On July 31, 2008, Labaton Sucharow’s client City of Edinburgh Council as Administering Authority of the Lothian Pension Fund (“Lothian”) was appointed Co-Lead Plaintiff, along with four other foreign and domestic pension funds, in a class action filed in federal court in the Southern District of New York on behalf of a class of investors who purchased or acquired the common stock of Lehman Brothers Holdings ("Lehman" or the “Company”) between September 13, 2006 and June 6, 2008 (the "Class Period").

The complaint alleges that during the Class Period, Lehman and certain of its officers misrepresented the Company’s exposure to and losses from mortgage-backed assets and real estate investments – particularly those tied to subprime residential mortgages – and, consequently, overstated the Company’s earnings.

As numerous mortgage lenders (who issued the very loans that backed Lehman’s investments) fell into bankruptcy, and the Company’s peer’s acknowledged massive losses from their own mortgage-backed investments, Lehman insisted that its sophisticated hedging strategies insulated it from such risk.

After numerous inconsistencies in the Company’s public statements led to increasing questions from investors and analysts, Lehman acknowledged that it had incurred losses of $2.8 billion from investments tied to mortgages and real estate. The $2.8 billion write-down was nearly ten times the loss analysts had anticipated, and followed write-downs of $3.7 billion to mortgage-backed assets and real estate investments. The Company also revealed that it raised $6 billion in capital – 50% more than previously reported – through the sale of common and preferred stock. Following that disclosure, Moody’s lowered its rating of Lehman to “negative” from “stable.” In response, the price of Lehman shares fell roughly 12%, dropping from $32.29 to close at $28.47. On June 12, 2008, the Company removed Defendant Erin Callan as CFO and Defendant Joseph Gregory as President, without specifying the reason. Lead Counsel will be filing an amended complaint on September 26, 2008. Lehman Brothers filed for bankruptcy on September 14, 2008.