LEHMAN BROTHERS INC. · LEHMAN BROTHERS INC. SEC# 7506 8-12324 Main Office Location Mailing Address Business Telephone Number Doing business as LEHMAN BROTHERS INC. 646-348-7100 Regulated

BrokerCheck Report

LEHMAN BROTHERS INC.

Section Title

Report Summary

Firm History

CRD# 7506

1

9

Firm Profile 2 - 8

Page(s)

Firm Operations 10 - 29

Disclosure Events 30

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CRD# 7506

SEC# 8-12324

Main Office Location

100 WALL STREET17TH FLOORNEW YORK, NY 10005Regulated by FINRA New York Office

Mailing Address

100 WALL STREET17TH FLOORNEW YORK, NY 10005

This firm is a brokerage firm and an investmentadviser firm. For more information aboutinvestment adviser firms, visit the SEC'sInvestment Adviser Public Disclosure website at:

Business Telephone Number

646-348-7100

https://www.adviserinfo.sec.gov

Report Summary for this Firm

This report summary provides an overview of the brokerage firm. Additional information for this firm can be foundin the detailed report.

Disclosure Events

Brokerage firms are required to disclose certaincriminal matters, regulatory actions, civil judicialproceedings and financial matters in which the firm orone of its control affiliates has been involved.

Are there events disclosed about this firm? Yes

The following types of disclosures have beenreported:

Type Count

Regulatory Event 359

Civil Event 1

Arbitration 527

Firm Profile

This firm is classified as a corporation.

This firm was formed in Delaware on 01/21/1965.

Its fiscal year ends in November.

Firm History

Information relating to the brokerage firm's historysuch as other business names and successions(e.g., mergers, acquisitions) can be found in thedetailed report.

Firm Operations

Is this brokerage firm currently suspended with anyregulator? No

This firm conducts 22 types of businesses.

This firm is affiliated with financial or investmentinstitutions.

This firm does not have referral or financialarrangements with other brokers or dealers.

This firm is registered with:

• 1 Self-Regulatory Organization• 0 U.S. states and territories

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This firm is classified as a corporation.

This firm was formed in Delaware on 01/21/1965.

CRD#

This section provides the brokerage firm's full legal name, "Doing Business As" name, business and mailingaddresses, telephone number, and any alternate name by which the firm conducts business and where such name isused.

Firm Profile

Firm Names and Locations

Its fiscal year ends in November.


SEC#

7506

8-12324

Main Office Location

Mailing Address

Business Telephone Number

Doing business as LEHMAN BROTHERS INC.

646-348-7100

Regulated by FINRA New York Office



Other Names of this Firm

Name Where is it used

LEHMAN BROTHERS AK, AL, AR, AZ, CA,CO, CT, DC, DE, FL,GA, HI, IA, ID, IL, IN,KS, KY, LA, MA, MD,ME, MI, MN, MO,MS, MT, NC, ND, NE,NH, NJ, NM, NV, NY,OH, OK, OR, PA, PR,RI, SC, SD, TN, TX,UT, VA, VT, WA, WI,WV, WY 2©2020 FINRA. All rights reserved. Report about LEHMAN BROTHERS INC.

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AK, AL, AR, AZ, CA,CO, CT, DC, DE, FL,GA, HI, IA, ID, IL, IN,KS, KY, LA, MA, MD,ME, MI, MN, MO,MS, MT, NC, ND, NE,NH, NJ, NM, NV, NY,OH, OK, OR, PA, PR,RI, SC, SD, TN, TX,UT, VA, VT, WA, WI,WV, WY

LEHMAN BROTHERS MARKET MAKERS NY


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This section provides information relating to all direct owners and executive officers of the brokerage firm.

Direct Owners and Executive Officers

Firm Profile

Position

Percentage of Ownership

Is this a public reportingcompany?

Position Start Date

Does this owner direct themanagement or policies ofthe firm?

LEHMAN BROTHERS HOLDINGS INC.

SOLE SHAREHOLDER

75% or more

Yes

Domestic Entity

05/1988

Yes

Is this a domestic or foreignentity or an individual?

Legal Name & CRD# (if any):

Position



Position Start Date


CLARK, HOWARD LONGSTRETH JR

DIRECTOR

Less than 5%

Individual

09/1994

Yes

47587



Position


Position Start Date

CRUIKSHANK, THOMAS HENRY

DIRECTOR

Less than 5%

Individual

05/2003

4708135






Direct Owners and Executive Officers (continued)

Firm Profile




Less than 5%

Yes

Position



Position Start Date


FREIDHEIM, SCOTT JON

CO-CHIEF ADMINISTRATIVE OFFICER

Less than 5%

No

Individual

10/2006

Yes

1766230



Position



Position Start Date


FULD, RICHARD SEVERIN JR

DIRECTOR/CHAIRMAN AND CEO

Less than 5%

No

Individual

08/1984

Yes

215527



LOWITT, IAN THEO

4210205






Firm Profile

Position



Position Start Date


CO-CHIEF ADMINISTRATIVE OFFICER

Less than 5%

No

Individual

08/2008

Yes

4210205


Position



Position Start Date


MCDADE III, HERBERT H.

PRESIDENT AND CHIEF OPERATING OFFICER

Less than 5%

No

Individual

06/2008

Yes

1185218



Position


Position Start Date


RUSSO, THOMAS ANTHONY

CHIEF LEGAL OFFICER

Less than 5%

Individual

11/1998

Yes

3188169







Firm Profile



No

Yes




This section provides information relating to any indirect owners of the brokerage firm.

Indirect Owners

Firm Profile

No information reported.




Firm History

This section provides information relating to any successions (e.g., mergers, acquisitions) involving the firm.

No information reported.




Firm Operations

RegistrationsThis section provides information about the regulators (Securities and Exchange Commission (SEC), self-regulatoryorganizations (SROs), and U.S. states and territories) with which the brokerage firm is currently registered andlicensed, the date the license became effective, and certain information about the firm's SEC registration.

This firm is currently registered with 1 SRO and 0 U.S. states and territories.

Self-Regulatory Organization Status Date Effective

FINRA Receivership 09/19/2008




Firm Operations

Registrations (continued)




Firm Operations

Types of BusinessThis section provides the types of business, including non-securities business, the brokerage firm is engaged in orexpects to be engaged in.

Other Types of Business

This firm does effect transactions in commodities, commodity futures, or commodity options.This firm does not engage in other non-securities business.

Non-Securities Business Description:

This firm currently conducts 22 types of businesses.

Types of Business

Exchange member engaged in exchange commission business other than floor activities

Exchange member engaged in floor activities

Broker or dealer making inter-dealer markets in corporation securities over-the-counter

Broker or dealer retailing corporate equity securities over-the-counter

Broker or dealer selling corporate debt securities

Underwriter or selling group participant (corporate securities other than mutual funds)

Mutual fund underwriter or sponsor

Mutual fund retailer

U S. government securities dealer

U S. government securities broker

Municipal securities dealer

Municipal securities broker

Solicitor of time deposits in a financial institution

Real estate syndicator

Broker or dealer selling oil and gas interests

Put and call broker or dealer or option writer

Broker or dealer selling securities of non-profit organizations (e.g., churches, hospitals)

Investment advisory services

Broker or dealer selling tax shelters or limited partnerships in primary distributions

Trading securities for own account

Private placements of securities

Broker or dealer selling interests in mortgages or other receivables




Non-Securities Business Description:


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Firm Operations

Clearing Arrangements

This firm does hold or maintain funds or securities or provide clearing services for other broker-dealer(s).

Introducing Arrangements

This firm does not refer or introduce customers to other brokers and dealers.




Firm Operations

Industry Arrangements

This firm does not have books or records maintained by a third party.

This firm does not have accounts, funds, or securities maintained by a third party.

This firm does not have customer accounts, funds, or securities maintained by a third party.

This firm does not have individuals who control its management or policies through agreement.

This firm does not have individuals who wholly or partly finance the firm's business.

Control Persons/Financing




Firm Operations

Organization AffiliatesThis section provides information on control relationships the firm has with other firms in the securities, investmentadvisory, or banking business.

