AMERICAN EXPRESS <AXP> AND UNIT GET SUBPOENAS
American Express Co said it was
subpoenaed by the Securities and Exchange Commission in
connection with documents on transactions in securities of
American Express and its former unit, Fireman's Fund.
    American Express said its brokerage unit, Shearson Lehman
Brothers Inc was also served with a subpoena. Shearson acted as
co-manager in the underwriting of units of Fireman's common
stock and warrants last May, was also served with a subpoena,
it said.
    American Express said the subpoena to Shearson relates to
transactions with Jefferies and Co and others.
    American Express said it and Shearson intend to comply with
all requests from the SEC and to cooperate fully. American
Express said neither company is aware of any unlawful conduct
with respect to the matters and a thorough investigation is
continuing.
    American Express said the subpoenas were received
yesterday, and that it and Shearson were unaware of any inquiry
prior to receiving the subpoenas.
    Yesterday, Boyd Jefferies, founder of Jefferies Group, said
he agreed to plead guilty to two felony counts of securities
violations.
    Jefferies also settled charges with the Securities and
Exchange Commission of market manipulation and another scheme
with Ivan Boesky, who has settled SEC charges of insider
trading.
    Jefferies' firm was censured by the SEC and ordered to
retain an outside consultant to review its procedures.
    In documents filed on Jefferies yesterday, the SEC did not
identify who was involved in the market manipulation scheme
aside from Jefferies. It said "a certain issuer," which held
controlling interest in a second public company, offered
several mln shares of the company's common stock to the public
in a secondary offering during 1986.
    The SEC alleged that Boyd Jefferies carried out a scheme
with an unidentified person to drive up the price of the second
company's stock prior to the offering by having the Jefferies
firm trade in the stock.
    Jefferies and co was allegedly compensated for the loss
from those trading activities after sending a fake invoice to
another unnamed person, the government charged.
    American Express first offered Fireman's Fund Corp's stock
to the public in 1985. It lowered its holding from 100 pct to
41 pct. In May, 1986, it reduced its ownership interest to 27
pct by completing a public offering of nine mln units.
    Each unit consisted of one share of common and one warrant
to buy Fireman's fund. The warrants are exercisable from the
issue date through March, 1989.
    At the same time, American Express sold warrants directly
to Fireman's Fund to purchase five mln shares. Those warrants
are exercisable between November, 1988 and March 1991.
    American Express said if all warrants were exercised it
would own about 13 pct of Fireman's fund.
    American Express stock fell 1-1/2, to 77-1/4 on volume of
1.9 mln shares. The stock had been strong in the last two days,
first on rumors, then an announcement of an understanding
American Express reached to sell Nippon Life Insurance Co 13
pct of Shearson.
    Wall Street has also been anticipating American Express
will sell a stake in the brokerage unit to the public as well.
    E.F. Hutton analyst Michael Lewis said he does not believe
the subpoenas will affect Nippon's deal with American Express,
but it could result in a delay of the public offering
anticipated for Shearson.

    "If they're forced to keep a bigger percentage of Shearson
a little longer...big deal. They're certainly not going to
throw Shearson away. Shearson is still an attractive asset," he
said.
    American Express has not commented on speculation it would
offer part of Shearson to the public, but it has said it was
continuing to review options for the brokerage.
    Analysts had speculated an offering of a part of Shearson
would be forthcoming shortly.
    "It puts a cloud over it for a while...The market is
anxious to see them consumate whatever they were going to
consumate," Lewis said.
 Reuter
