Securities: Where Did the $300 Million Go?

Executives of E.S.M. Government Securities of Fort Lauderdale liked to behave as if every year were a winner. They drove Mercedes and Jaguars and paid themselves salaries of up to $500,000. In fact, the nine-year-old company, a dealer in bonds, notes and bills, has been a money loser almost from the start. When it finally collapsed last week in the biggest failure of its kind since Drysdale Government Securities went under in 1982, dozens of cities, financial institutions and other creditors stood to be out as much as $300 million. Among the potential victims were Beaumont, Texas, which could lose $20...