Wall Streeters: The Creators and Corruptors of American Finance

Epigraph: Ron Chernow, The House of Morgan: An American Dynasty and the Rise of Modern Finance (New York: Grove, 1990), 155. Citing U.S. Congress, House, testimony before the Money Trust Investigation, 67.

1. Chernow, The House of Morgan, 155.

2. Jean Strouse, Morgan: American Financier (New York: Random House, 1999), 46.

3. Chernow, The House of Morgan, 67.

4. Strouse, Morgan, 306.

6. Chernow, The House of Morgan, 65.

7. John Brooks, Once in Golconda: A True Drama of Wall Street, 1920–1938 (New York: Harper & Row, 1969), 46.

8. Sigmund Diamond, The Reputation of the American Businessman (Cambridge, Mass.: Harvard University Press, 1955), 88.

9. Chernow, The House of Morgan, 155. Citing U.S. Congress, House, testimony before the Money Trust Investigation, 57 and 67.

1. Joseph E. Stiglitz, “Capitalist Fools,” Vanity Fair, January 2009.

2. John Steele Gordon, The Great Game: The Emergence of Wall Street as a World Power, 1653–2000 (New York: Scribner, 2000), 186.

3. Ron Chernow, The House of Morgan: An American Dynasty and the Rise of Modern Finance (New York: Grove, 1990), 128.

4. John Brooks, Once in Golconda: A True Drama of Wall Street, 1920–1938 (New York: Harper & Row, 1969), 198.

1. Ron Chernow, The House of Morgan: An American Dynasty and the Rise of Modern Finance (New York: Grove, 1990), 124.

3. Ron Chernow, The Warburgs: The Twentieth-Century Odyssey of a Remarkable Jewish Family (New York: Random House, 1993), 131.

4. Paul M. Warburg, “Defects and Needs of Our Banking System,” New York Times, January 6, 1907.

6. Warburg, The Federal Reserve System, 1:18.

8. Paul M. Warburg, “A Plan for a Modified Central Bank,” New York Times, November 12, 1907.

9. Paul M. Warburg, “The Discount System in Europe,” Proceedings of the Academy of Political Science in the City of New York, May 1910, 129–158.

10. Warburg, The Federal Reserve System, 1:56.

12. Michael A. Whitehouse, “Paul Warburg’s Crusade to Establish a Central Bank in the United States,” The Region (a publication of the Federal Reserve Bank of Minneapolis), May 1989.

13. Warburg, The Federal Reserve System, 1:60–61.

15. Chernow, The Warburgs, 138.

16. In a speech on November 10, 1913, a prominent Democrat who was involved in drafting the party’s platform stated that the phrase, “We oppose the so-called Aldrich Plan or the establishment of a central bank,” suffered from an unfortunate typographical error. The word “or,” he said, was mistakenly inserted instead of the intended “for,” changing the actual intent of the sentence from a dissent with respect to the Aldrich Plan into a wholesale rejection of establishing any form of central bank. See Vicki A. Mack, “Frank Vanderlip and the Founding of the Fed,” Financial History, Winter 2014.

3. Carter Glass, An Adventure in Constructive Finance (Garden City, N.J.: Doubleday, 1927), 69.

4. Smith and Beasley, Carter Glass, 64.

5. Jean Strouse, Morgan: American Financier (New York: Random House, 1999), 4.

7. Paul M. Warburg, The Federal Reserve System: Its Origin and Growth (New York: Macmillan, 1930), 1:421.

9. Glass, An Adventure in Constructive Finance, 61.

11. Warburg, The Federal Reserve System, 1:422.

12. Glass, An Adventure in Constructive Finance, 116.

13. Ron Chernow, The Warburgs: The Twentieth-Century Odyssey of a Remarkable Jewish Family (New York: Random House, 1993), 138.

16. Glass, An Adventure in Constructive Finance, 2.

18. Warburg, The Federal Reserve System, 1:7.

19. Glass, An Adventure in Constructive Finance, 31.

20. Warburg, The Federal Reserve System, 1:177.

1. “Faith, Bankers & Panic,” Time, November 11, 1929.

