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The most powerful woman on Wall Street—at least according to Portfolio—is out of a job. Erin Callan, the chief financial officer of Lehman Brothers and the woman who has been on the firing line since Lehman accounced a series of unexpectedly large write-downs (and a disastrous quarterly loss), has been demoted. She'll stay at the bank, albeit not as CFO. And she's not the only one. Joe Gregory, the firm's president and chief operating officer, has been demoted, too.

Callan's rise and fall was particularly quick. When she was appointed CFO in 2007, she became an instant press magnet; several magazines proclaimed her to be the first woman in line to run a major financial institution. Her peers weren't nearly as amused, however, not necessarily because they were sexist pigs, which, admittedly, many of them are. There were concerns about Callan's experience—she was a lawyer by training, after all, and didn't have deep financial expertise. Her very frequent media appearances also stirred the pot. Unlike fellow Wall Street CFOs who tend to remain under the radar—Goldman Sachs's David Viniar has never appeared on CNBC—Callan was more than happy to pose for the cameras and sit down for an interview.

Of course, all that would have been okay if Lehman's name wasn't being whispered in the same sentence as Bear Stearns', if Dick Fuld weren't selling off assets and raising cash at a furious pace, and if investors like David Einhorn weren't intent on destroying the firm. Being described by one of your friends in the Journal as the "best accessorized CFO on Wall Street" is really never a good thing. And it looks even worse when six months later the bank you run is in danger of crumbling. And so Callan was forced out today, along with Joe Gregory, the firm's former president chief operating officer. Callan will remain at the firm; she'll be replaced by Ian Lowitt. Herbert H. MacDade III will take over for Gregory.

Callan, Gregory Out at Lehman [WSJ]