"That helped unravel the structure of the firm," a Salomon official said yesterday, speaking on condition that he not be identified.

Salomon officials would not comment publicly on the upcoming Fed report.

The result, said a high Salomon official, was "a series of boutiques under one roof, as opposed to one firm."

Salomon officials say they had been scheduled as lead manager of one bank offering that will be announced soon, but were demoted to co-manager.

But Salomon officials contend that will not be necessary.

That failure to report the violation has left Salomon officials and supporters of the firm stunned.

A Salomon official said he did not know of the call.

The clerk was supposed to double-check his work, and another clerk who worked with him should have reviewed it, Salomon officials said.

Salomon officials could not be reached for comment.

That same evening, calls were placed to top Salomon officials alerting them to a special meeting the following day.