NEW YORK (AP) _ General Electric Co. pressured the head of its troubled Kidder, Peabody & Co. brokerage to quit Wednesday and immediately replaced him with GE's top financial officer.

The revamping of senior ranks at Kidder, once one of Wall Street's most prestigious investment firms, marks the latest twist in an unfolding scandal at Kidder that surfaced in April when its head government bond trader was fired for allegedly concocting bogus trades.

Dennis D. Dammerman, who will retain his title as General Electric's CFO, replaces Michael A. Carpenter, who joined Kidder five years ago. GE chairman Jack Welch asked Carpenter to resign in a discussion with him Wednesday, a GE spokesman said.

GE also named Denis J. Nayden, executive vice president at GE Capital Services, as Kidder's president and chief operating officer. Nayden will become Kidder's chairman and CEO after a unspecified transition period, said GE spokesman Bruce Bunch.

Welch said in a statement the appointments were made to ''lay to rest any perceived issues about Kidder's financial strength or our corporate support for the firm.''

GE recently invested $200 million into the troubled brokerage to cover massive losses it says resulted from a trading scheme by Joseph Jett, Kidder's top government bond trader who was fired April 17.

GE also said it expects to report second-quarter earnings of $1.5 billion next month. That figure reflects an after-tax loss attributable to Kidder and that ranges from $25 million to $30 million, GE said.

The alleged scheme at Kidder resulted in a one-time charge of $210 million against GE's first-quarter earnings.

GE reiterated in its statement Wednesday it believes Kidder's financial woes are solely the result of the alleged fraud by Jett. Kidder fired Jett, once a star trader, for allegedly inflating Kidder profits by $350 million in a scheme the brokerage says was intended parly to boost Jett's own bonus. Jett has denied any wrongdoing and has vowed to exonerate himself.

GE stock was up 12 1/2 cents at $46.25 after the announcement.

''We believe the only problem at Kidder, Peabody are issues related to Joseph Jett's government strips trading scheme'' which is currently the subject of an internal GE probe led by former Securities and Exchange Commission enforcement chief Gary Lynch, Welch said.

Bunch said that Kidder had fully accounted for losses related to Jett's activities in its first quarter earnings report. He declined to be specific about the cause of Kidder's second quarter loss other than to say ''it's the normal ebb and flow of business.''

But Kidder has suffered from worsening financial problems tied to its $12 billion portfolo of mortgage-backed bonds, which has plummeted in value as a result of the spike in interest rates this year.

The GE statement described Dammerman's role at Kidder as temporary ''to assure all the firm's constituencies of GE's and Kidder, Peabody's long-term commitment to the industry.''

GE said Dammerman would return to his full-time job as CFO after a ''successful transition.'' Temporarily filling his duties at GE is Robert Nelson, GE's vice president of finnancial planning and analysis.

Carpenter, who joined Kidder five years ago, said he was voluntarily stepping aside ''to allow a new team to concentrate on running the strong set of businesses we have established.'' His post-Kidder plans weren't clear.

GE said Dammerman and Nayden will work with government agencies also investigating Jett's alleged fraud and determine whether any further changes at Kidder are necessary.

Jett and other Kidder employees are being investigated by the U.S. Attorney's Office in Manhattan and the SEC.

Jett also faces an arbitration claim by Kidder before the National Association of Securities Dealers. Kidder is seeking Jett's $8 million bonus, which it froze after dismissing him, as well as other compensation.

A Jett spokesman and attorney did not immediately return telephone calls seeking comment.

GE bought Kidder in 1986 and has had to deal with the brokerage's problems ever since.

The brokerage's reputation was first tainted when it became embroiled in the Ivan Boesky insider trading scandal. The firm agreed in 1987 to pay a then-record $25.3 million to settle civil charges with the SEC.