) be so much more talented that they can extricate Lehman from its short- and long-term problems? Who knows how deep its writedowns will be in its Level 3 assets or how it will make money in the future, given that its core business of asset-backed securities has dried up.

Maybe these ousters make it a more obvious acquisition target. But they just look like sacrificial lambs on CEO Dick Fuld's altar to me. And they signal very deep problems to investors.

[This post has been recently updated to add more information as it was reported]

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Lehman securities.

Bloomberg News reports that Lehman Brothers Holdings (NYSE: LEH) wants to sell $4 billion in equity. But it already raised $6 billion so why does it need more? It should be no surprise -- but thanks to a chorus of statements by financial leaders that "the worst is over" -- including Lehman's CEO Richard Fuld, Jamie Dimon, Hank Paulson, and Barton Biggs some are surprised that there are still problems.

Since the crisis began -- last August when the Fed began cutting rates from 5.25% to 2% -- banks have been trying to reduce their ratio of debt to equity below the hugely risky 32:1. But it's hard when they hold $500 billion worth of Level 3 assets -- which don't trade and therefore have no objectively set market value. To maintain or improve their capital ratios, banks have been writing down the value of the securities on their books -- $276 billion worth so far -- and simultaneously raising capital. Citigroup (NYSE: C) has raised the most -- $44 billion.

S&P downgraded Lehman, Morgan Stanley (NYSE: MS) and Merrill Lynch (NYSE: MER) saying they may disclose more write-downs for devalued assets. And hedge fund manager David Einhorn -- who's short Lehman -- got into a verbal debate with Lehman CFO Erin Callan arguing that Lehman had failed to disclose $6 billion worth of such Level 3 assets -- known as Collateralized Debt Obligations (CDOs) and it needed to raise capital. Today's announcement suggests that Einhorn was right.

Just because executives act like cheerleaders, it doesn't mean investors should take them at their word.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup shares and has no financial interest in the other securities mentioned