Filling in the Facts on Shearson Lehman

Scot Paltrow's series of articles on the securities industry, "Investors At Risk," presented an inaccurate picture of Shearson Lehman Bros.

His reporting on the firm was unbalanced and focused, in many cases, on events that took place up to 10 years ago.

What Paltrow--who received our fullest cooperation--failed to mention is the considerable progress Shearson Lehman has made in the compliance area.

Since 1990, we have reduced the number of client complaints by half. Since 1991, we have dramatically improved our New York Stock Exchange ranking on compliance and complaint issues. In a recent standard audit of 55 Water St., the Shearson office cited by Paltrow, the Exchange confirmed that dramatic improvement had been accomplished.

In January of this year, we created new positions within each division of the Private Client Group: divisional legal officers and divisional compliance officers.

This unique concept has had dramatic results in preventing problems through training, etc. at the locations where our financial consultants (FCs) and clients do business.

Our on-going national training program sponsors seminars across the country on compliance and legal issues.

Shearson's code of ethics, principles of professionalism and telemarketing of prospective clients policy hold our FCs accountable for acting with the highest level of professionalism. And our deferred compensation program rewards FCs for good compliance records.

Long before Paltrow began researching his article, we had begun to terminate FCs who were not performing up to our high standards of conduct.

Paltrow's reluctance to provide your readers with a balanced objective report leaves them with a troubling and inaccurate impression of the brokerage industry.

It also does a terrible injustice to the 17,000 people (including 8,800 financial consultants) in the Private Client Group at Shearson Lehman Bros. who ensure that clients receive the highest quality service.


New York City

The writer is president of Shearson's Private Client Group. Editor's note:

Shearson declined to make available figures on the number of complaints by clients. A company spokesman said the statistics are "confidential" and that it is against Shearson's policy to release them.

In addition, the New York Stock Exchange denies that it maintains any ranking of member firms "on compliance and complaint issues." An exchange spokesman said there is no list indicating where Shearson ranks relative to other firms. Although a Shearson spokesman insisted that such a list exists, he declined to share any such information with The Times.

Both Shearson and the NYSE also refused to make public any part of the recent stock exchange audit of Shearson's 55 Water St. office. The NYSE spokesman declined to comment on Plumeri's description of the audit's findings.

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