Lehman Brothers demoted Erin Callan, its finance director, yesterday only six months into the job, and replaced Joseph Gregory, its chief operating officer.

Analysts said that the moves were an attempt by the struggling Wall Street brokerage to appease investors after the announcement on Monday of a much larger than expected loss for the second quarter.

Ms Callan will be replaced by Ian Lowitt, Lehman’s co-chief accounting officer, and Herbert McDade, the group’s head of equities, will succeed Mr Gregory. Ms Callan will move to an unspecified senior role in Lehman’s investment banking division, while Mr Gregory will remain with the group in a role that has yet to be determined.

Richard Fuld, the chairman and chief executive, said: “This has been one of the most difficult decisions either of us has had to make. Joe [Gregory] has been my partner for over 30 years and has been a driving force behind who we are today and what we have achieved as a firm.”

Hugh Johnson, the founder and head of Johnson Illington, a US fund manager, said that the departures reflected an impatience among investors who have watched US financial shares plunge to five-year lows.

He said: “Investors have been getting very frustrated and worried that Lehman Brothers is going to be another Bear Stearns [forced into a firesale after a run on the bank], despite Lehman’s repeated assurances that they have plenty of capital.”

He added: “In this era of Sarbanes-Oxley regulations directors are determined to be independent and objective to show transparency . . . If the results aren’t there somebody has to pay. It looks like the directors of Lehman felt obliged to make changes to keep investors happy.”

Ms Callan’s initial openness about the state of Lehman’s finances had pleased Wall Street. However, she lost some credibility as a straight shooter when she held private discussions with David Einhorn, the hedge fund manager, who then publicly accused her of changing her story about a Lehman private equity investment after he challenged her on the details.

Lehman Brothers shares have fallen by about 60 per cent this year as the company has been dogged by persistent rumours that it is on the brink of collapse. The group has repeatedly denied that it is short of cash.

On Monday Lehman disappointed investors by announcing a $2.8 billion (£1.4 billion) loss for the second quarter, which was much larger than had been expected. On the same day, the group announced plans to raise a further $6 billion through a rights issue, a process which it completed yesterday. The capital raising was slightly larger than expected and disappointed shareholders because it further dilutes their ownership of the bank.

The demotions of Ms Callan and Mr Gregory are the latest of many top-level changes in the banking industry after the sub-prime mortgage crisis. Lehman’s shares fell by 28 cents to $23.47 in midday trading.

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