The Devil's Casino: Friendship, Betrayal, and the High Stakes Games Played Inside Lehman Brothers
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They were the Rat Pack of Wall Street. Four close friends: one a decorated war hero, one an emotional hippie, and two regular guys with big hearts, big dreams, and noble aims. They were going to get rich on Wall Street. They were going to prove that men like them ? with zero financial training - could more than equal the Ivy-League-educated white shoe bankers who were the competition. They were going to create an institution for men like them -- men who were hungry and untrained ? and they were going to win, but not at the cost of their souls.
In short, they were going to be the good guys of finance.
Under their watch, Lehman Brothers started to grow and became independent again in 1994. But something had gone wrong on the journey. The men slowly, perhaps inevitably, changed. As Lehman Brothers grew, so too did the cracks in and among the men who had rebuilt it.
Ward takes you inside Lehman's highly charged offices. You'll meet beloved leaders who were erased from the corporate history books, but who could have taken the firm in a very different direction had they not fallen victim to infighting and their own weaknesses. You will encounter an unlikely and almost unknown Marcus Brutus, who may have had more to do with Lehman?s failings than anyone?including Dick Fuld, who has widely been considered the poster-child for the mistakes and greed of all bankers.
What Ward uncovers is that Lehman may have lost at the risky games of collateralized debt obligations, swaps, and leverage but that was just the end of a bigger story. "Little Lehman" was the Wall Street shop known to be forever fighting for its life and somehow succeeding. On Wall Street it was cheekily known as "the cat with nine lives." But this cat pushed its luck too far -- and died, the victim of men and women blinded by arrogance. Come inside The Devil's Casino and see how good men lose their way, and see how a firm that rose with the glory and bravado of Icarus fell burning in flames not so much from a sun, but from a match lit from within.
and I feel Chris resented Dick." "Chris knew that Dick might want to fire him and have all the glory for himself," said Perry Moncreiffe. "He said to him, 'That's fine, but you 'll have to pay me out.'" Pettit drew up an agreement that stipulated that if Fuld fired him, Pettit would be paid $10 million. Moncreiffe says Fuld signed without thinking twice about it. One of the reasons Fuld was aloof to the foot soldiers was his devotion to family, a quality he tried to instill
wanted, it was more difficult for Chris or any individual to exercise the kind of control he had in mind." Pettit appeared to be unmoored by this change. He became unusually short with people like Ron Gallatin, who had an impish quality about him--once, according to Cecil, Pettit told Gallatin to "fuck off" when he popped his head in Pettit's office door. This was out of character. "Usually Chris only yelled when someone deserved to be yelled at," says one of Pettit's colleagues. On
Gregory in turn once told Tucker he thought she was "evil." Others said she was a prima donna. She had risen swiftly to the head of research position, yet according to Tucker she also had a reputation for taking breaks during the day to run personal errands, which was not considered a Lehman-like work ethic. Now she began showing up to meetings with Pettit that Mary Anne felt she had no business attending. Some people wondered: Had she slept her way to the top? For many months Pettit kept
Kirk had reportedly asked the driver when he had at first demurred. When Gregory heard what had happened, he was furious, according to colleagues. He docked $1 million off Kirk's bonus. In early 2008, Nagioff told Gregory he was exhausted from the transatlantic commute and he was quitting. Instead of appointing the obvious successor--Kirk--Gregory chose Andrew Morton, a Canadian who had met Fuld just twice, to run the fixed income division. There are reports that Kirk either quit and was
with the books. It was a long shot, but within a matter of months both Goldman Sachs and Morgan Stanley would be scrambling to do the same thing. So, with the help of a Sullivan & Cromwell lawyer, H. Rodgin "Rog" Cohen, a Lehman team drafted a proposal called "The Impact of Becoming a Bank." Lehman's SpinCo team--Fuld, Russo, McDade, Lowitt, Freidheim, Lessing, and Lehman treasurer Paolo Tonucci--floated the idea on a conference call in July with the president of the New York Federal