EMC’s Business Finance blog

U.S. investment bank Lehman Brothers Holdings (LEH.N: Quote, Profile, Research) raised $6 billion (3 billion pounds) to shore up capital and warned of a much steeper than expected quarterly loss, rattling investors, just as a rival completed a record fund-raising.

Lehman said it expects a loss of $2.8 billion for its second quarter after losses on trading and hedging. It plans to rebuild capital by offering shares and convertible preferred stock through public offerings, diluting the stakes of existing shareholders.

Shares in Wall Street’s smallest major investment bank tumbled nearly 13 percent, hitting a new intraday low since their plunge in mid-March on the day JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) announced plans for an emergency rescue of Bear Stearns Cos Inc.