CHICAGO -- Rodman & Renshaw Inc. officials have scheduled a meeting with Illinois officials for Thursday to discuss the firm's expulsion from an upcoming state bond issue because of sexual harassment complaints.

Greg Quinlivan, general counsel and executive vice president, said yesterday that the firm will argue that the state's use of pending sexual harassment complaints as criteria for eliminating firms from the underwriting syndicate should be applied equally.

"Not only do the majority of the other firms left in the deal have sexual harassment claims against them, the state of Illinois also has claims pending against its offices," he said.

He declined to name which of the eight firms originally named to the deal have sexual harassment complaints pending against them.

Rodman was dropped as a co-manager from the state's $150 million college saver issue on Aug. 31, shortly after state officials learned of three sexual harassment complaints against the firm by three former female employees. Rodman officials denied the charges and said they are fighting the complaints.

Quinlivan pointed out that the only reason the complaints became known to state officials was because they were publicized in the local press. Just like other firms, Rodman has "strict" policies against sexual harassment and holds employee seminars on the topic, he said.

Quinlivan said Rodman officials will meet with James Montana, Gov. Jim Edgar's chief legal counsel and the governor's point-person for selecting bond firms.

Meanwhile, Rodman's largest individual stockholder has taken the firm to task for being dropped from the Illinois bond issue that is scheduled to be priced next month.

Marshall Geller, a California investor who owns 9.99% of the publicly traded firm's stock, said in a letter to Rodman's board of directors last week that "the company's most recent misfortunes -- the highly publicized allegations of sexual harassment at the firm, with the resulting loss of underwriting work from the State of Illinois -- only serve to reaffirm my view that Rodman & Renshaw Capital Group is a. badly run operation that is much in need of aggressive new outside management."

Quinlivan said that the firm has no time to respond to Geller's "soapbox."

Montana also mentioned recent "turmoil" surrounding a possible takeover of Rodman as a reason for dropping the firm from the underwriting team. On Sept. 2, the state named LaSalle National Capital Markets to replace Rodman.

Last month, Rodman announced it had started a due diligence process to examine possible mergers or acquisitions of the firm. The deadline for receiving written proposals for a merger or acquisition is 5 p.m. tomorrow, central time, according to Quinlivan.

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