This firm is, directly or indirectly:

· in control of· controlled by· or under common control withthe following partnerships, corporations, or other organizations engaged in the securities or investmentadvisory business.

No

Yes

RUSSIA

Yes

07/02/2008

OFFICE 14093SMDENSKAYA SQMOSCOW, RUSSIA 121099

OOO LEHMAN BROTHERS is under common control with the firm.

UNDER COMMON CONTROL WITH REGISTRANT AS AN INDIRECTSUBSIDIARY OF LEHMAN BROTHERS HOLDINGS INC.

Description:

Investment AdvisoryActivities:

Securities Activities:

Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

No

AUSTRALIA

Yes

03/07/2007

LEVEL 33, 264 GEORGE STREETSYDNEY, AUSTRALIA 2000

LEHMAN BROTHERS ASSET MANAGEMENT LIMITED is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:


LEHMAN BROTHERS AUSTRALIA LIMITED is under common control with the firm.

Business Address: 16©2020 FINRA. All rights reserved. Report about LEHMAN BROTHERS INC.



Firm Operations

Organization Affiliates (continued)

No

Yes

AUSTRALIA

Yes

03/07/2007



Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

No

No

02/01/2004

605 THIRD AVENUENEW YORK, NY 10158

129618

NEUBERGER BERMAN INVESTMENT SERVICES, LLC is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

No

AUSTRALIA

Yes

10/31/2003

255 GEORGE STREETLEVEL 5SIDNEY, AUSTRALIA 2000

NEUBERGER BERMAN PTY LTD is under common control with the firm.



Country:

Foreign Entity:

Effective Date:

Business Address:




Firm Operations


Yes


Description:


Yes

Yes

No

10/31/2003


5493

NEUBERGER BERMAN MANAGEMENT INC. is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

No

No

10/31/2003

220 EAST 42ND STREET32ND FLOORNEW YORK, NY 10017

106780

SAGE PARTNERS LLC is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

108194

EXECUTIVE MONETARY MANAGEMENT INC is under common control with the firm.

CRD #:




Firm Operations


Yes

No

No

10/31/2003

220 EAST 42ND STREET32ND FLOORNEW YORK, NY 10017


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

Yes

No

10/31/2003


2908

NEUBERGER BERMAN, LLC is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

No

07/22/2005

325 NORTH ST PAUL STSUITE 4900DALLAS, TX 75201

124969

LEHMAN BROTHERS PRIVATE FUND MANAGEMENT, LP is under common control with the firm.


Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:




Firm Operations


Yes

No


Description:



Yes

No

No

07/22/2005

325 NORTH ST PAUL STSUITE 4900DALLAS, TX 75201

124970

LEHMAN BROTHERS PRIVATE FUND ADVISERS, LP is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

Yes

No

07/31/2001

745 SEVENTH AVENUENEW YORK, NY 10019

124518

LEHMAN BROTHERS OTC DERIVATIVES INC. is under common control with the firm.

UNDER COMMON CONTROL WITH REGISTRANT AS A DIRECT SUBSIDIARYOF LEHMAN BROTHERS HOLDINGS INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

LEHMAN BROTHERS ASSET MANAGEMENT LLC is under common control with the firm.




Firm Operations


Yes

No

No

04/01/2005


124687


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

No

ENGLAND

Yes

03/15/2002

ONE BROADGATELONDON, ENGLAND EC2M 7HA

EDGEWORTH CAPITAL LLP is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

LUXEMBOURG

Yes

02/05/1992

7, VAL SAINTE-CROIXLUXEMBOURG, LUXEMBOURG L-1371

LEHMAN BROTHERS (LUXEMBOURG) S.A. is under common control with the firm.

UNDER COMMON CONTROL WITH THE REGISTRANT AS A DIRECTSUBSIDIARY OF LEHMAN BROTHERS HOLDINGS INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:




Firm Operations



Description:

Yes

Yes

FRANCE

Yes

12/15/1986

21 RUE BALZACPARIS CEDEX 08, FRANCE 75406

BANQUE LEHMAN BROTHERS S.A. is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

ENGLAND

Yes

03/14/2000

ONE BROADGATELONDON, ENGLAND EC2M 7HA

LEHMAN BROTHERS EUROPE LIMITED is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

No

11/28/2001


COHANE RAFFERTY, LLC is under common control with the firm.


Country:

Foreign Entity:

Effective Date:

Business Address:




Firm Operations


No

Yes


Description:



No

Yes

TAIWAN

Yes

10/09/1987

4TH FLOOR, 205, SUITE 405TUN HWA N. ROADTAIPEI, TAIWAN

LEHMAN BROTHERS (TAIWAN) LTD is under common control with the firm.

UNDER COMMON CONTROL WITH THE REGISTRANT AS AN INDIRECTSUBSIDIARY OF LEHMAN BROTHERS HOLDINGS INC.

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

Yes

THAILAND

Yes

07/30/2004

990 ABDULRAHIM PLACE, 26TH FLOOR, UNIT 2601RAMA IV ROAD, SILOM, BANGRAKBANGKOK, THAILAND 10500

LEHMAN BROTHERS (THAILAND) LIMITED is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

25 DE MAYO 195PISO 8BUENOS AIRES, ARGENTINA

LEHMAN BROTHERS SUDAMERICA S.A. is controlled by the firm.

Business Address:




Firm Operations


No

Yes

ARGENTINA

Yes

07/28/1980

25 DE MAYO 195PISO 8BUENOS AIRES, ARGENTINA

CONTROLLED BY APPLICANTDescription:



Country:

Foreign Entity:

Effective Date:

No

Yes

AUSTRALIA

Yes

06/27/2000

LEVEL 27, 530 COLLINS STREETMELBOURNE, AUSTRALIA

LEHMAN BROTHERS AUSTRALIA PTY LIMITED is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

No

Yes

GERMANY

Yes

06/03/1987

GRUENEBURGWEG 18D-60322,FRANKFURT AM MAIN, GERMANY

LEHMAN BROTHERS BANKHAUS AKTIENGESELLSCHAFT is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:




Firm Operations


No

Yes

SINGAPORE

Yes

06/07/1990

5 TEMASEK BOULEVARD#11-01SUNTEC CITY TOWER, SINGAPORE 0103

LEHMAN BROTHERS INVESTMENTS PTE LIMITED is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

No

No

03/01/2001

399 PARK AVENUENEW YORK, NY 10022

112468

LEHMAN BROTHERS PRIVATE EQUITY ADVISERS LLC is under common control with the firm.

UNDER COMMON CONTROL WITH REGISTRANT AS A DIRECT SUBSIDIARYOF LEHMAN BROTHERS HOLDINGS INC

Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

No

09/01/2001

399 PARK AVENUE5TH FLOORNEW YORK, NY 10022

117035

LEHMAN BROTHERS ALTERNATIVE INVESTMENT MANAGEMENT LLC is under common control with thefirm.

Foreign Entity:

Effective Date:

Business Address:

CRD #:




Firm Operations


Yes

No

No


Description:



Country:

Foreign Entity:

Yes

Yes

CAYMAN ISLANDS

Yes

01/13/2004

10-1, ROPPONGI6-CHOMEMINATO-KU, TOKYO, JAPAN 106-6131

LEHMAN BROTHERS JAPAN INC. is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

Yes

ENGLAND

Yes

10/14/2003

25 BANK STREETLONDON, ENGLAND E14 5LE

LEHMAN BROTHERS INTERNATIONAL (EUROPE) is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

LEHMAN BROTHERS ASSET MANAGEMENT INC. is under common control with the firm.




Firm Operations


Yes

No

No

04/09/2003

399 PARK AVENUENEW YORK, NY 10022

109009


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

CRD #:

Yes

Yes

SINGAPORE

Yes

08/16/1980

5 TEMASEK BOULEVARD#11-01SUNTEC CITY TOWER, SINGAPORE 0103

LEHMAN BROTHERS PTE LTD. is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

Yes

HONG KONG

Yes

05/17/1985

LEVEL 38ONE PACIFIC PLACE 88 QUEENSWAYHONG KONG, CHINA 1111100000

LEHMAN BROTHERS ASIA LIMITED is under common control with the firm.



