The Wall Street Journal (Updated May 2, 2002 11:01 pm) -- In August 2000, Virginia Hay filed an arbitration complaint against Salomon Smith Barney and its broker Lawrence Gordon. Her since-deceased father lost hundreds of thousands of dollars after making unsuitably risky investments -- primarily in junk-bond mutual funds -- recommended by the broker, Ms. Hay, a resident of Lexington, Ky., alleged in the complaint.

Salomon paid a $175,000 financial settlement and Ms. Hay withdrew her complaint, according to documents filed with the National Association of Securities Dealers. But...