NEW YORK ( TheStreet) --The daily stock performance of the financial sector was overshadowed on Friday by the long shadow of the Lehman Brothers failure. The Lehman saga reached a new low in being the top financial story on Friday. The bankruptcy examiner assigned the case of providing an autopsy on Lehman's failure released a 2,000 page magnum opus on massive malfeasance that could have made Herman Melville, Leo Tolstoy and the authors of the 9/11 Report feel like insignificant wordsmiths. Citigroup ( C) and JPMorgan Chase ( JPM) were nominated by the Lehman bankruptcy examiner as best supporting villains in the implosion of Lehman. Both Citi and JPMorgan exacerbated the problems Lehman faced in the preamble to its bankruptcy by demanding increased collateral and changing guarantee agreements, exerting additional pressure on Lehman's already parched liquidity. Citigroup shares seemed to pick up some negative Lehman karma to close the week. Citi shares had rallied all week to close above $4 on Thursday. It was the first time that Citi shares closed above $4 since early December 2009. The Citi question on Friday was supposed to be, "Are Citi shares now poised to reach for $5." Yet, Citi shares declined 5% on Friday, to a share price back below the $4 mark. Citi shares were at $3.96, or a loss of 22 cents, in the late afternoon. It was another day of more than one billion shares traded in Citi, however, unlike the previous days' bullish billion-share plus buying streak. The ghosts of Lehman did not haunt JPMorgan to the extent that they spooked Citi investors on Friday. JPMorgan was down marginally late on Friday afternoon on relatively light trading. JPMorgan Chase CEO Jamie Dimon spoke publicly on Friday in support of financial reform in Washington, a concession from Wall Street to the Democrats' effort to move ahead even amid Republican opposition. Dimon said he remained opposed to a stand-alone regulatory agency and was opposed to all derivatives trading having to move through clearinghouses, but that Wall Street supported a majority of the financial reform package.
Bank of America -- which announced this week its plans to stop charging bank customers overdraft fees -- like Citi shares ran into resistance on Friday. Bank of America shares were down 2.3% in the late afternoon to $16.71, or a loss of 41 cents.
In fact, a triumvirate of embattled financial firms in recovery mode that had rallied earlier in the week ran into a more pessimistic market to close the five-days trading period on Friday. AIG ( AIG) joined Citi and Bank of America in running out of steam on Friday, with AIG shares declining 3%, or $1.08, to $34.05 late on Friday afternoon. Friday was a day on which Lehman Brothers former head honcho Richard Fuld was judged as "negligent" in his management. Yet it was a relatively ambivalent day of trading sentiment on the financial sector overall, with the financial sector down less than half a percentage point late on Friday afternoon. Most of the big financial firms, which had not rallied to the extent of the triumvirate of Citi, AIG and Bank of America, hovered near flat share value to close the week. Goldman Sachs ( GS) was up less than a percentage point late on Friday afternoon, while Morgan Stanley ( MS) was down less than half of one percent in late trading. After a three-day climb of 2% in the financial sector between Tuesday and Thursday -- a rally that mirrored the rise of the S&P 500 Index -- financials gave back some of the week's rally on Friday, up 1.1% for the week by the final hour of trading on Friday afternoon. -- Reported by Eric Rosenbaum in New York. >>See our new stock quote page. Follow TheStreet.com on Twitter and become a fan on Facebook.