Despite SEC Charges, Drexel’s Pam Monzert Seen as Mere ‘Clerk’

The massive insider trading lawsuit brought by the Securities and Exchange Commission last week against Drexel Burnham Lambert Inc. and its “junk bond” chief, Michael Milken, were hardly any surprise to Wall Street. But the inclusion in the suit of Pamela Monzert--listed by the SEC as a Drexel bond trader--caught many watching the unfolding drama off guard.

Who is this mystery woman accused by the SEC of 13 instances of stock manipulation, false record-keeping and margin requirement violations?

Drexel insiders and former employers describe the 46-year-old Santa Monica resident as a “quiet, sweet” order-entry clerk who did whatever she was told--and was paid as much as $70,000 a year to do it.

“She’s a nobody,” says one former high-ranking Milken lieutenant. “She had no authority to give orders. She only did what others told her to do.”

Although the role of a faithful “order taker” might describe any number of professional brokers working under Milken’s demanding eye in his Beverly Hills bond trading room, the former insider said Monzert, who drives a gray Mercedes-Benz sports car, was “truly, truly a clerk” who was at the beck and call of her superiors.

“She was the lowest of the low,” he said, noting that her salary pales in comparison to the six- and seven-figure wages and bonuses earned by many of Milken’s traders. “She doesn’t even know how to trade.”

So the question persists: Just why was Pamela Roberta Monzert named in the 184-page suit at all?

No Explanation

The most popular speculation is that prosecutors hope she will aid their larger case against Drexel and Milken by agreeing to tell all she knows of the inner workings of the junk bond operation’s headquarters on Wilshire Boulevard.

Monzert refused all comment on her case, but her attorney, Andrew M. Lawler of New York, pointedly did not refute the rampant speculation.

“I am not offering an explanation of why she was named,” said Lawler, a former deputy U.S. attorney who has been a private defense attorney specializing in white-collar crime for the past 20 years. “But the speculation does not surprise me.”

Both Lawler and a Drexel spokesman declined to describe Monzert’s duties at the firm, saying only that the SEC had listed her as a bond trader.

Monzert was accused of participating--along with convicted insider trader Ivan F. Boesky, Milken and other Drexel employees--in three of the 18 transactions involving insider trading, stock manipulation and record falsification that the SEC says Drexel engaged in from 1984 to 1986.

Specifically, the SEC alleges that Monzert helped drive up the stock price of Stone Container Corp., a Chicago maker of cardboard boxes, in April, 1986. Monzert’s goal, the suit charges, was to ensure that Drexel would win a $6-million fee for underwriting a new issue of Stone Container securities.

According to the suit, the new Stone Container securities could not be issued unless the company’s stock reached at least $46 a share. In early April, 1986, the shares were trading below $46. However, on April 14 and 15, Drexel employees allegedly arranged for Boesky’s trading organization to purchase more than 37,000 shares of Stone Container.

The Boesky purchases, which allegedly were made on Drexel’s behalf but never listed as such, apparently drove up the price of the shares to $47 by the end of trading April 15, allowing the sale of the new securities to proceed.

The SEC has charged that it was Monzert who called the Boesky group on April 15 and ordered them to purchase the Stone Container shares. According to the suit, she told Boesky’s representative that “she wanted the price of Stone common stock to close at $47 per share” that day.

Looking for Cooperation

Lawler characterizes the SEC allegations against Monzert as the result of “one call or several calls on a single day relating to a single stock,” a far cry from the accusations of repeated stock manipulation and illegal insider trading leveled at the other defendants.

Criminal defense attorneys observing the Drexel case say the government’s decision to include Monzert in the suit probably stems from her refusal so far to cooperate with their investigation. “If she had cooperated, she wouldn’t have been named,” one New York lawyer said. “Obviously, they’re looking for people at Drexel to cooperate.”

A Drexel insider said prosecutors are hoping that the additional pressure of the suit will persuade Monzert to join their side. “But they’re just ruining someone’s life,” he said. “It’s so pitiful. She’s no rocket scientist.”

According to interviews and public records, Monzert has worked for a variety of stock brokerage houses in Southern California since 1972. She has been licensed to handle general securities since 1972 but apparently has used her authority only in clerical jobs, primarily as an order-entry clerk.

Monzert joined Drexel in August, 1982, after working for three years at the Beverly Hills firm now known as H. J. Meyers & Co. Earlier, she worked for First Wilshire Securities in Los Angeles and Letterman Transaction Services Inc. in Orange.

A previous employer described her duties as a wire operator who typed orders into a Teletype machine for execution in New York. “We thought she was a real prize. She was spunky, upbeat and enthusiastic. And she worked very well under pressure.”