Lehman Brothers' bankruptcy is posing significant problems for at least two of its hedge fund clients - Phil Falcone's Harbinger Capital Management and Joseph Oughourlian's Amber Capital Management. Both firms have hundreds of millions of dollars in exposure to Lehman's London unit.
For the once-soaring Harbinger, credit default swaps with Lehman could help put it into negative territory for the year. Through September 19, Harbinger had lost most of the 42% in gains it reported in this year's first half, leaving it up about 2%. The losses were magnified by Harbinger's inability to access or trade around $2 billion