Lehman Brothers Holdings Inc. was boosting its investment in IT even as it headed toward bankruptcy.

In the quarter ended Aug. 31, the New York-based company spent $309 million on technology and communications, up from $282 million in the same period last year.

Lehman Brothers' ICT (information and communications technology) costs rose 18 percent in 2007 from 2006 to reach $1.145 billion, reflecting increased costs from the continued expansion of its investment management systems, according to filings by the bank.

The firm is also heavily involved in a number of technology-related projects in London and elsewhere. Earlier this summer, Lehman Brothers announced a joint venture with London Stock Exchange Group PLC (LSE) to create a high-speed trading platform for equities called Baikal.

Slated for launch in the first quarter of 2009, Baikal would combine a "dark liquidity pool" with algorithmic trading functionality to allow anonymity to traders so that their strategies remain secret.

Industry commentators see the project as the LSE's attempt to shore up its offerings in the face of increased competition from new rivals that have blossomed in the past year.

An LSE spokeswoman said the exchange remains committed to its Baikal dark-pool project remains even after its project partner filed for bankruptcy protection. "Baikal is an important market-efficiency solution for institutional business," she said.

"Since its announcement in June, we have held around 80 meetings with potential users of the platform," the spokeswoman said. "It has had a very positive reception from institutional investors, and a number of investment banks and brokers have expressed an interest in taking an equity stake in Baikal as well as using its services."

On Sept. 5, Credit Suisse Group announced a partnership deal with Lehman Brothers to link their respective dark pools in the U.S.—named AES CrossFinder and LXSM. Credit Suisse declined to comment on the impact of Lehman's announcement on that deal.

"The units of Lehman currently selling technology to other banks are likely to be sold off," said Ralph Silva, a senior analyst at financial services advisory firm Tower Group Inc.

"All banks are concerned about the ramifications of losing technology, and want more technology to be in-house," he said. "So in this kind of situation, they tend to negotiate to get hold of the code or the entire systems. In Lehman's case, the phone calls are probably already happening."