Lehman Brothers Launches Lawsuit In Japan

Investment Bank Demands $350M From Japanese Health Care Company For Alleged Fraud

(AP)  Lehman Brothers filed a lawsuit against major Japanese trading company Marubeni on Monday, demanding US$350 million in damages in an unfolding case of alleged massive fraud.

Lehman Brothers Holdings Inc. is seeking to recoup funding it provided last year to a Japanese health care company. The U.S. bank says employees of Marubeni Corp. helped arrange the deal.

A Lehman Brothers official, who spoke on condition of anonymity citing policy, said the lawsuit demands 35.2 billion yen (US$350 million;). Other details were not immediately available.

The Tokyo District Court confirmed the lawsuit had been filed.

Marubeni Corp., which has repeatedly denied wrongdoing, said it has not yet seen the lawsuit and could not comment. It reiterated it has no obligation to repay the money.

Marubeni shares tumbled 6.6 percent in Tokyo to close at 726 yen (US$7.26), on pessimism set off by the fraud allegations, which surfaced over the weekend.

Lehman Brothers spokesman Matthew Russell said in a statement that there will be no financial impact on Lehman because of the merits of the lawsuit, appropriate reserves in the first quarter and insurance coverage.

The alleged fraud is the latest challenge for Lehman amid the global credit crunch. The sudden collapse of Bear Stearns earlier added to the concerns that Lehman and other investment banks may also face liquidity problems.

Tokyo-based Marubeni said in a statement the documents related to the funding were forged, and the transactions were not Marubeni's.

Two former Marubeni employees were duped by the then president of Asclepius, the now bankrupt unit of LTT Bio-Pharma, a medical consulting company, the trading company said.

Marubeni fired the two employees earlier this month after finding they had used an office meeting room illicitly. They had acted as individuals, not as Marubeni employees, the company said.

Marubeni also said an internal investigation had found the two employees had not been directly involved in the document forgery.

Both Lehman and Marubeni say they are cooperating fully with an investigation by the Japanese police.

LTT Bio-Pharma denied involvement in fraud in a statement Monday. It said it fired the president of the unit linked with the alleged fraud earlier this month.

[forthepeopl1]

let the"rumour has it that if bear stearns had been forced into bankrupcy they would have dumped their holdings on the market for a firesale price. this in turn would have forced the market price down on all the other mortgage backed securities ... thereby causing liquidity issues for other major holders of these depreciating instruments (ie. other large banks). other failures could have followed ultimately leading to a complete meltdown of the us economic system. this would not really be good for anyone."
posted by bobnjersy,

this should of happen period..if millions of good americans are being put on the streets because of these mortgage companys crime spree, than they also should of some pain, instead they were given billions of americans tax dollars to continue what they know best, take from the poor and give to the rich.

and today they were rewared some 15 million in compensation, countrywide, exectives, f-them,f-bush,and f- mr potatohead-paulson, that is conflict of interest being a former head of goldmansack,wallstreet hecks.
m go down just like all americans are.

[forthepeopl1]

"rumour has it that if bear stearns had been forced into bankrupcy they would have dumped their holdings on the market for a firesale price. this in turn would have forced the market price down on all the other mortgage backed securities ... thereby causing liquidity issues for other major holders of these depreciating instruments (ie. other large banks). other failures could have followed ultimately leading to a complete meltdown of the us economic system. this would not really be good for anyone."
posted by bobnjersy,

this should of happen period..if millions of good americans are being put on the streets because of these mortgage companys crime spree, than they also should of some pain, instead they were given billions of americans tax dollars to continue what they know best, take from the poor and give to the rich.

and today they were rewared some 15 million in compensation, countrywide, exectives, f-them,f-bush,and f- mr potatohead-paulson, that is conflict of interest being a former head of goldmansack,wallstreet hecks.