Lawyers for Drexel Burnham Lambert Inc. want...

Lawyers for Drexel Burnham Lambert Inc. want the judge presiding over the company’s securities fraud case removed because of an alleged conflict of interest involving his wife’s family business, according to a report published Tuesday.

The motion to have U.S. District Judge Milton Pollack disqualify himself was contained in sealed court documents and revealed by unidentified sources, the New York Times reported.

Pollack, who has a reputation for being a tough judge, had said he would hear arguments on the motion at a hearing Oct. 11.

Neither Pollack nor Drexel’s chief attorneys from the law firm Cahill Gordon & Reindel were available for comment Tuesday.

The Securities and Exchange Commission charged that Drexel and other defendants, including the firm’s “junk bond” chief, Michael Milken, schemed with now-imprisoned speculator Ivan F. Boesky to trade on inside information, manipulate stock, bully Drexel clients and engage in securities frauds.

Drexel has denied all charges.

The Times said the motion to oust Pollack raised a potential conflict involving Drexel’s role in the acquisition of a Texas retail clothing chain, Palais Royal of Houston, and the company’s chairman, Moselle Pollack, who is the judge’s wife. If the deal is completed, the Pollacks stand to receive about $9 million, the Times quoted sources as saying.

Drexel’s attorneys want Pollack removed because they feel he might appear to be biased in favor of Drexel, which raising financing for the deal, the newspaper said.