Salomon executive resigns Scandal drives out chief legal counsel

August 24, 1991|By New York Times News Service

NEW YORK -- The Salomon Bros. scandal has ended another executive's career with the firm.

Donald M. Feuerstein, the firm's chief legal counsel, resigned yesterday under pressure from Warren E. Buffett, the new chairman and chief executive.

Mr. Feuerstein, a longtime Salomon executive, was one of the four senior Salomon managers who were told in April that at least one government bond trader had engaged in illegal bidding in the Treasury securities market.

The other executives who attended a meeting in late April to discuss the illegal bidding have already resigned. They are John H. Gutfreund, the firm's chairman and chief executive; Thomas W. Strauss, its president; and John Meriwether, a vice chairman.

People inside and outside the firm have been questioning since Sunday why Mr. Feuerstein was allowed to remain when the other three had to resign.

But his defenders have countered that Mr. Feuerstein told senior management repeatedly that the government had to be informed of the transgression, although no action was taken. Despite his apparent persistence, Mr. Feuerstein has still been criticized for failing to take the matter into his own hands.

Mr. Feuerstein did not return a telephone call last night seeking comment. But in a statement, he said, "I fully understand Mr. Buffett's request for my resignation and appreciate that the new management team at Salomon Inc. should have in my position an individual of their own choosing."

Salomon disclosed earlier this month that it had submitted bids at several Treasury auctions in the names of customers without their authorization.

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