Shad Continues to Weigh Top Job at Drexel

The former head of the Securities and Exchange Commission has moved into an office at Drexel Burnham Lambert Inc. but has not formally accepted the chairman’s job, the troubled investment firm said Wednesday.

John S. R. Shad, who ordered the government’s huge securities fraud investigation of Drexel in 1986, has been working out of an executive suite at the Wall Street firm for several weeks, Drexel spokesman Steven Anreder said.

Drexel, seeking to repair its image after agreeing to a record $650-million settlement with the government for a range of criminal securities law violations, offered Shad the post in January.

The nation’s fifth-largest investment firm is negotiating with the SEC to settle separate civil charges that include insider trading.

‘Would Wait’

Shad, 65, resigned later in January as U.S. ambassador to the Netherlands, where he served from June, 1987. He ran the SEC, the federal agency that regulates the nation’s securities markets, from 1981 to 1987.

Anreder said Shad would not decide whether to accept the Drexel chairman’s job permanently until after the SEC settlement is completed. The deal has been expected for months, but negotiations recently deadlocked.

Anreder would not say whether Shad was waiting for the SEC talks to end to avoid a possible conflict of interest. The spokesman also said he didn’t know whether Shad was getting paid.

“He has indicated all along he would wait until the SEC settlement is in place. He set that as one of his requirements,” he said.

If Shad accepts the job, it would mark an ironic twist in the legal battle. He ordered the massive government probe of Drexel in late 1986, after the firm was implicated in widespread wrongdoing by former speculator Ivan F. Boesky, who is serving a three-year jail term.

In addition, Drexel Chief Executive Frederick H. Joseph was once hired by Shad 20 years ago when Shad ran the now-defunct investment firm E. F. Hutton & Co.

Shad was out of the office and unavailable for comment, a secretary said.

Anreder would not specify Shad’s activities in the office but said he was “familiarizing himself with the firm, people, doing the things one does in that process.

“He is not working for the firm,” Anreder said. “He’s been examining the firm, getting to know it, doing his own kind of analysis.”