Two More German Federal Agencies' Investment In Lehman Brothers Revealed

Berlin, Germany (AHN) - Two German federal agencies invested $128 million with Lehman Brothers, Germany disclosed on Thursday. The admission came a day after investigators and prosecutors searched the Frankfurt office of KfW bank to determine if there was a criminal breach of trust when $410 million (319 million euro) of the bank's money was invested with Lehman Brothers on the throes of its bankruptcy declaration.

The two agencies which placed a total of $128 million with Lehman were one which handled public retirement insurance and another which held health insurance money. But the total exposure of the two government agencies is minimal compared to the overall investment with Lehman by German bank estimated at $1.26 to $6.3 billion (one to five billion euro).

But a government spokesman said the money of the two agencies is not lost since the amount is covered by bailout fund created by a group of private German banks. Lehman declared bankruptcy on Sept. 15, the day KfW placed $410 million in the U.S. investment bank.

KfW officials, in a statement, pledged to cooperate fully with the investigation by providing all data and documents needed by the prosecutors.

The two top KfW bank managers who handled the investment at Lehman were suspended and eventually fired.