Country:

Foreign Entity:

Effective Date:

Business Address:




Firm Operations


Yes


Description:


No

Yes

HONG KONG

Yes

11/17/1987

LEVEL 38ONE PACIFIC 88 QUEENSWAYHONG KONG, CHINA 11111

LEHMAN BROTHERS SECURITIES ASIA LIMITED is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

Yes

No

BERMUDA

Yes

12/13/1988

CLARENDON HOUSECHURCH STREETHAMILTON, BERMUDA HM DX

LEHMAN BROTHERS OFFSHORE PARTNERS LTD. is under common control with the firm.


Description:



Country:

Foreign Entity:

Effective Date:

Business Address:

02/27/1976

LEVEL 38ONE PACIFIC 88 QUEENSWAYHONG KONG, CHINA 111111

LEHMAN BROTHERS ASIA HOLDINGS LIMITED is under common control with the firm.

Effective Date:

Business Address:




Firm Operations


Yes

No

HONG KONG

Yes

02/27/1976


Description:



Country:

Foreign Entity:

Effective Date:

This firm is not directly or indirectly, controlled by the following:

· bank holding company· national bank· state member bank of the Federal Reserve System· state non-member bank· savings bank or association· credit union· or foreign bank




Disclosure Events

All firms registered to sell securities or provide investment advice are required to disclose regulatory actions, criminal orcivil judicial proceedings, and certain financial matters in which the firm or one of its control affiliates has been involved.For your convenience, below is a matrix of the number and status of disclosure events involving this brokerage firm orone of its control affiliates. Further information regarding these events can be found in the subsequent pages of thisreport.

Final On AppealPending

Regulatory Event 0 359 0

Civil Event 0 1 0

Arbitration N/A 527 N/A




Disclosure Event Details

What you should know about reported disclosure events:

1. BrokerCheck provides details for any disclosure event that was reported in CRD. It also includessummary information regarding FINRA arbitration awards in cases where the brokerage firm wasnamed as a respondent.

2. Certain thresholds must be met before an event is reported to CRD, for example: o A law enforcement agency must file formal charges before a brokerage firm is required to disclose a

particular criminal event.3. Disclosure events in BrokerCheck reports come from different sources:

o Disclosure events for this brokerage firm were reported by the firm and/or regulators. When the firmand a regulator report information for the same event, both versions of the event will appear in theBrokerCheck report. The different versions will be separated by a solid line with the reporting sourcelabeled.

4. There are different statuses and dispositions for disclosure events: o A disclosure event may have a status of pending, on appeal, or final.

§ A "pending" event involves allegations that have not been proven or formally adjudicated.§ An event that is "on appeal" involves allegations that have been adjudicated but are currently

being appealed.§ A "final" event has been concluded and its resolution is not subject to change.

o A final event generally has a disposition of adjudicated, settled or otherwise resolved.§ An "adjudicated" matter includes a disposition by (1) a court of law in a criminal or civil matter,

or (2) an administrative panel in an action brought by a regulator that is contested by the partycharged with some alleged wrongdoing.

§ A "settled" matter generally involves an agreement by the parties to resolve the matter.Please note that firms may choose to settle customer disputes or regulatory matters forbusiness or other reasons.

§ A "resolved" matter usually involves no payment to the customer and no finding ofwrongdoing on the part of the individual broker. Such matters generally involve customerdisputes.

5. You may wish to contact the brokerage firm to obtain further information regarding any of thedisclosure events contained in this BrokerCheck report.

Regulatory - Final

This type of disclosure event involves (1) a final, formal proceeding initiated by a regulatory authority (e.g., a statesecurities agency, self-regulatory organization, federal regulator such as the U.S. Securities and Exchange Commission,foreign financial regulatory body) for a violation of investment-related rules or regulations; or (2) a revocation orsuspension of the authority of a brokerage firm or its control affiliate to act as an attorney, accountant or federalcontractor.

Disclosure 1 of 359

Reporting Source: Regulator

Allegations: SEC RULES 10A-1, 200(F)(1), 200(F)(3), NASD RULES 2110, 3010, 3350,3370(B)(2), 6130 - LEHMAN BROTHERS, INC.'S WRITTEN PLAN OFORGANIZATION MAINTAINED TO IDENTIFY EACH AGGREGATION UNIT,SPECIFY ITS TRADING OBJECTIVE(S) AND SUPPORT ITS INDEPENDENTIDENTITY FAILED TO DESCRIBE ACCURATELY A SEPARATE AGGREGATIONUNIT ESTABLISHED FOR THE FIRM'S RISK MANAGEMENT PURPOSES. THEFIRM FAILED TO ENSURE THAT ALL TRADERS IN EACH AGGREGATION UNITPURSUED ONLY THE PARTICULAR TRADING OBJECTIVE(S) ORSTRATEGY(IES) OF THAT AGGREGATION UNIT AND DID NOT COORDINATESTRATEGY(IES) WITH ANY OTHER AGGREGATION UNIT. THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS, INCLUDING SEC RULE 200(F),ACCORDING TO WHICH THE FIRM SHOULD HAVE MAINTAINED A WRITTENPLAN OF ORGANIZATION THAT IDENTIFIED EACH AGGREGATION UNIT,SPECIFIED ITS TRADING OBJECTIVE(S), SUPPORTED ITS INDEPENDENTIDENTITY AND ENSURED THAT ALL TRADERS IN AN AGGREGATION UNITPURSUED ONLY THE PARTICULAR TRADING OBJECTIVE(S) OF THATAGGREGATION UNIT. THE FIRM'S FAILURE TO COMPLY WITH THESEREQUIREMENTS AFFECTED THE ACCURACY OF THE AGGREGATIONMETHODOLOGY USED BY THE FIRM TO SUPPORT ITS TRADE BY TRADECALCULATIONS OF NET POSITION. THE FIRM'S ABILITY TO ENSURE THEACCURACY OF ITS TRADE REPORTS AS TO WHETHER A PARTICULARTRADE WAS LONG OR SHORT, AND WHETHER A PARTICULAR SHORT SALEWAS PROHIBITED, WAS IMPAIRED. IN SOME INSTANCES, THIS IMPAIRMENTRESULTED IN FLAWED CALCULATIONS OF NET POSITIONS WHICH IN TURNRESULTED IN VIOLATIONS OF NASD RULES 6130, 3350 (THE SHORT SALERULE) AND SEC RULE 10A-1. [CONTINUED IN COMMENTS.]

Current Status: Final




Initiated By: FINRA

Principal Sanction(s)/ReliefSought:

Other Sanction(s)/ReliefSought:

Date Initiated: 08/18/2008

Docket/Case Number: 2004100012901

Principal Product Type: Other

Other Product Type(s): UNKNOWN TYPE OF SECURITIES

Allegations: SEC RULES 10A-1, 200(F)(1), 200(F)(3), NASD RULES 2110, 3010, 3350,3370(B)(2), 6130 - LEHMAN BROTHERS, INC.'S WRITTEN PLAN OFORGANIZATION MAINTAINED TO IDENTIFY EACH AGGREGATION UNIT,SPECIFY ITS TRADING OBJECTIVE(S) AND SUPPORT ITS INDEPENDENTIDENTITY FAILED TO DESCRIBE ACCURATELY A SEPARATE AGGREGATIONUNIT ESTABLISHED FOR THE FIRM'S RISK MANAGEMENT PURPOSES. THEFIRM FAILED TO ENSURE THAT ALL TRADERS IN EACH AGGREGATION UNITPURSUED ONLY THE PARTICULAR TRADING OBJECTIVE(S) ORSTRATEGY(IES) OF THAT AGGREGATION UNIT AND DID NOT COORDINATESTRATEGY(IES) WITH ANY OTHER AGGREGATION UNIT. THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLESECURITIES LAWS, REGULATIONS, INCLUDING SEC RULE 200(F),ACCORDING TO WHICH THE FIRM SHOULD HAVE MAINTAINED A WRITTENPLAN OF ORGANIZATION THAT IDENTIFIED EACH AGGREGATION UNIT,SPECIFIED ITS TRADING OBJECTIVE(S), SUPPORTED ITS INDEPENDENTIDENTITY AND ENSURED THAT ALL TRADERS IN AN AGGREGATION UNITPURSUED ONLY THE PARTICULAR TRADING OBJECTIVE(S) OF THATAGGREGATION UNIT. THE FIRM'S FAILURE TO COMPLY WITH THESEREQUIREMENTS AFFECTED THE ACCURACY OF THE AGGREGATIONMETHODOLOGY USED BY THE FIRM TO SUPPORT ITS TRADE BY TRADECALCULATIONS OF NET POSITION. THE FIRM'S ABILITY TO ENSURE THEACCURACY OF ITS TRADE REPORTS AS TO WHETHER A PARTICULARTRADE WAS LONG OR SHORT, AND WHETHER A PARTICULAR SHORT SALEWAS PROHIBITED, WAS IMPAIRED. IN SOME INSTANCES, THIS IMPAIRMENTRESULTED IN FLAWED CALCULATIONS OF NET POSITIONS WHICH IN TURNRESULTED IN VIOLATIONS OF NASD RULES 6130, 3350 (THE SHORT SALERULE) AND SEC RULE 10A-1. [CONTINUED IN COMMENTS.]

