Lehman in Free Fall as Default Fears Mount

Editor's note: Our "On the Brink" series will provide daily insight into the financial firms facing capital shortfalls and the growing pressure from short sellers in the market.

Updated from 12:45 p.m. EDT.

Lehman Brothers(LEH Quote) shares fell 45% Tuesday, as a prospective deal to raise capital hit a snag and concern the firm would default on its debt mounted.

Lehman Brothers shares fell $6.36, or 45%, to $7.79 at Tuesday's close after Dow Jones reported that Jun Kwang-woo, chairman of the Financial Services Commission in South Korea said Korea Development Bank and Lehman have ended discussions. Mr. Jun could not be reached and a Lehman Brothers spokesman declined to comment. ...