Former Drexel CEO Fred Joseph Dies At 72

ANDREW VANACORE

NEW YORK (AP) — Fred Joseph, who as CEO of investment bank Drexel Burnham Lambert helped create the modern junk-bond market in the 1980s before the firm's collapse, has died. He was 72.

Joseph died Friday at New York Presbyterian Weill Cornell Medical Center after a long fight with multiple myeloma. His death was announced by John F. Sorte, CEO of Morgan Joseph & Co. Inc., an investment bank Joseph helped found.

Joseph, a graduate of Harvard College and Harvard Business School, arrived on Wall Street in 1963, joining the corporate finance department of 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 when Shearson was bought out by Hayden Stone.

He was named CEO of Drexel 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.