Drexel Offers Former SEC Chairmen Shad, Hills High Positions
Drexel Burnham Lambert Inc. said today it has asked former Securities and Exchange Commission Chairman John S. R. Shad to become chairman of the Wall Street giant, which is trying to rebound from a securities-fraud scandal raised by the SEC when Shad ran it more than two years ago.
The nation’s fifth-largest securities firm also said it had asked former SEC Chairman Roderick M. Hills to become a Drexel director. Hills, who headed the SEC from 1975 to 1977 and is now a trade consultant, is the husband of Carla Hills, tapped by President-elect Bush as new U.S. trade representative.
Drexel said Chief Executive Officer Frederick Joseph, instrumental in the firm’s record $650-million settlement of securities fraud charges announced last month, would continue in that role. There had been rumors he might resign.
The announcements appeared to reflect an intensive effort by Drexel’s senior management to distance the firm as much as possible from the Wall Street insider trading scandal that has entangled it since late 1986.
“The firm’s objective is to develop a fresh outlook on the problems and opportunities it faces, and to continue to make an important contribution to the nation’s capital markets,” Drexel said in a brief statement disclosing the job offers to Shad and Hills.
“The firm continues to enjoy the loyalty and support of the vast majority of its employees, and investment banking, institutional and retail clients. After the settlement, the firm’s $2 billion of capital will remain among the largest in the securities industry and will be more than adequate to finance its future growth,” the statement said.
Leonardo Williams, information officer for the U.S. Embassy at The Hague, Netherlands, where Shad is ambassador, confirmed in a telephone query that he’d “been approached by Drexel Burnham about becoming chairman of the board.”
Earlier story, Part IV, Page 1.