NEW YORK - THE chief executive of fallen investment bank Lehman Brothers will step down by the end of the year without severance or a bonus, a spokesman said on Wednesday.

He will stay on as chairman of the board.

Pressure has mounted on Mr Richard Fuld for his role in the demise of what was once the fourth-largest US investment bank.

He has been a prominent target of public outrage over risky practices on Wall Street which helped send the economy spiralling into turmoil.

The announcement comes one day after New York State Comptroller Thomas DiNapoli accused Mr Fuld of leading Lehman to its chaotic, pre-dawn bankruptcy filing on Sept 15.

'Mr Fuld's decisions drove the company toward ruin, as his board stood idly by', Mr DiNapoli argues in court papers filed late on Tuesday asking a bankruptcy judge to appoint an independent investigator in the case.

Mr Fuld had offered to resign after Lehman sold its broker-dealer business to Barclays Capital on Sept 20, but Chief Restructuring Officer Bryan Marsal asked him to stay until the end of the year to help with the transition, a spokesman said.

The bankruptcy filing of Lehman Brothers Holdings was the biggest in US history.

Since the filing, Mr Fuld - along with 11 former or current Lehman managers or officers - have been subpoenaed by federal prosecutors in three grand jury investigations.

Those are being led by investigators in the Southern and Eastern Districts of New York and the District of New Jersey. -- AP