I.W. ‘Tubby’ Burnham, 93; Founded Securities Firm

I.W. “Tubby” Burnham, who founded Drexel Burnham Lambert Inc., the securities firm that later collapsed after junk-bond trader Michael Milken was jailed for securities fraud, died Monday of a heart attack on his yacht off the Virginia coast. He was 93.

Burnham was born in Baltimore, earning the nickname “Tubby” as a teenager after his parents fattened him up as part of a recovery from typhoid fever. He later lost the weight, and was captain of the lacrosse team while at the Wharton School of the University of Pennsylvania. He graduated in 1931.

His Wall Street career began soon after at Burnham Herman & Co., a firm managed by his uncle, where he was paid $20 a week.

Burnham formed his own brokerage firm, Burnham & Co., in 1935. A veteran of World War II, Burnham served as a pilot and base commander in the Civil Air Patrol and was later stationed in the Pacific as a lieutenant in the U.S. Naval Reserve.

Burnham’s firm became Drexel Burnham Lambert in 1973 when the firm acquired the assets of Drexel Firestone.

He convinced Milken, then of Drexel Firestone, to stay on after the purchase. Years later, as Milken built up the firm’s junk-bond business, Burnham, who remained a director of the firm after stepping down as chief executive officer in 1973 and chairman in 1984, warned that the firm might run into trouble.

Drexel filed for bankruptcy in 1990, two years after pleading guilty to charges of insider trading and stock manipulation.

Drexel was liquidated in 1996.

Burnham is survived by his son; daughter Wendy Burnham Morris; seven grandchildren; and nine great-grandchildren.