Resolution Date: 08/18/2008

Resolution:

Does the order constitute afinal order based onviolations of any laws orregulations that prohibitfraudulent, manipulative, ordeceptive conduct?

No

Acceptance, Waiver & Consent(AWC)


http://www.finra.org/brokercheckhttp://www.finra.org/brokercheck_reportshttp://www.finra.orghttps://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=2004100012901


Other Sanctions Ordered: UNDERTAKING

Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED, FINED $250,000 AND REQUIRED TOREVISE ITS WRITTEN SUPERVISORY PROCEDURES REGARDINGCOMPLIANCE WITH NASD RULE 3370(B)(2), MAINTAINING A WRITTEN PLANOF ORGANIZATION IDENTIFYING EACH AGGREGATION UNIT, ITS TRADINGOBJECTIVE(S), SUPPORTING ITS INDEPENDENT IDENTITY AND ENSURINGTHAT ALL TRADERS IN AN AGGREGATION UNIT PURSUED ONLY THEPARTICULAR TRADING OBJECTIVE(S) OF THAT AGGREGATION UNIT WITHIN30 BUSINESS DAYS OF ACCEPTANCE OF THIS AWC BY THE ODA OR THENAC.

Regulator Statement THE FIRM ACCEPTED SHORT SALES IN CERTAIN SECURITIES FOR ITSPROPRIETARY ACCOUNT AND CUSTOMER SHORT SALE ORDERS AND, FOREACH ORDER, FAILED TO ANNOTATE AN AFFIRMATIVE DETERMINATIONTHAT THE FIRM WOULD RECEIVE DELIVERY OF THE SECURITY OR THATTHE FIRM COULD BORROW THE SECURITY OR OTHERWISE PROVIDE FORDELIVERY OF THE SECURITIES BY SETTLEMENT DATE. THE FIRM'SSUPERVISORY SYSTEM DID NOT PROVIDE FOR SUPERVISIONREASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NASD RULE3370(B)(2).


No

Sanctions Ordered: CensureMonetary/Fine $250,000.00

iReporting Source: Firm

Initiated By: FINRA

Allegations: FINRA ALLEGED THAT THE FIRM'S WRITTEN PLAN OF ORGANIZATIONMAINTAINED TO DEFINE ITS AGGREGATION UNITS DID NOT PROPERLYDESCRIBE THE TRADING OBJECTIVES OF AN AGGREGATION UNITESTABLISHED FOR RISK MANAGEMENT PURPOSES. AS A RESULT, FINRAALLEGED THAT THAT THE FIRM'S AGGREGATION METHODOLOGYAFFECTED THE FIRM'S ABILITY TO ENSURE THE ACCURACY OF ITS TRADEREPORTS. FURTHER, FINRA ALLEGED THAT FOR CERTAIN FIRM ANDCUSTOMER SHORT SALE ORDERS, THE FIRM DID NOT MAINTAINADEQUATE AFFIRMATIVE DETERMINATION DOCUMENTATION.





Initiated By: FINRA


Censure


UNDERTAKING AND FINE


Docket/Case Number: 20041000129-01

Principal Product Type: Equity - OTC

Other Product Type(s): EQUITY LISTED (COMMON & PREFERRED STOCK)


Resolution:

Other Sanctions Ordered: UNDERTAKING TO REVISE CERTAIN WRITTEN SUPERVIOSTYPROCEDURES.

Sanction Details: A CENSURE, UNDERTAKING AND A FINE OF $250,000.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO A CENSURE, UNDERTAKING, AND TO PAY A FINE OF $250,000.



Disclosure 2 of 359

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Initiated By: FINRA



Principal Product Type: No Product

Allegations: NASD RULES 1050 AND 2110: FROM MARCH 30, 2004 THROUGH AUGUST 15,2005, THE NAMES OF TEN PERSONS ASSOCIATED WITH RESPONDENTFIRM, INCLUDING TWO PERSONS IN THE BRANCH OFFICE IN TAIWAN,APPEARED ON RESEARCH REPORTS WHEN THOSE INDIVIDUALS DID NOTHAVE THEIR RESEARCH ANALYST REGISTRATION (SERIES 86 AND 87) ANDTHUS THEY WERE UNQUALIFIED. DURING THAT PERIOD, RESPONDENTFIRM PUBLISHED APPROX. 77 RESEARCH REPORTS WITH THE NAMES OFTHE UNREGISTERED ANALYSTS APPEARING ON THOSE REPORTS.








Other Product Type(s):


Resolution:

Other Sanctions Ordered:

Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, RESPONDENT MEMBERFIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, FIRM IS CENSURED AND FINED $75,000.


No




Initiated By: FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA)


Censure






Allegations: NASD RULES 1050 AND 2110: FINRA ALLEGED THAT DURING THE REVIEWPERIOD MARCH 30, 2004 THROUGH AUGUST 15, 2005, LEHMAN BROTHERSINC. ALLOWED INDIVIDUALS WHO HAD NOT TAKEN THE SERIES 86 AND 87EXAMS TO FUNCTION AS RESEARCH ANALYSTS BY HAVING THEIR NAMESAPPEAR ON THE COVER OF RESEARCH REPORTS.







Resolution:


Sanction Details: A CENSURE AND A FINE OF $75,000. LEHMAN BROTHERS INC. PAID THEFINE ON JULY 11, 2008.

Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, LEHMANBROTHERS INC. CONSENTED TO A CENSURE AND A FINE OF $75,000. THEAWC BECAME FINAL ON JULY 1, 2008.



Disclosure 3 of 359

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Allegations: RULE 15C3-1 OF THE SECURITIES EXCHANGE ACT OF 1934, SECTION17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934, AND RULE 17A-3(A)(11), 17A-4(B)(5) AND 17A-5 THEREUNDER AND NASD RULES 2110, 3110,3130(B): IN 1984 AND 1996, LEHMAN BROTHERS INC., (THE "FIRM")EXECUTED TWO ORIGINAL SUBORDINATED INDENTURES, BOTH OF WHICHHAD BEEN APPROVED PRIOR TO EXECUTION BY NYSE. INCLUDED INTHOSE ORIGINAL INDENTURES WAS THE REQUIREMENT THAT THE FIRMOBTAIN THE APPROVAL OF NYSE PRIOR TO EXECUTING ANYSUPPLEMENTAL SUBORDINATED INDENTURES. IN OCTOBER 2003, NYSEREGULATION INC. ("NYSE REGULATION") DETERMINED THAT THE FIRM DIDNOT OBTAIN THE REQUIRED PRIOR APPROVAL OF NYSE BEFOREEXECUTING TWO SUPPLEMENTAL SUBORDINATED INDENTURESCOVERING APPROXIMATELY $1.493 BILLION OF DEBT. THE TWOSUPPLEMENTAL SUBORDINATED INDENTURES OF OCTOBER 2003CONTAINED LANGUAGE THAT DID NOT COMPLY WITH THE REQUIREMENTSOF SECTION 15C3-1 OF THE SECURITIES EXCHANGE ACT OF 1934("EXCHANGE ACT" OR "1934 ACT") AND RULE 15C3-LD(A)(1), APPENDIX D("APPENDIX D") THEREUNDER, RELATING TO THE "MINIMUMREQUIREMENTS FOR SUBORDINATION AGREEMENTS." AS A RESULT, THISLANGUAGE DISQUALIFIED APPROXIMATELY $1.493 BILLION OF DEBT FROMEXCLUSION AS SUBORDINATED DEBT IN THE FIRM'S NET CAPITALCALCULATIONS. CONSEQUENTLY, NYSE REGULATION DETERMINED THATTHE FIRM DID NOT ACCURATELY CALCULATE ITS NET CAPITAL ANDEXCESS NET CAPITAL AND OVERSTATED BOTH BY APPROXIMATELY $1.493BILLION IN ITS FOCUS REPORT CALCULATIONS FROM OCTOBER 2003THROUGH MARCH 2004. (CONTINUED IN COMMENTS)





