GREED AND GLORY ON WALL STREET: The Fall of the House of Lehman by Ken Auletta
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GREED AND GLORY ON WALL STREET: The Fall of the House of Lehman

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Last February, Auletta published a two-part article on the events leading up to the 1984 takeover of Lehman Brothers by Shearson/American Express in The New York Times Magazine. The fourfold expansion at issue here adds a wealth of blow-by-blow detail but precious little perspective to his earlier account. Having obtained scores of interviews with the principals and those who played lesser roles, Auletta (The Streets Were Paved with Gold, The Underclass, The Art of Corporate Success) is able to tell an inside story of the long-running power struggle at the venerable investment banking concern. The two largely unsympathetic protagonists were Peter G. Peterson--the aloof, patronizing chairman whose high-level contacts in business and government helped bring Lehman back from the brink of bankruptcy during the 1970's--and Lewis L. Glucksman, an angry, sensitive inside man whose trading talents contributed greatly to the firm's latter-day prosperity--and eventually earned him promotion to co-CEO status with Peterson. Once at the top, Glucksman had no interest in sharing either power or glory. Within a matter of weeks, in fact, his rule-or-ruin tactics forced the image-conscious Peterson to resign for the good of the firm--and his own reputation. Glucksman's days were numbered as well; hard times hit Wall Street in the nine months following his coup, and the securities industry's oldest partnership became Shearson's 18th acquisition. It seems not to have occurred to Auletta that there may have been less to the Lehman breakup than met hfs reportorial eye. For all its human interest, the Peterson/Glucksman conflict was but part of a larger drama to which the author alludes only in passing. He duly records the in-house friction between service-minded investment bankers (a numerical majority in the partnership) and risk-oriented traders (who accounted for roughly two-thirds of the firm's profits during its final years). Auletta fails, however, to convey the larger context; both groups were being overtaken by events that have created an ultracompetitive, globe-girdling marketplace in which nine-figure capital pools are minimum antes and social connections a wasting asset. As an independent partnership, anachronistic Lehman was living on borrowed time. In brief, then, conscientious and commendable reportage that scants the forest for trees. A better source of interpretive intelligence on the investment world's ongoing break with its past is Timothy J. Carrington's The Year They Sold Wall Street (p. 1236).

Pub Date: Jan. 15th, 1985
Publisher: Random House