This came across my desk yesterday from NYSE Euronext, which explains how Lehman Brothers’ bankruptcy filing will impact its specialist operations on the New York Stock Exchange trading floor.

Though Lehman Brothers Holdings filed for Chapter 11 of the U.S. Bankruptcy Code yesterday, none of the other broker-dealer subsidiaries or other subsidiaries of LBHI will be included in the chapter 11 filing and all of the broker-dealers will continue to operate.

Goldman Sachs has stepped into run Lehman Brothers’ specialist operations on the floor of the New York Stock Exchange, according to a statement from NYSE Euronext issued yesterday.

Goldman Sachs assumed responsibility for NYSE-listed securities in which Lehman Brothers MarketMakers, a division of Lehman Brothers, has served as specialist, according to a statement from NYSE Euronext yesterday.
“Lehman specialist staff and technology will remain in place, and Goldman Sachs will oversee staff, trading and risk management,” according to NYSE Euronext. Goldman will also be responsible for clearing activity of the Lehman specialist unit in these securities going forward, said the statement. “This arrangement will remain in place until a more permanent arrangement can be arranged,” states the exchange.”

The stock (LEH) of Lehman holding company (LBHI) continues to trade on NYSE/Arca. The last trade was 22 cents at 11:00 am.
Meanwhile the Wall Street Journal is reporting that Lehman is in talks with Barclays PLC about buying its core brokerage business. “It’s a fluid and rapidly changing situation,” comments Scott Peterson, an NYSE Regulation spokesman. There could be other announcements coming today regarding Lehman’s exchange operations should a buyer for the brokerage unit emerge.