The finger-pointing continued this week in a New Jersey state senator's quest to find out why Cypress Securities seems to have profited disproportionately on a 1992 housing agency bond issue.

Sen. Robert E. Littell, R-Sussex, has been trying for the past several weeks to determine why New Jersey-based Cypress, a member of the selling group that did not sell any bonds on the transaction, earned more than $87,000 in profits.

The state treasurer and Lehman Brothers, the senior manager on the deal, have said that the issuer, the New Jersey Housing and Mortgage Finance Agency, decided allocations on the $278 million issue.

But officials at the housing agency said Wednesday that they have reviewed their files and are still not entirely sure who made the call, saying it might have been Lehman Brothers or an employee of the agency who no longer works there.

Littell could not be reached for comment yesterday, but he has said he is frustrated that no one seems to know how or why $2.2 million in fees were split among the 25-member syndicate.

dicate.

Littell said last week he is determined to find out why Cypress, despite selling no bonds, earned more in profits than 16 members of the syndicate who were actually given bonds to sell. The senator has even threatened to obtain subpoena power to compel the various players on the deal to testify under oath about how the bonds were allocated.

In the most recent attempt at providing an answer, the agency's executive director, Christiana Foglio, sent a letter to Littell late Wednesday. But the letter fails to answer any of the key questions the Senator has raised.

Foglio says in the letter that most of the preparations for the deal were handled before she joined the agency. Foglio said it is her understanding that Lehman Brothers and Philip R. Miller, a former deputy executive director, coordinated the selection of the selling group members. But she said she does not know who decided on the allocations.

"I can tell you that neither I nor any present staff of the agency is aware of how these allocation decisions were made," Foglio said. "Unfortunately, after a review of these files, we are still not in a position to give you definitive answers to your questions. While Mr. Miller may have knowledge that would provide for more specific responses, his files do not."

Miller, now an attorney at Arnelle & Hastie in New York City, could not be reached for comment yesterday.

Foglio is on vacation and could not be reached for comment. William Abele, an assistant executive director, prepared Foglio's response but was also not available for comment yesterday.

Cypress officials and Lehman Brothers have previously said that Cypress was compensated more on the deal than other companies because the firm assumed a larger share of the legal liability.

However, assuming a larger portion of the risk was actually a privilege for Cypress because it translated directly into higher profits. No has has explained who decided to give Cypress its allocation in the first place.

The housing agency's letter to Littell revises downward the figure previously given as Cypress' take on the transaction to $87,005 from the $111,218 Lehman Brothers originally said Cypress earned.

The higher figure would represent 5% of the profits on the deal, exactly matching the 5% liability Cypress officials say they assumed. The lower figure amounts to slightly less than 4%, but is still the fourth most generous on the syndicate.

Questions have been raised about Cypress in part because of the implied political connections of some of the firm's executives. Melvin R. Primas, for example, is a managing director at Cypress and was previously the housing agency's chairman. He is also a former mayor of Camden.

But firm officials say Primas is intentionally uninvolved in state-level bond business to avoid the appearance of conflicts of interest. They said Primas also does not share in the profits from such deals.

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