Dishonest Broker May Cost Firms $100m

CNN reports that Lehman Brothers and Societe Generale's US brokerage unit, SG Cowen, face paying up to $100m in restitution after a broker who worked for the two firms admitted stole client funds and falsified brokerage statements.

The Wall Street Journal cites unnamed 'people close to the inquiry' and claims that both firms will repay the funds misapproriated by former employee Frank Gruttadauria. A settlement is currently being thrashed out between the firms and regulators.

Lehman is already believed to have paid out around $21m to investors who suffered as a result of Gruttadauria's 15 month tenure at the firm. Cowen has paid over some monies to clients and is continuing to resolve a number of other claims. The total bill for the two firms could be around $100m.

Gruttadauria is currently serving a seven-year prison sentence.

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