2 Ex-Salomon Bond Traders Accused of Fraud : Securities: SEC charges that they submitted false bids at Treasury auctions. The firm’s former chief executive may draw a fine.

In the first action against Salomon Bros. executives since a scandal that rocked Wall Street last year, the Securities and Exchange Commission on Wednesday filed civil fraud charges against two former government bond traders it accused of submitting false bids in U.S. Treasury securities auctions.

Sources close to the SEC also confirmed Wednesday that the commission is expected soon to levy a $100,000 fine against John Gutfreund, former Salomon chief executive, on a charge that he failed to adequately supervise the prestigious investment banking company.

Although the reported sum is insignificant, sources said the censure of Gutfreund would be unusually harsh, reflecting regulators’ anger that he failed to report the illegal activities of Salomon bond traders to authorities during the turbulent spring of 1991, although he had been informed of the violations.

Even top officials of Drexel Burnham Lambert, the investment banking firm that was plunged into bankruptcy after insider trading scandals destroyed its credibility, were not penalized for failure to supervise.

The civil complaint filed Wednesday named former government bond traders Paul W. Mozer and Thomas F. Murphy. Besides the fraud charges, the SEC accused Mozer of insider trading and of helping Salomon engineer $168 million in phony trading losses to avoid taxes.

Mozer, 37, of Sands Point, N.Y., and Tequesta, Fla., was a managing director in charge of Salomon’s government trading desk. Murphy, a resident of Rye, N.Y., was a managing director and Mozer’s assistant.

Both were fired after the bond trading scandal surfaced in August, 1991, prompting a management shake-up at Salomon and a number of probes by Congress and regulators.

Attorneys for the accused men said the SEC’s charges were unfair.

“This complaint is overreaching and overarching, and it is an unfair exaggeration of what took place,” said Mozer’s attorney, Stanley S. Arkin of the New York firm Chadbourne & Park. “It is reflective of the piling onto Paul Mozer by the government from the first day of this investigation.”

The SEC seeks unspecified civil fines against both men, repayment of any insider trading profit by Mozer and a court order barring him from ever serving again as an officer or director of a publicly held company.

Criminal investigations into suspected manipulations of the government bond market are being conducted by the antitrust division of the Justice Department, which has impaneled a grand jury, and the U.S. attorney’s office in Manhattan.

The charges against Mozer and Murphy follow an intensive 16-month investigation of the antiquated U.S. debt market, a system previously run largely by a gentlemen’s honor code. Over the last decade, the U.S. Treasury has issued $2.3 trillion in notes and bonds to finance the federal deficit and pay government bills.

New rules that resulted from the scandal are now in place.

Separately, Phibro Energy Inc., a sister unit of holding company Salomon Inc., said Wednesday that it would cut about 30% of its worldwide trading staff when it merges into the parent company before the end of the year. About 155 of Phibro Energy’s 450 jobs will be eliminated.

Salomon will take a fourth-quarter charge of $25 million to $35 million for related costs, such as severance payments.

Times staff writer Scot J. Paltrow in New York and Times wire services contributed to this story.