As if investigations by congressional committees, banking regulators, and government agencies weren't enough, the derivatives market now has a new investigation to contend with: that of former New York City police detective turned consultant Richard Dietl.

Mr. Dietl, a principal of New York-based Beau Dietl & Ciravolo Associates, has turned his considerable investigative skills to the derivatives market. His goal is to alert the public to the perceived dangers of the financial instruments and to head off what he see as the possibility of another savings-and-loan-type debacle.

The former gumshoe said that when he found out about the problems Orange County, Calif., had with its derivatives investments, he set his team of investigators loose on the market in an effort to compile a comprehensive list of banks, municipalities, corporations, pension funds, and individuals that have suffered losses.

The result is a 35-page report listing more than 30 banks around the globe that have been affected by losses, dating back to 1989. Included in the report are an accounting of the losses, the specific derivatives involved and, in most cases, the bank or brokerage firm responsible for the sale of the instruments.

Also included in the report are losses incurred by pension funds, municipalities, individuals, insurance companies, investment bankers, and corporations around the world that have to date announced problems in the derivatives market.

"The derivatives problem is a lot bigger than most people realize," Mr. Dietl said. "When the Orange County news broke, I realized this is a bigger problem than most people think, because it involves pension funds."

The report devotes two pages to the problems of Orange County, detailing the municipality's investments and the bankers that sold the instruments. It also includes a list of some of the school districts, cities, water districts, and pension funds and the amount of money each lost.

For example, it states that the Orange County Employee Retirement System lost $133,400 because of derivatives. The Irvine Unified School District lost $107,800, the report noted.

Mr. Dietl noted that to this point, aggregate derivatives losses are "well in excess of $100 billion." And he fears that this is just the tip of the iceberg.

"When the 10-Ks come out in the next couple of weeks," said Mr. Dietl, referring to the annual regulatory filings banks are required to release, "there will be more bad news. This could be the next S&L crisis."

The report, however, draws no conclusions, makes no recommendations, and offers no solutions. It is simply 35 pages of names, dates, and dollar amounts of losses.

For example, the report notes that in 1994, ABN Amro Bank suffered a derivatives-related loss. The report states,"this large Dutch banking concern lost $70 million in complex derivatives maneuvers." Nothing more.

Also noted in the report is Caliber Bank, a unit of Independent Bancorp, which in August 1994 reported losses. The report states, "Caliber was sold to Norwest Corp. after it suffered tens of millions in losses on collateralized mortgage obligations. Without the sale, Independent's stock would have plummeted in value."

According to Mr. Dietl, the losses that many pension funds have attributed to the use of derivatives are particularly troublesome.

For instance, in 1992, the Public Service Co. of New Hampshire's pension fund incurred losses. "This pension plan lost $25 million on derivative investments and placed the blame on a plan official, an affiliate of Prudential Insurance Co. of America and State Street Bank," the report said.

"You have old people on pensions whose money is at risk," said Mr. Dietl. "I think the companies should have made it clear to them that there were risks involved."

Mr. Dietl also said he sent a copy of the report to Sen. Alfonse M. D'Amato, R-N.Y., chairman of the Senate Banking Committee, hoping to add more information to the derivatives debate.

It is not known if the senator has seen Mr. Dietl's report.

The former detective said that he'll keep his eye on the market, especially now that fourth quarter and calendar 1994 earnings are about to be released.

"My investigation probably shows half of what the problem really is," said Mr. Dietl. "It's a lot bigger than you think."

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