There has been concern for several weeks that Lehman Brothers (NYSE: LEH) might have problems similar to Bear Stearns (NYSE: BSC). Customers might be worried about Lehman's financial health and, if they were to withdraw large sums of money, the brokerage could face liquidity problems.
Just as those concerns appear to be falling, Lehman has been hit by a fraud that may involve amounts as great as $250 million.
According to The Wall Street Journal (subscription required), "swindlers used forged documents from one of Japan's biggest trading companies to bilk it out of as much as $250 million." The money was to go to a division of Japanese firm LTT Bio-Pharma. The capital was secured by certificates from Marubeni, a huge trading company. Marubeni may have to pay Lehman back the capital, but that is not yet clear.
One consequence of the news is likely to be that investor confidence in Lehman will be eroded again. Why the brokerage would extend the money without complete due diligence is certainly a fair question for shareholders to ask.
One more straw on the pile of Lehman's troubles.
Douglas A. McIntyre is an editor at 247wallst.com.
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