NEW YORK — A top Drexel Burnham Lambert Inc. investment banker who played a significant role in some of the largest corporate takeover fights of the 1980s apparently has gone into hiding after a newspaper account on Monday that claimed he had lied repeatedly to customers and co-workers about his own background.
The Wall Street Journal reported that Jeffrey Beck, 43, nicknamed "Mad Dog," had made up elaborate stories about military service in Vietnam, including tales of heroism, war wounds and decorations. But the newspaper claimed that Beck had never been on active military service. The report also said Beck falsely claimed that he was heir to a fortune in the billions of dollars.
The well-connected investment banker reportedly used the tales of his war heroism as part of his pitch to customers--individuals involved in leveraged buyouts or corporate takeover battles whom he persuaded to turn to Drexel for investment banking services. Beck was regarded as one of the top "rain makers" in investment banking, able to drum up hugely profitable merger and acquisition business for Drexel.
Beck played a key role in two of the largest leveraged buyouts ever, those of Beatrice Cos. and RJR/Nabisco. He enjoyed a close professional relationship with Henry Kravis, a principal of the leveraged buyout firm Kohlberg Kravis Roberts & Co. He also was credited with getting Drexel hired in the takeover fights for Federated Department Stores and Pillsbury.
The disclosures, if true, mark a significant new embarrassment for Drexel, which has been reeling from the criminal prosecution of its former junk bond chief, Michael Milken, the fallout from the firm's own guilty plea to securities fraud charges and from the depressed state of the junk bond market.
A Drexel spokesman, Steven Anreder, refused to discuss the specifics of the Wall Street Journal article. But he said Beck had "preliminarily tendered a resignation a couple of weeks ago." He said Beck didn't give a reason for wanting to resign, and the matter was left unresolved after a couple of initial talks with senior Drexel executives. Anreder said Drexel since then has been unable to find or talk with Beck.
"We have been unable to be in contact with him since then," Anreder said. He refused to say if Drexel is now inclined to accept the resignation.
Beck couldn't be found by The Times for comment. A secretary in his office said she had heard from him by telephone shortly before a reporter called. But she said she did not know where he was and confirmed that Drexel officials had been unable to get in touch with him.