Initiated By: FINRA







RULE 15C3-1 OF THE SECURITIES EXCHANGE ACT OF 1934, SECTION17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934, AND RULE 17A-3(A)(11), 17A-4(B)(5) AND 17A-5 THEREUNDER AND NASD RULES 2110, 3110,3130(B): IN 1984 AND 1996, LEHMAN BROTHERS INC., (THE "FIRM")EXECUTED TWO ORIGINAL SUBORDINATED INDENTURES, BOTH OF WHICHHAD BEEN APPROVED PRIOR TO EXECUTION BY NYSE. INCLUDED INTHOSE ORIGINAL INDENTURES WAS THE REQUIREMENT THAT THE FIRMOBTAIN THE APPROVAL OF NYSE PRIOR TO EXECUTING ANYSUPPLEMENTAL SUBORDINATED INDENTURES. IN OCTOBER 2003, NYSEREGULATION INC. ("NYSE REGULATION") DETERMINED THAT THE FIRM DIDNOT OBTAIN THE REQUIRED PRIOR APPROVAL OF NYSE BEFOREEXECUTING TWO SUPPLEMENTAL SUBORDINATED INDENTURESCOVERING APPROXIMATELY $1.493 BILLION OF DEBT. THE TWOSUPPLEMENTAL SUBORDINATED INDENTURES OF OCTOBER 2003CONTAINED LANGUAGE THAT DID NOT COMPLY WITH THE REQUIREMENTSOF SECTION 15C3-1 OF THE SECURITIES EXCHANGE ACT OF 1934("EXCHANGE ACT" OR "1934 ACT") AND RULE 15C3-LD(A)(1), APPENDIX D("APPENDIX D") THEREUNDER, RELATING TO THE "MINIMUMREQUIREMENTS FOR SUBORDINATION AGREEMENTS." AS A RESULT, THISLANGUAGE DISQUALIFIED APPROXIMATELY $1.493 BILLION OF DEBT FROMEXCLUSION AS SUBORDINATED DEBT IN THE FIRM'S NET CAPITALCALCULATIONS. CONSEQUENTLY, NYSE REGULATION DETERMINED THATTHE FIRM DID NOT ACCURATELY CALCULATE ITS NET CAPITAL ANDEXCESS NET CAPITAL AND OVERSTATED BOTH BY APPROXIMATELY $1.493BILLION IN ITS FOCUS REPORT CALCULATIONS FROM OCTOBER 2003THROUGH MARCH 2004. (CONTINUED IN COMMENTS)


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE IT IS CENSURED AND FINED $125,000.

Regulator Statement (FINDINGS CONTINUED)LEHMAN VIOLATED EXCHANGE ACT RULE 15C3-1AND NASD RULE 3130(B) IN THAT ON ONE OR MORE OCCASIONS THE FIRMFAILED TO ACCURATELY COMPUTE ITS NET CAPITAL. LEHMAN VIOLATEDSECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934, AND RULE17A-5 THEREUNDER, IN THAT THE FIRM FILED FOCUS REPORTS WITH THENYSE REFLECTING A NET CAPITAL FIGURE WHICH INCORRECTLYINCLUDED THE $1.49 BILLION COVERED BY THE SUPPLEMENTALSUBORDINATED INDENTURES OF OCTOBER 3,.2003 AND OCTOBER 14,2003.LEHMAN VIOLATED SECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACTOF 1934, ANDRULES 17A-3(A)(11) AND 17A-4(B)(5) THEREUNDER, AND NASD RULE 3110AND NASDRULE 3130(B) IN THAT THE FIRM FAILED TO MAKE AND/OR PRESERVEACCURATE BOOKS AND RECORDS REFLECTING AND/OR RELATING TO ITSNET CAPITAL AND EXCESS NET CAPITAL. BY REASON OF THE FOREGOING,LEHMAN VIOLATED NASD RULE 2110 IN THAT THE FIRM FAILED TO ADHERETO HIGH STANDARDS OF COMMERCIAL HONOR AND JUST AND EQUITABLEPRINCIPLES OF TRADE.


No






(FINDINGS CONTINUED)LEHMAN VIOLATED EXCHANGE ACT RULE 15C3-1AND NASD RULE 3130(B) IN THAT ON ONE OR MORE OCCASIONS THE FIRMFAILED TO ACCURATELY COMPUTE ITS NET CAPITAL. LEHMAN VIOLATEDSECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACT OF 1934, AND RULE17A-5 THEREUNDER, IN THAT THE FIRM FILED FOCUS REPORTS WITH THENYSE REFLECTING A NET CAPITAL FIGURE WHICH INCORRECTLYINCLUDED THE $1.49 BILLION COVERED BY THE SUPPLEMENTALSUBORDINATED INDENTURES OF OCTOBER 3,.2003 AND OCTOBER 14,2003.LEHMAN VIOLATED SECTION 17(A)(1) OF THE SECURITIES EXCHANGE ACTOF 1934, ANDRULES 17A-3(A)(11) AND 17A-4(B)(5) THEREUNDER, AND NASD RULE 3110AND NASDRULE 3130(B) IN THAT THE FIRM FAILED TO MAKE AND/OR PRESERVEACCURATE BOOKS AND RECORDS REFLECTING AND/OR RELATING TO ITSNET CAPITAL AND EXCESS NET CAPITAL. BY REASON OF THE FOREGOING,LEHMAN VIOLATED NASD RULE 2110 IN THAT THE FIRM FAILED TO ADHERETO HIGH STANDARDS OF COMMERCIAL HONOR AND JUST AND EQUITABLEPRINCIPLES OF TRADE.


Initiated By: FINRA


Censure


FINE





Allegations: IN OCTOBER 2003, THE FIRM MADE CHANGES TO TWO INDENTURESCOVERING CERTAIN PUBLICLY-TRADED DEBT OF LEHMAN BROTHERS INC.FINRA ALLEGED THAT THE CHANGES RENDERED THE DEBT COVERED BYTHE INDENTURES RETROACTIVELY INELIGIBLE FOR INCLUSION IN THEFIRM'S NET CAPITAL COMPUTATION FOR THE SIX-MONTH PERIOD FROMOCTOBER 2003 TO MARCH 2004 AND IN THE FIRM'S MONTHLY FOCUSREPORTS FOR THAT PERIOD. AT ALL TIMES, THE FIRM MAINTAINEDADEQUATE NET CAPITAL, IN COMPLIANCE WITH REGULATORYREQUIREMENTS. IN ADDITION, DURING THE TIME PERIOD, THE FIRM HADA $1 BILLION LINE OF CREDIT WHICH WAS NEVER DRAWN DOWN.



Resolution:


Sanction Details: A CENSURE AND FINE OF $125,000.

Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO A CENSURE AND TO PAY A FINE OF $125,000.






Firm Statement WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO A CENSURE AND TO PAY A FINE OF $125,000.

Disclosure 4 of 359

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Reporting Source: Firm

Initiated By: ICE CLEAR U.S. INC.


Civil and Administrative Penalt(ies) /Fine(s)



Docket/Case Number:

Principal Product Type: Futures - Commodity


Allegations: ALLEGED OVERSTATEMENT OF OPEN CONTRACTS IN A CLIENT ACCOUNT



Resolution:


Sanction Details: $500 ASSESSMENT PAID FEBRUARY 29, 2008.

