Junk-bond market co-creator
Fred Joseph, 72, who as chief executive of investment bank Drexel Burnham Lambert helped create the modern junk-bond market in the 1980s before the firm’s collapse, died Fridayin New York of multiple myeloma, said John F. Sorte, chief executive of Morgan Joseph & Co. Inc.
Joseph arrived on Wall Street in 1963, joining E.F. Hutton. He later moved to Shearson Hammill, rising to chief operating officer before leaving to join Drexel’s corporate finance department in 1974.
Frederick Harold Joseph was born April 22, 1937, in Boston and earned bachelor’s and master’s degrees from Harvard.
He was named Drexel chief executive in 1985. With fellow executive Michael Milken, the company expanded the market for low-rated bonds, which most investors at the time considered too much of a risk but which quickly began to dominate the financial world.
The proceeds from junk-bond sales helped finance a wave of cutthroat corporate buyouts and made Drexel one of the most revered firms on Wall Street. But the company ultimately succumbed to a four-year criminal investigation into charges that Milken and others had used inside information to trade shares of companies considered takeover targets.
Milken pleaded guilty in 1989 to securities violations, served 22 months in prison and was fined $600 million. The scandal drove Drexel to file for Chapter 11 bankruptcy protection the next year.
Joseph eventually accepted blame for failing to supervise Milken. Joseph was banned from any managerial position with a securities firm for some time and agreed to pay a $3-million fine to federal thrift regulators.
He was chairman of consulting firm Clovebrook Capital from 1994 to 1998, and then was an advisor and managing director at ING Barings for three years.
With a group of partners, he later acquired Morgan Lewis Githens & Ahn, which was renamed Morgan Joseph & Co. Inc., an investment bank focused on serving mid-sized companies.
Advocate for general aviation
Edward Stimpson, 75, an aviation advocate who pushed to rejuvenate struggling small aircraft manufacturers in the 1990s by limiting lawsuits against them, died Wednesday in Boise, Idaho, after a five-month illness.
He died from complications related to lung cancer, though he wasn’t a smoker, said his sister, Catharine Stimpson.
Stimpson, president of the General Aviation Manufacturers Assn. for 25 years, was a major proponent of legislation signed by President Clinton in 1994 to prevent general aviation companies from being named as defendants in lawsuits in crashes of small planes 18 years old or older.
By 1994, a wave of lawsuits was blamed for a downturn at small aircraft manufacturers such as Beech Aircraft Co. and Cessna Aircraft Corp., costing 100,000 industry jobs. Annual sales of single-engine planes averaged 13,000 from 1965 to 1982 but had dropped to just 500 by 1993.
Stimpson, who held a private pilot’s license, retired from the manufacturers association in 1996 to become chairman of Be a Pilot, an industrywide education and research program aimed at increasing the number of people learning to fly.
Stimpson was born in June 1934 in Bellingham, Wash. He graduated from Harvard College and received a graduate degree from the University of Washington.
In 1998, Stimpson received the Wright Brothers Memorial Trophy for public service in aviation.
-- times staff and wire reports