The Devil's Casino

Amazon.com ReviewThey 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.

Amazon Exclusive: QA with Author Vicky Ward

The Devil’s Casino traces the history of the players and the company in a way that makes the fall of Lehman seem inevitable. Would you agree with that statement and why or why not? Yes I would. I don’t think that the way Lehman was run was sustainable in the long-term. You cannot run a major securities firm without tolerating dissent or change at the top. Lehman’s “one firm” culture that made it so great when it was a tiny sub-division of a much larger entity became its nemesis when it was a stand-alone investment bank. Anyone who disagreed with Dick Fuld, or more importantly, the firm’s day-to-day manager Joe Gregory was either fired or quit. That is not the way Goldman Sachs is run, nor JP Morgan Chase. In those houses the CEOs seek out all sorts of different views in their senior executives. At Lehman anyone who argued about risk management was shoved aside. Eventually that position is not tenable.

Discuss some of the people you were able to talk to throughout the writing process. Do you have a favorite interview or experience during the process? Well, I loved talking to Peter A. Cohen because he’s famous (to readers of Barbarians at the Gate) as being one of the most terrifying cigar-chomping bankers on The Street but I found him rather charming. He still carries his cigar. He just doesn’t smoke it anymore!

I also really enjoyed meeting Bob Steel, the former Treasury Undersecretary. I found him to be a very thoughtful judge of character who had a very large perspective not just on Wall Street but on the world. Hank Paulson too was really terrific. Very blunt, and actually very, very funny! When he told me that he used to tell Goldman Sachs bankers “listen, everyone hates you except your mother – and if you are lucky – your wife” it was hilarious! He was making the point that bankers become their own worst enemies if they are ostentatious – which he most certainly is not.

Some of the best interviews were off the record so I cannot say who they were with but I talked to some people so often that I felt my life would be dramatically different once the book was over: it would be very odd not to talk to them all the time.

I also did love Karin and Bradley Jack. Karin Jack has got to have the funniest sense of humor in a Wall Street wife I’ve ever heard – and I loved the fact that her ex-husband actually backed up everything she said (which was essentially how grim it was to be a Lehman wife!). They were a terrific pair.

And then there were just some fabulous people who really saw things straight and put me straight. John Cecil, Lehman’s former CFO, was painstakingly patient with me. I really owe him. And Tom Hill, the vice-chairman of Blackstone was a man I came to greatly admire. Even though Dick Fuld had shafted him back in 1993, he had a lot of sympathy for the Lehman people and I think really felt the tragedy of the firm’s collapse.

Share with us one of your key takeaways from your experience writing The Devil’s Casino. Weirdly, that not all bankers are bad and that there are many shades of grey on Wall Street; it isn’t black and white. I think there was a lot of good and bravery in some of the protagonists of the book, and not all of them chose to take the Machiavellian path to ultimate power and riches, no matter what the risk or cost. Tom Tucker is an unsung hero: the former head of sales, who grew horrified at what they’d all turned into and gave back his bonus and set up a non-profit foundation for underprivileged children. Dick Fuld, too, actually was a very moral man, whose mistakes, I think were more unintentional, than intentional for the most part. This doesn’t excuse him. It just makes the story more interesting.

What are the implications for the future, post-Lehman and post-crash? Well, to be honest, not good. I think the book is really a kind of morality-tale. It shows us how the best intentions go astray and how the will to acquire, to succeed, is in the end a force of human nature and is rarely tempered and overcome. I think the book shows that no matter what the “rules” or “regulations” are on the Street, clever or hungry bankers have always historically found a way around them. So I think that we will see history repeated – probably not tomorrow. But eventually – yes. Doesn’t history always get repeated? Isn’t that the irony of humanity?

Review"Contains some fascinating pen-portraits of Lehman's characters—Mr Fuld and his sycophantic court . . . ." (The Economist Online)

"Ward sheds light on the four childhood friends who planned to take the financial world by storm while keeping their heads on their shoulders, and how quickly the second part of the play fell by the wayside amidst a brutal corporate coup and bumbling mismanagement that brought the firm down. The Devil's Casino serves as both an impressive work of investigative journalism and a cautionary tale of the culture surrounding American finance." (The Daily Beast)

"Ward's book is rich on details . . . when Ward connects the dots, the rough conclusion she comes up with is that fatal flaws of Fuld's culture brought Lehman down." (Reuters)

"A fascinating, deftly paced tale." (Metro.co.uk)

"Vanity Fair Contributing Editor Vicky Ward serves up a book about an investment bank that is a spicy, dishy dish . . . Ward builds a convincing case that duplicity and betrayal in the mid-'90s eventually led to the demise of Lehman Brothers." (Bloomberg BusinessWeek)

"…The Devil's Casino has everything readers might want to know about the personal foibles and shopping habits of key Lehman leaders and their wives…a fascinating read." (Financial Times)

