Former Kidder Peabody chief 'lacked a licence': New York Stock Exchange looking into possible penalties

EVERYTHING has gone wrong for Kidder Peabody this year: its accounting system failed to detect dollars 350m of phantom trading profits; the market for its main business, mortgage-backed securities, has collapsed; and the New York business press has started comparing it to Drexel Burnham Lambert before its fall.

It was almost as though no one was at the steering wheel at Kidder, owned by America's General Electric and run, until his resignation in June, by British-born Michael Carpenter. It now emerges that Mr Carpenter was driving without a licence.

Fortune magazine reports in its forthcoming issue that Mr Carpenter did not take the industry exam for brokerage managers until last year.

Kidder says he was not obliged to hold a brokerage principal's licence issued by the National Association of Securities Dealers, because he held no position at the brokerage subsidiary, Kidder Peabody and Company. He was chief executive of the firm's holding company, Kidder Peabody Group. The firm itself was run by a 'partnership of senior executives', all licenced, a spokesman said.

Mr Carpenter took and passed the exam at his lawyer's suggestion in March 1993. But the NYSE believes he should have registered with the NASD, and is looking into possible penalties.

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