Fred Joseph, 72, executive at brokerage firms

NEW YORK - Fred Joseph, 72, who as chief executive officer of the investment bank Drexel Burnham Lambert Inc. helped create the modern junk-bond market in the 1980s before the firm's collapse, died Friday after a long fight with multiple myeloma.

Mr. Joseph, a graduate of Harvard College and Harvard Business School, arrived on Wall Street in 1963, joining the corporate finance department of E.F. Hutton. He later moved to Shearson Hammill & Co., rising to chief operating officer before leaving to join Drexel in 1974.

He was named chief executive of Drexel in 1985. With fellow executive Michael Milken, the company expanded the market for low-rated bonds, which most investors then considered too much of a risk but which quickly began to dominate the financial world.

The proceeds from the sales of junk bonds helped finance a wave of cutthroat corporate buyouts and made Drexel one of the most revered firms on Wall Street. But it ultimately succumbed to a four-year criminal probe into charges that Milken and others had used inside information to trade shares of companies considered takeover targets.

Milken pleaded guilty in 1989 to securities violations, served 22 months in prison, and was fined $600 million. The scandal drove Drexel to file for Chapter 11 bankruptcy protection in 1990.

Mr. Joseph ultimately accepted blame for failing to supervise Milken. He was banned from any managerial position with a securities firm for some time and agreed to pay a $3 million fine.