"What's remarkable about this narrative is that Ward...manages to humanize many of the central figures involved in the rise and fall of one of Wall Street’s largest firms, offering profound insight into the titans of finance whose recklessness, greed, and competitiveness brought the US economy to the brink of collapse. The story plays out like a Shakespearean tragedy (Ward even includes a "Cast of Characters") in which the very principles upon which the firm was built prove to be its undoing. . . The Devil's Casino. offers a fascinating glimpse into the culture of one of the most powerful firms on Wall Street. One hopes that the history it chronicles will also serve as a cautionary tale for the financial industry's still-uncertain future." (The Boston Globe)

"In a terrific book Vicky Ward takes us into the heart of the denial machine. Hers is the story of Lehman Brothers, then Wall Street's fourth largest investment bank, soon to be its biggest casualty. . . Ward takes us into the world of these bankers, and shows us the lives they were leading in the years before the crash. At first, they saw themselves as "good guys" – bankers who would not become blinded by greed. But then they began to see how much money could be made and their lifestyles changed. They did not seem to be their old selves any more. This is what Ward does so well: she shows us the world of private jets and helicopters, the women with personal shoppers and shelves full of unworn shoes. She shows us how it is that people, even though they are multi-millionaires, can still have an addict's desperation for money." (The Guardian)

In the fall of 2008, the 150-year-old financial institution Lehman Brothers spectacularly melted down. The liquefied remains then ignited, joining the worldwide conflagration that became the great recession that is now either over or not, depending on whom you talk to. In short order, a host of formerly rock-solid institutions showed cracks that ran all the way from their foundations to the aeries occupied by their greedy, ineffective senior management. Firms that once represented all that was trustworthy in our financial system teetered, then fell. Even insurance companies that were responsible for the welfare of others were revealed to be the oldest permanent floating craps game in New York.

"Vicky Ward's "The Devil's Casino" is an able new entrant into this crowded genre, and people who hate losers who are not their friends should enjoy it very much. It chronicles the sad and messy end of the House of Lehman in a relatively terse and fast-moving 270 pages, making it a mere social X-ray of a book by today's standards of nonfiction heft, which often rivals the unsecured debt load of a failed bank. Ward carefully and skillfully tracks the last 25 or so years of the great, doomed enterprise, and her portrait of a business entity is often engaging, spicy and amusing. I particularly enjoyed the horror stories about those few, strategically challenged souls who had the temerity not to learn golf. Theirs was a demise that only outsiders to our fascist corporate golfing culture can appreciate. And the tick-tock of deals, fads, decisions and transactions that took place over a very long time can be exciting. The book also does a fine job of sketching several outlandishly banal individuals who rose to prominence in the firm and ultimately were responsible, each in a different way, for its demise." (The Washington Post)

"Vicky Ward is a British export to New York, with a degree in English Literature – and it shows. She writes stylishly and she understands, unlike other authors who have rushed into print with accounts of the financial crisis, that enduring literature is not created by unravelling transactions but by illuminating complex personalities." (Mail on Sunday)

“Vicky Ward's The Devil's Casino is an able. entrant into this crowded genre, and people who hate losers who are not their friends should enjoy it very much. It chronicles the sad and messy end of the House of Lehman in a relatively terse and fast-moving 270 pages. Ward carefully and skillfully tracks the last 25 or so years of the great, doomed enterprise, and her portrait of a business entity is often engaging, spicy and amusing. The book also does a fine job sketching several outlandishly banal individuals who rose to prominence in the firm and ultimately were responsible, each in a different way, for its demise.” (Stanley Bing, The Free Press)

“A terrific tale of the weird and not‑so‑wonderful world of Lehman Brothers: the personalities, the bonuses, and best of all the backstabbing politics of the Louboutin-shod bankers' Wags. The now-vilified former CEO, Richard Fuld , is portrayed not just as the aggressive "Gorilla" of Wall Street lore but as a human sponge who absorbed the attributes of smarter colleagues to the point of stealing their entire personality.” (The Guardian)

“The Devil’s Casino, well researched, chatty, lively, sets itself up as a successor to Greed and Glory on Wall Street, Ken Auletta’s 1986 book about Lehman. But the clichés of business articles are too frequent here: standing ovations on the trading floor, the rich wife’s shoe collection and so on. . . as she charts the rivalries of life on Wall Street, Ward entertains with rich detail: the rough-edged Fuld taking elocution lessons and copying the nail-clipping habits of a smoother senior whose job he desires; Henry Kissinger at a board meeting, stirring his iced tea with a pencil. Ward shows that more than two dec­ades ago, Lehman was developing dodgy habits that would cause trouble later. For example, it used a secret cash cushion known as “Dick’s reserve” to polish its results at the end of each quarter. The book skillfully depicts the lives lived in the background of great clashing events. And it also hints at what Wall Street has become since the crisis, at the apparent dominance of two survivors, Goldman Sachs and JPMorgan Chase.” (The New York Times)