Firm Statement ON FEBRUARY 21, 2008, ICE CLEAR U.S. INC. ISSUED LEHMAN A SUMMARYFINE OF $500 FOR ALLEGED OVERSTATEMENT OF OPEN CONTRACTS INAN ACCOUNT.

Sanctions Ordered: Monetary/Fine $500.00

Consent

Disclosure 5 of 359

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Allegations: ON DECEMBER 6, 2007, CME GROUP'S BUSINESS CONDUCT COMMITTEEISSUED A NOTICE OF PRELIMINARY CHARGES, ALLEGING THAT LEHMANVIOLATED CHICAGO BOARD OF TRADE ("CBOT") REGULATIONS 331.08 AND331.09 AND ALSO DID NOT PROVIDE CERTAIN REQUESTEDDOCUMENTATION IN CONNECTION WITH CERTAIN EXCHANGE FORPHYSICALS TRANSACTIONS.





Initiated By: CME GROUP





Docket/Case Number: 2007-MSR-003

Principal Product Type: Futures - Financial


ON DECEMBER 6, 2007, CME GROUP'S BUSINESS CONDUCT COMMITTEEISSUED A NOTICE OF PRELIMINARY CHARGES, ALLEGING THAT LEHMANVIOLATED CHICAGO BOARD OF TRADE ("CBOT") REGULATIONS 331.08 AND331.09 AND ALSO DID NOT PROVIDE CERTAIN REQUESTEDDOCUMENTATION IN CONNECTION WITH CERTAIN EXCHANGE FORPHYSICALS TRANSACTIONS.


Resolution:


Sanction Details: A $70,000 FINE.

Firm Statement ON JANUARY 4, 2008, THE BUSINESS CONDUCT COMMITTEE ENTERED ADECISION ACCEPTING LEHMAN'S OFFER OF SETTLEMENT WHICH,WITHOUT ACCEPTING OR DENYING THE ALLEGATIONS IN THE NOTICE OFPRELIMINARY CHARGES, AGREED TO ENTRY OF A FINE IN THE AMOUNTOF $70,000.

Sanctions Ordered: Monetary/Fine $70,000.00

Decision & Order of Offer of Settlement

Disclosure 6 of 359

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Initiated By: INTERNATIONAL SECURITIES EXCHANGE (ISE)




Docket/Case Number: 2005-06, ET AL

Principal Product Type: Options


Allegations: ISE ALLEGED THAT THE FIRM FAILED TO PARTICIPATE IN THE OPENINGROTATION FOR CERTAIN OPTIONS MARKET MAKING ACTIVITY AND FAILEDTO MAINTAIN CONTINUOUS QUOTATIONS IN THOSE OPTIONS.









Resolution:


Sanction Details: A FINE OF $55,000.

Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, LEHMANCONSENTED TO A FINE OF $55,000. THE AWC BECAME FINAL ONDECEMBER 11, 2007.



Disclosure 7 of 359

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Initiated By: CHICAGO BOARD OPTIONS EXCHANGE





Docket/Case Number: ICT NO. 89030



Allegations: ALLEGED VIOLATIONS OF RULE 4.11 RELATING TO POSITION LIMITS.



Resolution:


Sanction Details: CBOE ISSUED LEHMAN FINES ON NOVEMBER 30, 2007 FOR $1,000 AND$2,500 FOR MINOR RULE VIOLATIONS.


Consent




Firm Statement ON NOVEMBER 30, 2007 CBOE ISSUED A NOTICE OF FINE FOR MINORRULE VIOLATIONS OF RULE 4.11 RELATING TO POSITION LIMITS INCONNECTION WITH CERTAIN OPTIONS POSITIONS FROM NOVEMBER 12THTHROUGH 14TH 2007, AND ISSUED FINES IN THE AMOUNTS OF $1,000 AND$2,500 ($3,500 TOTAL).

Disclosure 8 of 359

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Initiated By: ICE CLEAR U.S. INC.





Docket/Case Number:

Principal Product Type: Futures - Commodity


Allegations: ALLEGED OVERSTATEMENT OF OPEN CONTRACTS IN AN ACCOUNT.



Resolution:


Sanction Details: ICE CLEAR U.S. INC. ASSESSED A $500 FINE WHICH WAS PAID DECEMBER19, 2007.

Firm Statement ON NOVEMBER 26, 2007, ICE CLEAR U.S. INC. ISSUED LEHMAN A SUMMARYFINE OF $500 FOR ALLEGED OVERSTATEMENT OF OPEN CONTRACTS INAN ACCOUNT.


Consent

Disclosure 9 of 359

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Allegations: NASD RULES 2110, 3010, 3310 - LEHMAN BROTHERS, INC.'S AGGREGATETRADE VOLUME (BUY AND SELL) FOR EQUITY SECURITIES ADVERTISED INPRIVATE SERVICE PROVIDERS FOR ONE MONTH SUBSTANTIALLYEXCEEDED THE FIRM'S EXECUTED TRADE VOLUME FOR THE SAMESECURITIES. THE FIRM FAILED TO DETERMINE WHETHER THE TRADEVOLUME THAT IT ADVERTISED IN THESE SERVICES ACCURATELYREFLECTED ITS EXECUTED TRADE VOLUME. THE FIRM'S SUPERVISORYSYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS,REGULATIONS AND NASD RULES CONCERNING NASD RULE 3310 - THEIDENTIFICATION OF THE PERSON(S) RESPONSIBLE FOR SUPERVISIONWITH RESPECT TO THE ADVERTISED TRADE VOLUME ON SUBSCRIBERSERVICES AND APPLICABLE RULES. THE FIRM DID NOT SUPERVISE THETRADE VOLUME THAT IT ADVERTISED IN THESE SYSTEMS.





Initiated By: FINRA





Principal Product Type: Equity Listed (Common & Preferred Stock)


Allegations: NASD RULES 2110, 3010, 3310 - LEHMAN BROTHERS, INC.'S AGGREGATETRADE VOLUME (BUY AND SELL) FOR EQUITY SECURITIES ADVERTISED INPRIVATE SERVICE PROVIDERS FOR ONE MONTH SUBSTANTIALLYEXCEEDED THE FIRM'S EXECUTED TRADE VOLUME FOR THE SAMESECURITIES. THE FIRM FAILED TO DETERMINE WHETHER THE TRADEVOLUME THAT IT ADVERTISED IN THESE SERVICES ACCURATELYREFLECTED ITS EXECUTED TRADE VOLUME. THE FIRM'S SUPERVISORYSYSTEM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS,REGULATIONS AND NASD RULES CONCERNING NASD RULE 3310 - THEIDENTIFICATION OF THE PERSON(S) RESPONSIBLE FOR SUPERVISIONWITH RESPECT TO THE ADVERTISED TRADE VOLUME ON SUBSCRIBERSERVICES AND APPLICABLE RULES. THE FIRM DID NOT SUPERVISE THETRADE VOLUME THAT IT ADVERTISED IN THESE SYSTEMS.


Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $200,000.


No



iReporting Source:





Initiated By: FINANCIAL INDUSTRY REGULATORY AUTHORITY




CENSURE





Allegations: FINRA ALLEGED THAT LEHMAN BROTHERS INC. INACCURATELYADVERTISED CERTAIN TRADE VOLUMES TO CERTAIN THIRD PARTYVENDORS.



Resolution:


Sanction Details: A CENSURE AND A FINE OF $200,000.

Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, LEHMANBROTHERS INC. CONSENTED TO A CENSURE AND A FINE OF $200,000. THEAWC BECAME FINAL ON DECEMBER 18, 2007. THE FINE WAS PAID TOFINRA ON JANUARY 4, 2008.



Disclosure 10 of 359

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Initiated By: FINRA

Allegations: NASD RULES 1021 AND 2110: LEHMAN PERMITTED AN INDIVIDUAL, AMANAGING DIRECTOR OF ITS OFFICE DESIGNATED AS AN OFFICE OFSUPERVISORY JURISDICTION, TO PERFORM CERTAIN FUNCTIONSREQUIRING PRINCIPAL REGISTRATION PRIOR TO BEING REGISTEREDWITH FINRA IN THAT CAPACITY.












