Power, Greed and Fame on Stock market: the Fall of the Lehman Siblings Essay

BYLINE: By Ken Auletta; Ken Auletta is a writer and newspapers columnist in whose most recent publication is ''The Art of Corporate Accomplishment. '' SECTION: Section 6; Page 29, Column you; Magazine Office

LENGTH: 11488 words

FOR MANY YEARS THE ANIMOSITY HAD been building. And now, by lunch, it began to push through. Lewis Glucksman, the co-chief executive expert of Lehman Broth-ers Kuhn Loeb, a shorter, rumpled gentleman with the deal with of a Russian general, who was disparaged simply by Wall Street green bloods like a lowly ''trader, '' Lew Glucksman would leave the lunch table determined to get rid of Peter G. Peterson, his imperious co-C. E. Um. at the digno investment financial house, via his task. The lunch took place upon July doze, 1983, as well as the fallout from the explosion this triggered carried the sto-ry from the organization pages towards the front web pages. Thirteen days and nights later, Peterson, a celebrated success story - director of Bells & Howell at the age of 34, Secretary of Commerce beneath President Nixon and the guy who had helped rescue Lehman from failure in 1973 - can be forced out from the firm he had helped guide to five consecutive record profit years. Ten weeks later, Wall Street's most ancient continuing expense banking collaboration, a firm that had survived for 134 years (box, page 31), would fail to survive the reign of Lewis T. Glucksman and would be purcahased by Shearson/American Express, one of the superb whales that now dominate Stock market. This is the account of the land of Lehman Brothers, pieced together over a period of 10 months. It symbolizes some 45 hours of interviews with Peterson approximately 30 several hours with Glucksman. It also symbolizes extensive interviews with all the users of Lehman's board of directors, with 34 energetic or previous partners, with numerous as-sociates, with staff and people on and around Wall Street. Many inner Leh-man papers and economical records were reviewed. Information of events have been affirmed by individuals, including adversaries. What comes forth is a modern day melodrama, the story of an irreconcilable conflict be-tween two guys, a story of cowardice and intrigue, of greed for cash and electric power and beauty. In its wider implications, late Lehman gives a window for the forces which might be reshaping Wall Street and capitalism. When Glucksman challenged Peterson, Lehman Brothers was more profitable than it had been at any time in its lengthy history, hitting $15 , 000, 000 a month in pre-tax and pre-bonus profits over the earlier 12 months. With capital of virtually $250 mil, the organization ranked among Wall Street's largest investment banking houses, behind these kinds of names because Salomon Friends; Goldman, Sachs; First Boston and Morgan Stanley. As opposed to dozens of old-line firms that had previously succumbed to the pressures of consolidation that had been reshaping Stock market - T. E. Hutton; Loeb Rhoades; Hayden Rock; Hornblower & Weeks; White, Weld; Kuhn Loeb, one example is - Leh-man had rebounded strongly from the difficulties in the early 1970's. Business was booming - partners had been, by the majority of standards, rich, and some elderly partners had been making nearly $2 , 000, 000 a year in salary, bonus and payouts from their Lehman stock. But, such is definitely the volatility of Wall Street today that, within just months, Lehman was continuous loss of, losing money and partners. That selling the firm seemed to be the only way just to save it raises inquiries not only about the leadership from the new managing team yet also about whether exclusive investment relationships are des-tined to become dinosaurs. Business is going on, naturally. And it can probably be said with confidence that the combined firm will give you a wider array of expense banking companies to their cli-ents and that it might be managed more efficiently. Precisely what is lost can be described as connection to the past that worked out back 134 years and, like the tenacity of daytime baseball for Wrigley Field in Chicago, rooted visitors to a set of distributed traditions, one common memory. THE STORY BEGINS IN JULY OF 1983. Ruben B. Carter,...

Essay upon Partnerships