NEW YORK — NEW YORK -- George L. Ball, the former head of Prudential-Bache Securities, has been forced out of his top post at Smith Barney Shearson and is being investigated by federal regulators for his role in the unfolding scandal at his former firm, Wall Street executives and people involved in the case said yesterday.
Mr. Ball, chairman and chief executive of Prudential-Bache from 1982 until 1991, was asked to leave his job as a senior executive vice president at Smith Barney over concern that the Prudential scandal would eventually stain the reputation of his new employer, executives at the firm said.
The move capped months of intrigue at Smith Barney, where some senior executives, including Joseph Plumeri, head of retail sales, were said to have fought to have Mr. Ball removed. People close to Mr. Ball say he was shocked by the depth of the opposition to him and feared for his future at the firm almost immediately after he was hired to develop marketing strategies for well-to-do clients.
Apparently aware that his time at the firm was limited, Mr. Ball had already arranged for another job by yesterday, Smith Barney said. The nature of that job could not be learned. Mr. Ball did not return repeated telephone calls.
Asked about Mr. Ball's status at the firm, Robert Conner, a spokesman for Smith Barney, said: "Several months ago, Ball informed us of his intention to leave Smith Barney Shearson to undertake a new business opportunity. Since joining us in October 1992, Ball has worked on a number of projects. Those projects have been completed successfully, and accordingly, Ball now feels free to leave the firm for his new post."
It is a testimony to his unusual survival skills that the Prudential scandal is the second for Mr. Ball.
When Hutton pleaded guilty in 1985 to 2,000 counts of illegally overdrawing bank accounts to inflate the profits of its retail division, many executives were quick to point out that the actions took place while Mr. Ball was overseeing the retail arm. Mr. Ball denied knowledge of the scheme, but in 1988 he 'D consented, without admitting or denying guilt, to a censure by the New York Stock Exchange for violating exchange rules and securities laws as a result of the overdrafting.
Last week's huge settlement of fraud charges by the firm now known as Prudential Securities are likely to be harder to brush aside.
In that settlement, affecting about 400,000 retail customers, Prudential agreed to pay at least $371 million in fines and restitution to settle charges of widespread fraud.