Lehman Brothers sues Marubeni in Japan for $350 million over alleged fraud

THE ASSOCIATED PRESS
TOKYO - Lehman Brothers has filed a lawsuit against major Japanese trading company Marubeni today, demanding $350 million in a case of alleged fraud.

Lehman Brothers Holdings Inc. is seeking to recoup funding it provided to another Japanese company that the U.S. bank says employees of Marubeni Corp. helped secure.

A Lehman Brothers official who spoke on condition of anonymity, confirmed that the lawsuit, filed in a Tokyo court, demands $350 million. Other details were not immediately available.

Marubeni has denied wrongdoing and says it has no obligation to repay the money.

Marubeni Corp. shares tumbled more than six per cent in Tokyo to 729 yen - $7.29 - in Monday morning trading.

Lehman 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.

Still, the woes are the latest challenge for Lehman, which like other American investment banks, are fighting a credit crunch in the U.S. The collapse of Bear Stearns has added to such concerns.

Tokyo-based Marubeni said in a statement Saturday that it did not secure the funding, and documents to that effect are fake. It contends that it is also a victim of the alleged fraud and therefore should not have to cover any damages.

© The Canadian Press, 2008