Joseph Jett sparks a media frenzy; lone trader vs. Kidder over blame for lost $350 million.

If there were an award for unbiased reporting in the print media, it would have to go to the tabloid New York Post for its item on the rift between Kidder, Peabody & Co. and Joseph Jett.

Since April, Jett, the 36-year-old former head of Kidder's government trading desk has been fighting an uphill battle against a tag team of securities industry regulators and withering front-page character analysis by the mainstream press.

After posting $200 million in profits for the firm last year, with a $9 million bonus for himself, Jett is now unemployed and accused of manipulating his investment banking firm's computer system to book $350 million in phantom profits.

In front-page interviews, Kidder executives and former colleagues have maligned their 1993 employee of the year, portraying him as a loser and a loner. The latter adjective is ironic because The New York Times, The Wall Street journal and New York Magazine have all cast Jett as the mastermind behind a multimillion dollar trading scam and the sole reason for Kidder's currently deflated bottom line.

According to published reports, six other Kidder staffers were suspended along with Jett, but they remain unidentified. Edward Cerullo, Jett's immediate supervisor, has denied any knowledge of Jett's (his trusted aide) activity and remains at Kidder conducting business as usual, even though in 1991 he was censured and fined by the National Association of Securities Dealers for improper supervision of a trader.

Jett's work for Kidder produced a $20 million bonus for Cerullo. Jett has publicly declared his innocence, maintaining that he is being made into a scapegoat, all because he is black.

Conspicuously, the news hounds stepped lightly on Jett's work environment, yet went to great lengths to define the character of the man behind the socalled scam.

New York Magazine described the Harvard Business School graduate and MIT trained engineer as "...a troubled, angry man driven by unnaturally high expectations."

Jett, according to a fascinated press, is a bug-eyed, elastic-face, childhood nerd turned trading room bully, a confused loner who had so distanced himself from his race that he identified with Hitler's Mein Kampf instead of Ralph Ellison's Invisible, Man. It is an image of a black man blundering into a position above his ability, covering his shortcomings with bluster and crying racism when found out.

John Crudele of the Post gave credence to the scapegoat theory. He highlighted a WSJ piece that focused on Kidder's being the most heavily leveraged house on the Street. About $23 billion of Kidder's total year-end assets of $73 billion represent securities held by the firm's own account. It was out of Kidder's house account that Jett traded government securities. Kidder has a whopping $94 in bonds, stocks, and other assets for every $1 in equity, according to year-end reports.

Industry insiders familiar with both the Jett case and Kidder's illiquid fiscal position have begun to theorize that Jett has indeed been set up as the distraction for Kidder's losses, as well as its systemic lack of supervisory controls.