P. M. BRIEFING : Drexel Settlement Left in Limbo

A federal appeals court today refused to remove a roadblock to the final settlement of civil securities fraud charges against Drexel Burnham Lambert Inc.

The settlement Drexel reached with the Securities and Exchange Commission earlier this month has been blocked from final approval because of a legal challenge to the district judge presiding over the case.

The SEC and Drexel asked the U.S. 2nd Circuit Court of Appeals to modify its stay of all proceedings before Judge Milton Pollack in the Drexel civil case to allow another judge to consider and possibly approve the settlement.

But the 2nd Circuit said, “That decision does not rest with us,” and refused to intervene. The decision leaves the landmark settlement in limbo.