Drexel Plea-Bargain Accord Reported Near

U.S. prosecutors are pressuring Drexel Burnham Lambert Inc. to accept a plea bargain settlement that would include paying a $750-million fine and admitting guilt to at least five felony counts to avoid prosecution for racketeering and securities fraud, the Wall Street Journal said today.

Quoting sources it did not identify, the newspaper said both sides were close to an agreement late Tuesday that would end one of the most intensive criminal securities fraud investigations in history.

A $750-million fine for securities fraud would dwarf the record $100 million in penalties paid two years ago by Ivan F. Boesky, the imprisoned stock speculator who turned state’s evidence and has been a key source of evidence against Drexel.

The nation’s fifth-largest securities firm has maintained innocence throughout the investigation, which has been colored by press leaks and speculation.

Drexel executives have said that they are interested in a settlement to avoid prosecution and a long trial but that admitting guilt would mark a stunning turnaround and open the firm to numerous civil lawsuits by investors who allege they were defrauded.

Steven Anreder, Drexel’s chief spokesman, declined to comment on the Journal story.

Drexel is privately owned and is one of the most profitable Wall Street firms, specializing in the market for high-yield, high-risk debt securities commonly called “junk bonds.”