P. M. BRIEFING : $25-Million Drexel Fine Sought
The New York Stock Exchange wants to fine the fallen brokerage Drexel Burnham Lambert Inc. $25 million in connection with securities fraud and other crimes, sources confirmed today.
The fine would be the largest ever imposed on a securities firm, but whether the Big Board ever would collect is unclear. Drexel is liquidating after its parent company filed for bankruptcy court protection in February.
The NYSE has the ability to levy fines against member firms and executives for violating exchange rules and securities laws. The exchange has been mulling whether to fine Drexel since the firm pleaded guilty to six felony crimes and agreed to pay $650 million in government penalties last year.
The NYSE is also said to be considering bringing separate disciplinary proceedings against Drexel Chief Executive Frederick H. Joseph and other top officers of the firm. Those charges would be in connection with the activities of the firm and its former junk bond leader, Michael Milken, who pleaded guilty last month to six separate felonies and agreed to pay $600 million in penalties.