WASHINGTON -- The chairman of the House subcommittee studying reforms of the government securities market yesterday said he will press forward with legislation this year despite appeals by federal regulators for more time to study the implications of the recent Salomon Brothers Inc. bidding scandal.

"This area cannot wait that long," Rep. Edward Markey, D-Mass., chairman of the House Energy and Commerce Committee's subcommittee on telecommunications and finance, told a packed crowd at Congress's first hearing on reauthorization of the Government Securities Act of 1986 since Salomon Brothers officials revealed last month several instances of illegal bidding in Treasury auctions.

"We believe that we've been sufficiently attentive to the issue that we can move forward," said Rep. Markey, who spelled out six changes his panel's contemplating to the 1986 law, which expires in October.

Four top regulators appearing at the hearing called for an additional 90 days to study the Salomon situation before Congress moves on significant legislative reforms -- a period of time that probably would not expire before Congress adjourns for the year. Appealing for a delay were David Mullins Jr., vice chairman of the Federal Reserve Board; Richard Breeden, chairman of the Securities and Exchange Commission; E. Gerald Corrigan, president of the Federal Reserve Bank of New York; and Jerome Powell, assistant secretary for domestic finance at Treasury.

An aide to the Senate Banking Committee's subcommittee on securities, which scheduled a hearing on the government securities law for Sept. 11, had no comment on the qudstion of a delay.

Meanwhile, the star witness at yesterday's hearing -- Salomon Brothers' new chairman, Warren Buffett -- told Rep. Markey he had no objections to several moves contemplated by the committee to tighten regulation of the government securities market in the wake of the bidding scandal that now plagues his firm. "I have no problems with tough rules, tough cops, and tough prosecution," Mr. Buffett said.

Rep. Makey said firms participating in the government securities market should be required to abide by standard internal procedures that act as a front line defense against illegalities.

Consideration should be given to some form of large trader reporting from customers in the market to gauge better where major positions are occurring, he said.

The Sec's general antifraud authority should be augmented to make it crystal clear that any fraudulent or manipulative activity in the auction process violates the federal securities laws, Rep. Markey also suggested.

Mr. Buffett said he also would not object to another of Rep. Markey's proposals -- to give the SEC authority to oversee the manner in which price and trading information gets to the public -- although he said he has seen no major problems in that area. "I'm not aware of big gaps," he said.

Rep. Markey also said the SEC should be given authority to write sales practice rules for the market and that consideration should be given to formalizing cooperation among the SEC, the Treasury, and the Fed over the marketplace.

But Mr. Buffett said yesterday that regulators may already have some simple but effective remedies within their graps to discourage socalled "note squeezes," and other illegal bidding in the market. He said any time regulators detect illegal bidding in any particular offering they should simply reopen the issue, in effect flooding the market. Such a move presumably would lower prices of bonds already on the market.

"I think if I were in the position of influencing policy, any time an issue appeared to be behaving abnormally, I would put the world on notice that Treasury will be coming back with $10 billion more of those notes," he said. "It wouldn't happen again."

Mr. Corrigan, in later testimony before the subcommittee, endorsed Mr. Buffett's suggestion. Mr. Corrigan also said he favors enhanced disclosure of quotes offered by primary dealers in govenment bond auctions, but said the general system of having primary dealers is "not at risk."

Mr. Buffett detailed a series of violations of Treasury auction procedures by firm officials, describing them as "inexplicable and inexcusable." He suggested much of the blame falls on the shoulders of the firm's chief government bond trader, Paul Mozer, particularly since Mr. Mozer continued to orchestrate illegal trades after federal enforcement officials were notified of Salomon violations.

"It was not the act of a rational man at all," Mr. Buffett said. "It's almost like a self-destructive mechanism."

In a statement accompanying Mr. Buffett's testimony, Salomon disclosed the names of several customers for whom it submitted unauthorized bids, including the Quantum Fund, Mercury Asset Management Co., Steinhardt Partners, Tudor Jones, and Tiger Securities.

He also walked panel members through a "practical joke" orchestrated by Mr. Mozer that backfired and resulted in the firm purchasing nearly $1 billion in Treasury notes.

Federal regulators testifying before the subcommittee acknowledged that the bidding violations by Salomon Brothers could prompt the need for tougher rules. Mr. Breeden said the review of the government securities market undertaken by the SEC, the Treasury, and the Fed should be completed over the next 90 days.

Mr. Breeden also acknowledged that the Salomon Brothers scandal had raised "serious questions" about the firm's conduct in the bond market. But he also praised the company for the measures it has taken so far, which include a reorganization of senior management as well as the ongoing cooperation with federal regulators.

David Mullins, the Federal Reserve Board's vice chairman, said while the Salomon episode was troubling, "it is not apparent that sweeping changes in regulation are warranted."

Mr. Mullins said government authorities have already tightened existing surveilland and enforcement procedures. Moreover, he said the bond market has continued to function efficiently in the wake of the probe into the scandal.

"The smooth functioning of this market in recent months demonstrates that there appears to have been no economically meaningful loss of confidence in this market as yet," Mr. Mullins said.

Still, he added, "it may well be that upon review, additional rules or reporting requirements or significant changes in the auction process" may be needed.

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