Resolution:


Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, RESPONDENT MEMBERFIRM CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OFFINDINGS; THEREFORE, FIRM IS CENSURED AND FINED $50,000.


No




Initiated By: FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA)







Allegations: FINRA ALLEGED THAT THE FIRM PERMITTED AN UNREGISTERED PERSONTO PERFORM CERTAIN INTERNAL FUNCTIONS THAT REQUIREDREGISTRATION.



http://www.finra.org/brokercheckhttp://www.finra.org/brokercheck_reportshttp://www.finra.orghttps://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=2005003424802https://www.finra.org/rules-guidance/oversight-enforcement/finra-disciplinary-actions?search=2005003424802





CENSURE


Resolution:



Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, LEHMANCONSENTED TO A CENSURE AND A FINE OF $50,000. THE AWC BECAMEFINAL ON DECEMBER 6, 2007.




i


Initiated By: TAIWAN STOCK EXCHANGE CORPORATION








Allegations: ALLEGED LATE REPORTING OF CERTAIN TRADE INFORMATION ONSEPTEMBER 14, 2007 IN VIOLATION OF ARTICLE 75-5 OF THE OPERATINGRULES OF THE TAIWAN STOCK EXCHANGE CORPORATION.



Resolution:



Other





Sanction Details: FINE OF NTD 30,000 (APPROXIMATELY US $900 AT THE TIME).

Firm Statement ON SEPTEMBER 20, 2007, THE TAIWAN BRANCH OF LEHMAN BROTHERSINC. WAS FINED NTD 30,000 FOR ALLEGED LATE REPORTING OF CERTAINTRADE INFORMATION ON SEPTEMBER 14, 2007 IN VIOLATION OF ARTICLE75-5 OF THE OPERATING RULES OF THE TAIWAN STOCK EXCHANGECORPORATION. THE FINE WAS PAID.


i


Initiated By: FINRA






Other Product Type(s): THRESHOLD SECURITY

Allegations: SEC RULE 203(B)(3) - LEHMAN BROTHERS, INC. HAD A FAIL TO DELIVERPOSITION IN A THRESHOLD SECURITY AT A REGISTERED CLEARINGAGENCY FOR 13 CONSECUTIVE SETTLEMENT DAYS AND FAILED TOIMMEDIATELY THEREAFTER CLOSE OUT THE FAIL TO DELIVER POSITIONBY PURCHASING SECURITIES OF LIKE KIND AND QUANTITY. THE FIRMCONTINUED TO HAVE A FAIL TO DELIVER POSITION WHICH IT FAILED TOCLOSE OUT AS REQUIRED AT THE REGISTERED CLEARING AGENCY FOR10 CONSECUTIVE SETTLEMENT DAYS THEREAFTER.



Resolution:


No







Sanction Details: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTEDTO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS;THEREFORE, THE FIRM IS CENSURED AND FINED $20,000.



Initiated By: FINANCIAL INDUSTRY REGULATORY AUTHORITY




CENSURE





Allegations: FINRA ALLEGED THAT LEHMAN BROTHERS INC. FAILED TO CLOSE OUT AFAIL TO DELIVER POSITION IN A THRESHOLD SECURITY WITHIN THEREQUIRED TIMEFRAME.



Resolution:



Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, LEHMANCONSENTED TO A CENSURE AND A FINE OF $20,000. THE AWC BECAMEFINAL ON SEPTEMBER 7, 2007. THE FINE WAS PAID TO FINRA ONSEPTEMBER 24, 2007.




i





Initiated By: NEW YORK STOCK EXCHANGE DIVISION OF ENFORCEMENT



Docket/Case Number: HPD 07-112



Allegations: **6/29/07**STIPULATION AND CONSENT TO PENALTY FILED BY NYSEREGULATION'S DIVISION OF ENFORCEMENT AND PENDING.CONSENTEDTO FINDINGS:WITHOUT ADMITTING OR DENYING GUILT, LEHMANBROTHERS INC. CONSENTS TO FINDINGS THAT IT VIOLATED:1.NYSE RULES 401 BY FAILING TO ADHERE TO THE PRINCIPLES OF GOODBUSINESS PRACTICE IN THAT THE FIRM:A.FAILED TO ENSURE THEDELIVERY OF PROSPECTUSES IN CONNECTION WITH CERTAIN SALES OFREGISTERED SECURITIES IN VIOLATION OF SECTION 5(B)(2) OF THESECURITIES ACT; AND B.FAILED TO ENSURE THE DELIVERY OF CERTAINCHANGE OF NAME AND ADDRESS LETTERS, ACCOUNT VERIFICATIONPROFILES, MARGIN ACCOUNT DISCLOSURES, PRIVACY STATEMENTS,OPTION SUITABILITY LETTERS, EXTERNAL MANAGER FORMS, DOMESTICMAIL WAIVER LETTERS, MISSING MARGIN AGREEMENT LETTERS ANDSTATEMENT CONSOLIDATION LETTERS.2.NYSE RULE 1100(B) BY FAILING TO DELIVER PRODUCT DESCRIPTIONSTO CERTAIN CUSTOMERS THAT PURCHASED EXCHANGE TRADED FUNDS;3.RULE 10B-10 OF THE SECURITIES EXCHANGE ACT OF 1934 BY FAILINGTO PROVIDE CERTAIN CUSTOMERS WITH TRADE CONFIRMATIONS FORCERTAIN SECURITIES TRANSACTIONS; AND4.NYSE RULE 342:A.IN THAT THE FIRM FAILED TO PROVIDE FOR,ESTABLISH AND MAINTAIN APPROPRIATE PROCEDURES OF SUPERVISIONAND CONTROL INCLUDING A SYSTEM OF FOLLOW-UP AND REVIEW, WITHRESPECT TO ITS OPERATIONAL AND TECHNOLOGICAL ACTIVITIESRELATING TO THE DELIVERY OF PRODUCT DESCRIPTIONS ANDPROSPECTUSES;B.IN THAT THE FIRM FAILED TO PROVIDE FOR,ESTABLISH AND MAINTAIN APPROPRIATE PROCEDURES OF SUPERVISIONAND CONTROL INCLUDING A SYSTEM OF FOLLOW-UP AND REVIEW, WITHRESPECT TO ITS OPERATIONAL AND TECHNOLOGICAL ACTIVITIESRELATING TO THE DELIVERY OF CERTAIN TRADE CONFIRMATIONS ANDVARIOUS OTHER DOCUMENTS AS DESCRIBED ABOVE; AND C.BY FAILINGTO EVIDENCE ITS SUPERVISORY REVIEW OF CERTAIN LETTERS OFAUTHORIZATION RECEIVED FROM CUSTOMERS, WHICH REQUESTED ACHANGE OF ADDRESS.**CONTINUED AT 13C**








Resolution:

Other Sanctions Ordered: CONSENT TO CENSURE, $1,250,000 FINE AND UNDERTAKING.

