Gutfreund investigated by government officials


WASHINGTON -- Federal officials are investigating whether John H. Gutfreund, the former chairman of Salomon Brothers Inc., violated a federal criminal law by misleading a senior Treasury official in June about the firm's improper bidding practices for Treasury securities, government officials said yesterday.

Mr. Gutfreund met June 10 in Washington with Treasury Under Secretary Robert R. Glauber, the third-ranking official at the department, to discuss a May 22 auction of two-year Treasury notes. The firm has acknowledged that its bond traders sought to corner that market.

According to accounts of the half-hour meeting by some government officials, Mr. Gutfreund requested the meeting and assured Mr. Glauber and other officials present that there was nothing improper about the May bid, but that it was routine. Mr. Gutfreund also apparently did not disclose that he had known since April that Salomon Brothers had violated bidding rules in a February auction.

"We're examining the meeting very closely to see whether he misled Treasury," said an official yesterday who insisted on not being identified.

Copyright © 2019, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad