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Greed and Glory on Wall Street: The Fall of the House of Lehman
Greed and Glory on Wall Street: The Fall of the House of Lehman
Greed and Glory on Wall Street: The Fall of the House of Lehman
Ebook434 pages6 hours

Greed and Glory on Wall Street: The Fall of the House of Lehman

By Ken Auletta

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The inside account of a financial meltdown that reshaped Wall Street

In 1983, Lew Glucksman, then co-CEO of the heralded investment bank Lehman Brothers, demanded the resignation of chairman Pete Peterson, with whom he had long argued over how to manage the company. Shockingly, Peterson, who had taken charge a decade earlier and led Lehman from near collapse to record profits, agreed to step down. In this meticulously researched volume, Ken Auletta details the turmoil, infighting, and power struggles that brought about Peterson’s departure and the eventual sale of one of Wall Street’s oldest and most prestigious firms.
 
Set against the backdrop of the 1980s stock exchange, where hotshot young traders made and lost millions in a single afternoon, the story of Lehman’s fall is a suspenseful battle of wills between bankers, traders, and executives motivated by greed, envy, and ego. Auletta, who conducted hundreds of hours of interviews and was granted access to private company records, has crafted a thorough, enduring, and engaging account of pivotal events that continued to influence this storied financial institution until its ultimate demise in 2008.
LanguageEnglish
PublisherOpen Road Media
Release dateSep 29, 2015
ISBN9781504018609
Greed and Glory on Wall Street: The Fall of the House of Lehman
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Author

Ken Auletta

Ken Auletta (b.1942) has written for the New Yorker since 1977, where he has been the “Annals of Communications” columnist since 1992. He is the author of eleven books, five of which are national bestsellers. Early in his career, Auletta was the chief political correspondent for the New York Post, a columnist for the Village Voice and the New York Daily News, and a writer for New York magazine. For the New Yorker, he has probed corporate culture and the rise of the Internet, and profiled business leaders such as Bill Gates, Barry Diller, and Rupert Murdoch. Auletta won a National Magazine Award in 2001 for his New Yorker feature on Ted Turner, and he has been a judge for both the Pulitzer Prize and the Livingston Awards for Young Journalists. His books include The Underclass; Googled: The End of the World As We Know It; Greed and Glory on Wall Street: The Fall of the House of Lehman; The Highwaymen: Warriors of the Information Superhighway; and World War 3.0: Microsoft and Its Enemies. Auletta lives in Manhattan.

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Reviews for Greed and Glory on Wall Street

3/5

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  • 4/5
    Inside story of greed, power and dirty politics within Lehman Brothers in the 1980's. Details dealings for Lehman to merge with Shearson/American Express. Focus of the book was on the CEO battle for Lehman between Pete Peterson and Lewis Glucksman. Upper management and the Board were concentrated on their bonuses and benefits.
  • 3/5
    Nothing special - provided glimpse of power struggle at Lehman.

Book preview

Greed and Glory on Wall Street - Ken Auletta

INTRODUCTION

A few days after Lehman Brothers Kuhn Loeb was sold to Shearson/American Express in April 1984, Peter G. Peterson was holding court at the Candy Kitchen in Bridgehampton, Long Island, a coffee shop–ice cream parlor that is a magnet for the writers, producers, publicists and businessmen who spend their weekends in or near that fashionable resort. The former chairman of Wall Street’s oldest continuing partnership shared his booth with journalist William Broyles, who had taken his son and daughter there for waffles. Broyles tried to juggle Peterson’s obvious appetite for an audience with the incessant demands of his children—for maple syrup, milk, a fork, a napkin. I happened by in search of the morning papers, and Bill invited me to join them. Oblivious to the children, Peterson went on with riveting tales of what really happened to the partnership launched by the Lehman family one hundred and thirty-four years before.

Peterson’s account seemed worthy of a Theodore Dreiser novel, and Broyles, a talented writer, expressed interest in pursuing the story. Peterson said that Ed Klein, editor of the New York Times Magazine, had called him that Friday to say that he had not yet settled on a writer, but wanted to know whether Peterson would cooperate on a story about the death of Lehman Brothers. Peterson said he would.

He seemed almost buoyed by news of the sale of the company he had once guided, as if the humiliation of the firm were a personal vindication, which, in a sense, it seemed to be. For just nine months before, in July 1983, Peterson had been ousted as chairman by his longtime colleague, Lewis L. Glucksman. His tale told, Peterson wandered from our table to another, where he repeated his tale. Broyles and I were left buzzing about what a hell of a story this might make. For Lew Glucksman, who had won the power struggle with Peterson, sounded like a fascinating cross between a paranoid Captain Queeg and a pathetic soul like Dreiser’s Charles Drouet, the traveling salesman with pretensions of grandeur in Sister Carrie.

Because I intruded on his conversation with Peterson, Bill Broyles had first crack at the story. But after thinking about it overnight, Broyles decided that a book on Vietnam had first claim on his time. Without a green light from Broyles, I would not have chased this story. I thank him.

The first thing I did was make a couple of calls to people I knew at Lehman. They confirmed the bare outlines of much of what Peterson said, cautioning that this was not a simple morality play with cardboard heroes and villains. It sounded like a terrific story, one that might expand my limited knowledge of Wall Street and its blizzard of new jargon—greenmail, leveraged buyouts, Pac-Man defenses, the two-tier, front-end loaded, boot-strap, bust-up, junk-bond takeover. Perhaps, I thought, what happened at Lehman might provide a vehicle to explore a larger story about how Wall Street and capitalism were changing.

But first I had to decide where to tell this story. I already knew the Times Magazine was committed to publishing an account.

As luck would have it, the Times telephoned early that week. The conference call came from Executive Editor Abe Rosenthal and Deputy Managing Editor Arthur Gelb. They asked if I would undertake a magazine assignment for them, but the subject they proposed, while important, just didn’t arouse me. I said no. There was a pause. Then I said, You know what I’d love to do is a long piece on the fall of Lehman Brothers. They liked the idea.

Ed Klein and I met for breakfast and agreed that I would spend the better part of a year reporting and writing a two-part, 25,000-word article for the Times Magazine. Throughout the reporting, writing and editing process the Times editors were extraordinarily supportive. In addition to Rosenthal, Gelb, Klein and Deputy Magazine Editor Martin Arnold, I wish especially to thank Michaela Williams, who edited the pieces with great care and was a pleasure to work with. Andrew Yarrow and Phyllis Shapiro performed fact-checking feats. Mary Marsh, a friend, slaved to help organize cartons of research material.

The idea for this book arose after I was well into the reporting for the pieces. I went to Jason Epstein at Random House, who has published and edited three of my four previous books, and said I thought the full story of what happened at Lehman and what was happening on Wall Street could not be contained in a 25,000-word article. He worried that two articles in the Times might dull interest in a book. I tried to reassure him that there was no way t