Daily News from New York, New York on August 22, 1991 · 141
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Daily News from New York, New York · 141

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New York, New York
Issue Date:
Thursday, August 22, 1991
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141
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Thursday, August 22, 1991 DAILY BUSINESS NEWS 49 THE ocmitp WtfSS The flight of customers from Salomon Bros, intensified yesterday as the World Bank and more state agencies withdrew business in reaction to the brokerage's bond-trading scandal. The World Bank, which deals with Salomon world wide in a variety of currencies, said it would suspend business with the Wall Street giant at least through September. Also yesterday, Salomon lost more business from two state pension funds in Massachusetts, and California Treasurer Kathleen Brown suspended some transactions from her state's $19 billion Pooled Money Investment Account The World Bank's action was designed to send a signal to Salomon and all other bond dealers that the markets would have to stay clean, said the bank's vice president and treasurer, Donald Roth. Roth couldn't measure the full extent of Salomon's dealings with the bank but said the brokerage had helped manage two of its global bond issues in the past several vears, worth a total of $3.5 billion. In response to the bank's announcement, Salomon said it "would like to apolo gize to the World Bank and its member governments for any embarrassment caused by our actions." ' The brokerage said it would "continue to ensure that all necessary correc tive measures are imple mented promptly." Salomon's three highest officials quit Sunday after revealing they knew about wrongdoingin Treasury bond auctions but waited months to tell regulators. Macy's gets clearance By JOYCE YOUNG Daily News Business Writer R.H. Macy & Co. Inc. said yesterday it is reorganizing its operations into East and West Coast divisions and has a. new project in the works called Macy's Close-Out for clearance stores throughout the U.S. Macy's initially will open five stores in outlet malls or as free-standing shops, spokesman Michael Freitag said. The stores will offer reduced-price merchandise. "It has not been determined where the five stores will be located or when they will be opened," he added. Plans close-out stores, East-West realignment "New York will seriously be considered." Starting Feb. 1, Macy's East, with headquarters in New York, will have 68 stores, including those in the Northeast, Georgia, Florida, Louisiana, Alabama and South Carolina. Macy's West, based in San Francisco, will have 52 stores in northern California, Nevada and Texas, as well as all of the Bullock's stores. Macy Chairman Edward Finkelstein said: "By creating two large department store divisions, we will enjoy economies of scale from centralization." Finkelstein also said the company plans "to continue to add stores aggressively over the next two years." The reorganization will allow "more local autonomy in buying," and will not mean "appreciable changes in lev els of employment," Freitag said. Macy's employs 75,000 nationwide. Retail analyst Kurt Barnard called the move a "sound, sensible step in the right direction." "Until now, it was difficult for people in Atlanta, who have a more laid-back, conservative public, to buy for the radically different customer in southern California." The privately held company said same-store sales (stores open at least a year) rose to $1.63 billion for its fourth quarter ending Aug. 3. It was a slight increase over last year and a big jump over the previous three quarters. SEC out to break a Fla. brokerage y ROSEMARY METZLER LAVAN Daily News Business Writer The Securities and Exchange Commission sought an injunction yesterday to stop an unlicensed Florida brokerage house doing business in New York, New Jersey and at least 17 other states from selling highly speculative securities to unsuspecting investors. The complaint, filed in Miami Federal Court, accuses the president and five employes of Fort Lauderdale-based First Fidelity Financial Corp., a boiler- room telephone sales operation, of using high-pressure tactics and making false claims about Advisors Capital Technology Corp. and Tradux Corp. to induce at least 200 investors to buy more than 1 million shares of stock in the two firms earlier this year. The SEC said the president, Marc Joseph, and employes of First Fidelity Financial failed to disclose that the then-president of Advisors had been convicted of tax fraud in 1985 and grand larceny in 1987. Employes also represented the firm as being active when in fact it had no employes, no cash and was not in operation, the SEC said. As for Tradux, the SEC said First Fidelity Financial employes told investors that its stock, selling at 75 cents a share, would double, even quadruple, in value when in fact they knew Tradux was suffering continual losses and there was no reasonable basis for such predictions. "This litigation will place dishonest brokers on notice that the SEC will take swift and decisive action against them," said Martin Kuperberg, the agency's associate regional administrator. Design center set for B. Altaian site The B. Altman building at 34th St and Fifth Ave., shuttered since the department store for which it is named went out of business in December 1989, is scheduled to become a 600,000-square-foot design trade center by mid-1993. The New York Resource Center will house contract and residential showrooms displaying furniture, fabric, floor and wall coverings, lighting and accessories. The property is being developed by KMO-361 Realty Associates. The center will include a theater, a conference facility and meeting rooms, all for use by tenants and professional groups. WALL STREET FROM PAGE 47 On the floor of the New York Stock Exchange, there were scattered whistles. But the mood was controlled. "There's no cause for celebration,' said one Dean Witter floor broker, who added: "We've had five bad years now. and one good day doesn't make up for that. Monday we had an overreaction, Tuesday was a non-event and today we came back to reality." The opening was strong. By lunch, traders were taking a wait-and-see attitude, observed a NYSE cook on a break outside the building. The most excitement came with news of the first telephone communication between Soviet President Mikhail Gorbachev and President Bush since the coup. "The floor got real loud," said a phone clerk for Pershing & Co. "People were saying, 'Look at the tape, look at the tape.' And there was another rally." But by the time of the benchmark 3,000, "we were tired," said Terence Fitzgerald, a phone caller with Levine Securities. Fitzgerald, who takes calls from trading desks and executes orders, added: "There wasn't much reaction." Said a clerk who was on the floor "It wasn't nearly as wild as Monday. There we had panic selling." As the day ended, there was cau tion, too. "The next week or so the market will continue to be affected by the So viet situation," said a brokerage floor employe. "We just have to wait and see."' it wasn't nearly as wild as Monday. There we had panic selling - A clerk oa New York Stock Exchange floor WARS B-1 EXPIRES SEPTEMBER 14 1991 ii. - urn ta.v ;6iiiS CARPET CLEANING $16 A ROOM 2 ROOMS $32.00 6 ROOMS, REG. $191.99, NOW $96! UPHOLSTERY CLEANING $25 OFF A SOFA UP TO 7 FT OR 2 CHAIRS $3999 G1wtponoltietKlialrttmMoljMiiin triabilrmmrtH2Wtimtlrqwmimn(!m'm li anMiWliini winmdBiir2rooimi)'(iiir 2o hnluiiutmso'iiyZtlnin'iSMWClMwupnai .wylorMtiilTlibno olltwfctoili Hoiiai t uio' Gw miilwiiiil m tin vi Cnli tm ' m Wt il m if miOtmti WlttDwiwolinr rawm mr Coupe "f nM ' Mm"oi Co V KolwW" n J5W mtmtfmfk wya 'ftm- w! ifcooVw ! whVt w Mti m WiCksTe "d (Hot5" Co fkm NcW CALL DEPT 1024 MON. - SAT, 8.30 AAA TO 5 00 PM Stoten Isbnd & Rockland County 1-800-631-5466 Long Island (516) 226-1100 fcrooictynQueens, Bronoodf Manhattan (7)8) 895-1810 f. t-8.fl N;Jrswy (908)753-5700 Qr (609) 655-3100 i ,'.0,t, w Mev. York norh ot FotteM County. C (Via i S-YUY V . Mm SATISFACTION GUARANTIED OR YOUR MONEY BACK ftv 'iv. e 'r S ! - -43 0? 4 s

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