UPDATE: Lehman demotes its CFO right after raising capital. "'News like this, totally unexpected on the heels of a large share offering, rattles investors,' '' said David Killian, a portfolio manager at Malvern, Pennsylvania-based Stoneridge Investment Partners, which sold the last of its Lehman shares yesterday," in Bloomberg story

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EARLIER: The New Jersey Division of Investment, which raises money to pay state workers' and teachers' pensions, said Monday it purchased $120 million worth of Lehman stock on Monday at $28 a share, plus $60 million in preferred stock that converts to common within three years.

The sale was designed to boost New Jersey's exposure to financial service stocks, the state said Monday. "Based on our research and first-hand experiences with the company in a variety of areas, we have a high regard for Lehman's business lines and management team," the state added.

Too bad they couldn't have waited a few days. Despite infusions from New Jersey taxpayers and others, Lehman stock was trading at $24 Thursday as Merrill Lynch and others cut longterm targets for the stock. Bloomberg story

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