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Fred Joseph
Former CEO of Drexel Burnham Lambert; Escaped Criminal Charges Despite Presiding Over Systemic Fraud
Chief Executive Officer, Drexel Burnham Lambert Inc.
Overview
Frederick H. Joseph was the CEO of Drexel Burnham Lambert during the period when the firm operated the most corrupt trading operation in Wall Street history under Michael Milken. As CEO, Joseph bore ultimate executive responsibility for the criminal enterprise that resulted in six corporate felony convictions and $650 million in fines. Despite his position at the top of the organization, Joseph was NEVER criminally charged. The SEC barred him from serving as CEO of a securities firm, but he never spent a single day in prison. He later returned to the financial industry at Morgan Stanley in a compliance role. Meanwhile, over 10,000 rank-and-file Drexel employees lost their jobs and livelihoods when the firm collapsed. Joseph's case is one of the most egregious examples of the two-tiered justice system in American financial regulation: the organization is destroyed and ordinary workers suffer, while the executive who presided over the criminal enterprise walks free.
Key Affiliations
Controversies & Concerns
As CEO of Drexel, presided over the most corrupt trading operation in Wall Street history
NEVER criminally charged despite firm pleading guilty to 6 felonies and paying $650M in fines
SEC barred him from being CEO of a securities firm, but he never spent a day in prison
Later returned to Wall Street at Morgan Stanley while 10,000+ Drexel employees lost their livelihoods
Embodies the two-tiered justice system: executives walk free while workers pay the price
Related Investigations (1)
Criminal Charges & Violations
1 documented violations
SEC Administrative ActionFailure to Supervise: Barred from serving as CEO of a securities firm. NEVER criminally charged.(Federal)
Known Associates & Connections
Michael Milken
Head of the high-yield bond department that Joseph, as CEO, was responsible for supervising
Sources & Documentation
2 documented sources from official records, investigations, and reports
Personal Information
- Born
- 1937
- Birthplace
- United States
- Also Known As
- Frederick H. Joseph
Education
- •Harvard Business School (MBA)
Key Timeline
1985
Becomes CEO of Drexel Burnham Lambert
1988-12-21
Drexel pleads guilty to 6 felonies and pays $650M; Joseph was CEO throughout the criminal conduct
1990-02-13
Drexel files for bankruptcy under Joseph's leadership; 10,000+ employees lose jobs
1993
SEC bars Joseph from serving as CEO of a securities firm; never criminally charged
1990s
Returns to Wall Street at Morgan Stanley in compliance and advisory role
May 21, 2009
Dies at age 72