A spokesman for Lehman Brothers was quoted by the Daily Telegraph as saying: "Two traders in our European equities division have been suspended."
"Normal internal controls identified the issues," he added. "The matter is not related to fraud."
Although the spokesman refused to reveal further details, he did say: "Sums involved are not material but the matter is being reviewed in line with our usual procedures."
The two traders in the European equities division are believed to be the only parties involved in the issue and ceased working at the bank as of February 28th.
Lehman Brothers said that the Financial Services Authority has been informed.
The issues are understood to be linked to share valuations of "exotic" equity derivatives.
Shares in Lehman Brothers dropped by 4.1 per cent to $46.12 as a result of the news.
Banks are becoming increasingly stringent on risk control systems after rogue trader Jerome Kerviel lost Societe General $7.51 billion due to taking unauthorised positions.