Sanction Details: **9/7/07**DECISION 07-112 ISSUED BY NYSE HEARING BOARDDECISION:LEHMAN BROTHERS INC. CONSENTED TO FINDINGS THAT ITVIOLATED:1.NYSE RULES 401 BY FAILING TO ADHERE TO THE PRINCIPLESOF GOOD BUSINESS PRACTICE IN THAT THE FIRM: A. FAILED TO ENSURETHE DELIVERY OF PROSPECTUSES IN CONNECTION WITH CERTAIN SALESOF REGISTERED SECURITIES IN VIOLATION OF SECTION 5(B)(2) OF THESECURITIES ACT OF 1933; AND B. FAILED TO ENSURE THE DELIVERY OFCERTAIN CHANGE OF NAME AND ADDRESS LETTERS, ACCOUNTVERIFICATION PROFILES, MARGIN ACCOUNT DISCLOSURES, PRIVACYSTATEMENTS, OPTION SUITABILITY LETTERS, EXTERNAL MANAGERFORMS, DOMESTIC MAIL WAIVER LETTERS, MISSING MARGIN AGREEMENTLETTERS AND STATEMENT CONSOLIDATION LETTERS.2.NYSE RULE1100(B) BY FAILING TO DELIVER PRODUCT DESCRIPTIONS TO CERTAINCUSTOMERS THAT PURCHASED EXCHANGE TRADED FUNDS;3.RULE 10B-10 OF THE SECURITIES EXCHANGE ACT OF 1934 BY FAILING TO PROVIDECERTAIN CUSTOMERS WITH TRADE CONFIRMATIONS FOR CERTAINSECURITIES TRANSACTIONS; AND NYSE RULE 342:A.IN THAT THE FIRMFAILED TO PROVIDE FOR, ESTABLISH AND MAINTAIN APPROPRIATEPROCEDURES OF SUPERVISION AND CONTROL INCLUDING A SYSTEM OFFOLLOW-UP AND REVIEW, WITH RESPECT TO ITS OPERATIONAL ANDTECHNOLOGICAL ACTIVITIES RELATING TO THE DELIVERY OF PRODUCTDESCRIPTIONS AND PROSPECTUSES;B.IN THAT THE FIRM FAILED TOPROVIDE FOR, ESTABLISH AND MAINTAIN APPROPRIATE PROCEDURES OFSUPERVISION AND CONTROL INCLUDING A SYSTEM OF FOLLOW-UP ANDREVIEW, WITH RESPECT TO ITS OPERATIONAL AND TECHNOLOGICALACTIVITIES RELATING TO THE DELIVERY OF CERTAIN TRADECONFIRMATIONS AND VARIOUS OTHER DOCUMENTS AS DESCRIBED INPARAGRAPH 1(B) ABOVE; ANDC. BY FAILING TO EVIDENCE ITSSUPERVISORY REVIEW OF CERTAIN LETTERS OF AUTHORIZATIONRECEIVED FROM CUSTOMERS, WHICH REQUESTED A CHANGE OFADDRESS.SANCTION: CENSURE, A $1,250,000 FINE AND AN UNDERTAKING

Regulator Statement **10/4/07**THE DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESSON OCTOBER 2, 2007 AND THE FINE BECAME PAYABLE ON THAT SAMEDATE. CONTACT: PEGGY GERMINO 212-656-8450.

Sanctions Ordered: CensureMonetary/Fine $1,250,000.00

Decision




Regulator Statement **10/4/07**THE DECISION BECAME FINAL AS OF THE CLOSE OF BUSINESSON OCTOBER 2, 2007 AND THE FINE BECAME PAYABLE ON THAT SAMEDATE. CONTACT: PEGGY GERMINO 212-656-8450.


Initiated By: NEW YORK STOCK EXCHANGE REGULATION





Docket/Case Number: NYSE HEARING BOARD DECISION 07-112


Other Product Type(s): EQUITY - OTC, TAXABLE FIXED INCOME PRODUCTS, EXCHANGE TRADEDFUNDS.

Allegations: THE NEW YORK STOCK EXCHANGE ("NYSE") ALLEGED LEHMANBROTHERS INC. ("LEHMAN") VIOLATED (I) NYSE RULE 401 BY FAILING TOENSURE COMPLETE DELIVERY OF PROSPECTUSES IN CONNECTION WITHSALES OF CERTAIN REGISTERED SECURITIES DURING THE PERIOD JULY2003 THROUGH OCTOBER 2004, AND BY FAILING TO ENSURE THEDELIVERY OF CERTAIN REQUIRED CLIENT COMMUNICATIONS BETWEENOCTOBER 2003 AND JUNE 2004; (II) NYSE RULE 1100(B) BY FAILING TOENSURE COMPLETE DELIVERY OF PRODUCT DESCRIPTIONS INCONNECTION WITH SALES OF CERTAIN EXCHANGE TRADED FUNDSDURING THE PERIOD JULY 2003 THROUGH OCTOBER 2004, (III)SECURITIES AND EXCHANGE ACT RULE 10B-10 BY FAILING TO PROVIDECERTAIN CUSTOMERS WITH TRADE CONFIRMATIONS FOR CERTAINSECURITIES TRANSACTIONS BETWEEN MARCH AND JUNE 2004; (IV) NYSERULE 342 BY FAILING TO MAINTAIN SUFFICIENT SUPERVISORYPROCEDURES CONCERNING THE DELIVERY OF PRODUCT DESCRIPTIONSAND PROSPECTUSES, CONFIRMATIONS, AND OTHER REQUIRED CLIENTCOMMUNICATIONS.



Resolution:


Sanctions Ordered: CensureMonetary/Fine $1,250,000.00

Stipulation and Consent




Sanction Details: A CENSURE AND UNDERTAKING TO PROVIDE A WRITTEN CERTIFICATIONTHAT LEHMAN'S CURRENT POLICIES AND PROCEDURES, INCLUDINGWRITTEN SUPERVISORY AND OPERATIONAL POLICIES AND PROCEDURES,REGARDING THE DELIVERY OF PROSPECTUSES AND PRODUCTDESCRIPTIONS ARE REASONABLY DESIGNED TO ENSURE COMPLIANCEWITH THE FEDERAL SECURITIES LAWS AND NYSE RULES APPLICABLE TOTHE DELIVERY OF PROSPECTUSES AND PRODUCT DESCRIPTIONS.

Firm Statement WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, LEHMAN ENTEREDINTO A STIPULATION OF FACTS AND CONSENT TO PENALTY, IN WHICHLEHMAN AGREED TO A CENSURE, A FINE OF $1,250,000 AND ANUNDERTAKING TO PROVIDE A WRITTEN CERTIFICATION THAT LEHMAN'SCURRENT POLICIES AND PROCEDURES, INCLUDING WRITTENSUPERVISORY AND OPERATIONAL POLICIES AND PROCEDURES,ARE REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH THEFEDERAL SECURITIES LAWS AND NYSE RULES APPLICABLE TO THEDELIVERY OF PROSPECTUSES AND PRODUCT DESCRIPTIONS.


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Allegations: LEHMAN BROTHERS INC., AN EXCHANGE MEMBER ORGANIZATION, WASCENSURED, FINED IN THE AMOUNT OF 50,000 AND WAS ORDERED TO PAYDISGORGEMENT IN THE AMOUNT OF $263,205 FOR THE FOLLOWINGCONDUCT. LEHMAN CONTROLLED UNHEDGED AGGREGATE LONGCALL/SHORT PUT SPY OPTION CONTRACTS AND AGGREGATE SHORTCALL/LONG PUT SPY OPTION CONTRACTS IN ITS AGGREGATEDPROPRIETARY ACCOUNTS IN EXCESS OF THE ESTABLISHED POSITIONLIMIT. LEHMAN'S PROPRIETARY ACCOUNT EXERCISED 1,277,529 SPYLONG CALL OPTION CONTRACTS, 977,529 CONTRACTS IN EXCESS OF THEESTABLISHED EXERCISE LIMIT. IN ACCEPTING THIS OFFER OFSETTLEMENT, THE BUSINESS CONDUCT COMMITTEE CONSIDEREDCERTAIN MITIGATING FACTS, INCLUDING THE FACT THAT AT THE TIME THETRANSACTION IN THIS MATTER WAS EXECUTED, LEHMAN PAID TO THEEXCHANGE APPROXIMATELY $251,000 IN SPY LICENSING FEES. AS ARESULT, THE DISGORGEMENT AMOUNT WOULD HAVE BEEN SET-OFF BYTHE AMOUNT OF THESE FEES AND LEHMAN'S DISGORGEMENT AMOUNTWOULD HAVE BEEN ONLY APPROXIMATELY $11,000. DUE TO A REFUND BYSTANDARD & POOR'S OF THESE FEES, TO BE FORWARDED TO LEHMAN BYTHE EXCHANGE, THIS SET-OFF IS NO LONGER APPLICABLE. (CBOE RULES4.1 – JUST AND EQUITABLE PRINCIPLES OF TRADE, 4.2 – ADHERENCE TOLAW, 4.11 – POSITION LIMITS AND 4.12 – EXERCISE LIMITS.)














Resol

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LEHMAN BROTHERS INC. · LEHMAN BROTHERS INC. SEC# 7506 8-12324 Main Office Location Mailing Address Business Telephone Number Doing business as LEHMAN BROTHERS INC. 646-348-7100 Regulated