The Devil's Casino Read Online Free PDF Page A

to say, and Dick would say, ‘I like it. Buy it.’ So everyone would go back to their desks and buy
everything
, you know? Basically, everybody did what Dick said—they made money because Dick was right often enough.” Almost no one dared cross Fuld and take an alternative view, because if they lost money on a trade he hadn’t sanctioned, there was “hell to pay,” according to this trader.
    Glucksman had an us-versus-them mentality, and “them” included Lehman’s investment bankers. In those days, the traders would put their positions on five-by-seven-inch cards on a wall so that everyone could see what had been bought and sold. The color of the ink indicated which type of security it was. According to a senior person at LCPI , if ever the traders heard that Arthur Schulte, Lehman’s partner responsible for trading, was on his way over from One William Street (Lehman Brothers’ headquarters) to 9 Mill Lane (then the headquarters of LCPI ), the cards were quickly pulled off the board. There were limits to the total value of their positions, and at midday those positions might be higher; essentially, they were hiding their volatility, how much risk they were taking on a daily basis.
    When Arthur left, the cards went back up. “It was a game,” says Newmark, “that was ingrained in people. That’s how Glucksman ran his business.” It was a game that taught these traders they “had to hide the facts.” It was also a very profitable game. And Dick Fuld was good at it.
    One anecdote starring him quickly turned into legend.
    It was the 1970s. Fuld was an associate trader and needed a trade signed by Allan Kaplan, then a partner and banker in charge of the commitments committee, to move forward. He went to see Kaplan, who was on the phone and motioned for Fuld to wait outside.
    Fuld came in anyway, and said, “I need you to sign something.” Kaplan again signaled for Fuld to wait for him outside.
    Fuld did not budge. “I know, but I need you to sign this.”
    Kaplan continued with his phone conversation and Fuld barked at him again. An irritated Kaplan got off the phone. Who was this annoying young guy? Didn’t he know you couldn’t just barge into an office on the banking floor, much less interrupt a phone call? Fuld explained he had a trade that needed Kaplan’s signature before he could make it.
    Kaplan decided to teach the impudent trader a lesson in protocol.
    He motioned toward his desk, strewn with paper. “You see all these piles on my desk? When they are gone, I will sign your paper.”
    Fuld leaned across the desk and cleared it in one sweep. Papers flew across the office as Fuld said, “Now may I have your signature?”
    Kaplan was astonished, but he signed. The legend of Dick Fuld—the gorilla—had begun.
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    By 1984 Fuld had just a few close friends on the trading floor. One was Glucksman. Another was James S. “Jim” Boshart III , a managing director, who had been hired in 1970 by Glucksman mostly because of his jump shot. Boshart was six feet five inches tall and a former Wake Forest University basketball star, and Glucksman badly wanted the LCPI team to win the Lehman basketball championship. (The team had lost its first four games before Boshart joined them, but then ran off 12 straight wins to win the Wall Street basketball league.) That Boshart, who would rise to be a partner and chief administrative officer ( CAO ) by 1983, had a superb gift for crunching numbers was a happy coincidence. When he’d joined, Glucksman had rushed across the trading floor to greet him. “I know who you are. I’ve read your resume. You’ re not qualified to work here.” He paused. “But I’ ll give you a contract for three months so you can play on the basketball team. It’s up to you if you make it work on the trading front.”
    And Boshart had.
    A joke went around Lehman after Boshart was hired that “if you could jump up and touch the ceiling you’d be hired.”
    It was not surprising that