NEW YORK — For the last six months, Erin Callan was the public face of Lehman Bros. Holdings Inc., making frequent TV appearances to defend the firm against critics who said it was in financial trouble.
On Thursday, Callan was the one in trouble, removed as finance chief three days after Lehman disclosed huge losses stemming from the sub-prime mortgage crisis.
Lehman also dumped longtime executive Joseph Gregory as president and chief operating officer. Callan and Gregory will remain at the company in unspecified roles.
Herbert "Bart" McDade III, head of Lehman's equity division, was named to succeed Gregory, while Ian Lowitt, the firm's co-chief administrative officer, will replace Callan.
Callan's ouster highlights the financial straits into which Lehman has plunged as well as the challenges faced by women in Wall Street's top echelon.
It was the third time in 18 months that the highest-ranking woman on Wall Street lost her title while her male boss -- the chief executive -- kept his.
Callan got the job in December in part to assume a visible public role, experts said, and the telegenic and well-regarded 42-year-old quickly became a media favorite. She was the subject of numerous news articles, many of which took note of her good looks and fashionable appearance.
But the visibility also transformed Callan into a lightning rod for Lehman's critics and may have contributed to her downfall, experts said.
"They did make quite a high-profile person out of her, and perhaps that's part of what's wrong here," said Martha Burk, director of the Woman on Wall Street Project at the National Council of Women's Organizations in Washington.
The management shake-up capped a tumultuous several days at Lehman, which said Monday that it lost $2.8 billion in its fiscal second quarter -- its first loss since going public in 1994 -- in part because of troubled real estate assets.
The disclosure of the loss months after Lehman had appeared to weather the credit storm hurt the firm's credibility and raised doubts about its management of its finances.
Lehman has come under intense scrutiny since Bear Stearns Cos. collapsed in March. Like Bear, Lehman is smaller than its Wall Street rivals and a major progenitor of mortgage-related securities.
Callan was an unorthodox choice as finance chief. She spent most of her career as a tax lawyer and investment banker and lacked extensive experience in a corporate finance department.
Though intelligent, Callan didn't have the right background to handle the complexities of the finance chief's job, said Richard Bove, an analyst at Ladenburg Thalmann & Co. He said Callan was chosen in part to be a "spokesperson for the stock."
"You can take any guy who's good at doing A and put him into B," Bove said, "and he's not going to do well at B."
Nonetheless, Callan is thought to have made some good moves in the job -- as well as several missteps.
On the positive side, she raised capital early in the year that helped Lehman weather the Bear Stearns blow-up.
But Lehman also made a bad bet this year when it increased its holdings of some risky assets. And the firm got burned when some moves meant to limit its losses in the credit crisis backfired in the second quarter, which ended May 31.
Several experts said that any finance chief, regardless of sex, would have been bounced given Lehman's travails.
As a Wall Street legend who pulled the firm through past crises, Lehman Chief Executive Richard Fuld had more protection, so someone else had to take the fall, these experts said.
"This is what happens in corporate America," said Bruce Foerster, a former Lehman executive and president of advisory firm South Beach Capital Markets. "It's not a question of whether it's fair."
Nevertheless, the media glare engulfing Callan made her a conspicuous target.
One story last month included comments from her personal clothes shopper, as well as from a female stock analyst who dubbed her the "best accessorized" finance chief on Wall Street.
"Because there are so few women in the first place, there's immense pressure on these women to be poster children of female leadership," said Nicki Gilmour, publisher of the Glass Hammer, an online publication catering to professional women. "There seems to be an ugly trend that if they do get too many [media] profiles done they seem to lose their jobs."