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So Long, Corner Office: Wall Street's Most Powerful Woman Chooses Beach Life

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Erin Callan, once Lehman's CFO, is now keeping a low profile.

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For Erin Callan, life in the corner office came with a bit more angst than it does for most. And even though she has officially left the corporate world -- for now, anyway -- there is still the possibility that her brief time on top of her career could come back to haunt her.

Callan, for those who may need a reminder, was chief financial officer for Lehman Brothers before it fell. The tax attorney had risen through the bank's ranks until late 2007, when CEO Richard Fuld promoted her to CFO, the highest position held by a female on Wall Street.

Small, blond, and fashionable, Callan, who was just 42 at the time, immediately became a poster child for women in finance. A 2008 profile of Callan in Condé Nast Portfolio named her "Wall Street's Most Powerful Woman," and it included the requisite passages about her appearance:

Dwarfed by the high-backed leather chair in her office, Callan is wearing a short crocheted dress with a black belt slung low around her hips, gold hoop earrings, and knee-high caramel-colored high-heel boots. She seems to have rejected the path taken by some of her counterparts, who have erased all signs of their femininity to blend in with the pinstripes. "I don't subordinate my feminine side," she says. "I'm very open about it. I have no problem talking about my shopper or my outfit."


As it happened, any talk of shoppers and outfits would soon be muzzled by a devastating turn of events. By May 2008, a well-known hedge fund manager began publicizing his skepticism about Lehman's accounting. David Einhorn of Greenlight Capital was shorting Lehman shares, and he did not hesitate to tell anyone who would listen exactly why.

As the subprime troubles spread, Lehman and other banks with risky assets on their books began writing down their values. But Einhorn wasn't buying Lehman's reported numbers, and when he went directly to Callan with questions, her answers only raised more questions.

It wasn't long before more investors became Lehman skeptics, and by June 2008, just six months after being appointed CFO, Erin Callan was out at Lehman. Having lost credibility with The Street, Callan was seen as a fall gal for Fuld.

Callan quickly landed on her feet, at least temporarily. Just a month later, she took a job as head of the global hedge fund business at Credit Suisse (CS). By September, of course, history was made with the stunning bankruptcy of Lehman Brothers. It looked as though Callan had gotten out just in time.

But the drama wasn't over yet for Callan. Just a few months after she started at Credit Suisse, the company announced she had taken a personal leave of absence. By the end of February, it had changed its story to say that Callan was no longer with Credit Suisse, just five months after she started.

For more than a year, Erin Callan's whereabouts were a mystery. But last month, Fortune tracked her down. According to the magazine, the formerly most powerful woman on Wall Street is now living a secluded life in East Hampton, dating a New York firefighter, and her friends say she "looks better than ever."

Callan wouldn't comment to Fortune and she couldn't be reached for this article, but she's probably right to maintain a low profile. Shortly after the Fortune piece came out, the bankruptcy examiner in the Lehman case released a report that detailed how the bank used a little-known accounting trick called Repo 105 to help hide its riskiest assets. The report specifically criticized Callan for failing to disclose the accounting methods to analysts, and for failing to report red flags about them to Lehman's higher-ups.

Will Callan's six-month stint as Wall Street's most powerful woman be remembered as the most scandalous? So far, no criminal or civil charges have been filed relating to Repo 105, but it seems safe to say we haven't seen the last of Erin Callan, or her fashionable outfits.

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