Frederick Joseph, chief executive of Drexel Burnham Lambert Inc., told employees Friday that he no longer expects to receive any warning before the Securities and Exchange Commission files charges against the investment banking firm.
A Drexel spokesman confirmed that Joseph spoke to all employees via a public address system and said he had received word from SEC lawyers that the government wouldn't give the firm any warning before a long-expected lawsuit is filed. Drexel has been under investigation since 1986 as an outgrowth of the Ivan F. Boesky insider trading scandal.
As reported, Drexel said in June that the SEC had approved a lawsuit that would accuse Drexel and several employees of violating federal securities laws. But the SEC had decided not to file the lawsuit immediately. Joseph earlier this month told employees that the firm would receive 24-hour advance notice of the lawsuit being filed. But he said Friday that this wasn't any longer the case. Despite some contacts between Drexel lawyers and the SEC, the firm has failed to reach any settlement with the SEC.
The Drexel spokesman, however, said Friday that he didn't have any information about when the lawsuit would actually be filed. SEC officials refused to comment on the pending investigation. Drexel has consistently denied any wrongdoing.