2. A number of earlier works described the Senate hearings, including Brooks, Once in Golconda; Ron Chernow, The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (New York: Grove, 1990); Maury Klein, Rainbow’s End: The Crash of 1929 (New York: Oxford University Press, 2001); Ferdinand Pecora, Wall Street Under Oath: The Story of Our Modern Money Changers (New York: Simon & Schuster, 1939); Michael Perino, The Hellhound of Wall Street: How Ferdinand Pecora’s Investigation of the Great Crash Forever Changed American Finance (New York: Penguin, 2010); Arthur Schlesinger Jr., The Coming of the New Deal (Boston: Houghton Mifflin, 1959); and Joel Seligman, The Transformation of Wall Street: A History of the Securities and Exchange Commission and Modern Corporate Finance (Boston: Houghton Mifflin, 1982).

3. Seligman, The Transformation of Wall Street, 15.

6. Brooks, Once in Golconda, 191.

7. Pecora, Wall Street Under Oath, 4.

8. “Wealth on Trial,” Time, June 12, 1933.

10. Pecora, Wall Street Under Oath, 32.

12. Seligman, The Transformation of Wall Street, 34–35.

13. Chernow, The House of Morgan, 372.

14. Seligman, The Transformation of Wall Street, 36–37.

15. Pecora, Wall Street Under Oath, 285.

18. Perino, The Hellhound of Wall Street, 221.

19. “The Damnation of Mitchell,” Time, March 3, 1933.

20. Pecora, Wall Street Under Oath, 116–117.

21. Ibid., 117–118.

22. Perino, The Hellhound of Wall Street, 77.

23. Pecora, Wall Street Under Oath, 92.

26. Ibid., 110–111.

31. Brooks, Once in Golconda, 198.

33. Pecora, Wall Street Under Oath, 263–264.

1. Merrill Lynch is the current official name of the institution. The firm’s name has changed over the years to reflect transformations in its ownership and business, but to simplify the narrative, the firm will generally be referred to throughout this book as Merrill Lynch.

2. Edwin J. Perkins, Wall Street to Main Street: Charles Merrill and Middle-Class Investors (Cambridge: Cambridge University Press, 1999), 102.

3. Ibid., 106, footnote with son-in-law Robert Magowan’s estimate.

5. Ibid., 147, based on statistics compiled by the New York Stock Exchange.

7. Ibid., 213. The firm changed its fiscal year from December to February in 1956 and reported $82 million in revenues and $18.7 million in net profits before taxes. The amounts given for 1955/1956 are the author’s rough estimates for a normal twelve-month year.

8. Marcia Vickers, “Charles Merrill: Selling Stocks to the Masses,” Business Week, April 19, 2004.

9. John Kenneth Galbraith, The Great Crash, 1929 (Boston: Houghton Mifflin, 1954), 77–78.

10. Robert Sobel, N.Y.S.E.: A History of the New York Stock Exchange (New York: Weybright and Talley, 1975), 195–196.

11. New York Stock Exchange, Facts & Figures, “Highlights of NYSE Shareholder Census Reports (1952–1990),” accessed February 28, 2015, www.nyxdata.com/factbook.

12. Perkins, Wall Street to Main Street, 255.

13. Charles S. Geisst, The Last Partnerships: Inside the Great Wall Street Money Dynasties (New York: McGraw-Hill, 2001), 227.

14. John C. Bogle, Character Counts (New York: McGraw-Hill, 2002), 24.

1. John Bogle, Don’t Count on It! Reflections on Investment Illusions, Capitalism, “Mutual” Funds, Indexing, Entrepreneurship, Idealism and Heroes (New York: Wiley, 2011), 376.

3. Gilbert Kaplan, ed., The Way It Was: An Oral History of Finance 1967–1987 (New York: Morrow, 1988), 659–660.

4. Brad Barber and Terry Odean, “Trading Is Hazardous to Your Wealth: The Common Stock Performance of Individual Investors,” Journal of Finance, April 2000. See also Daniel Kahneman, “The Surety of Fools,” New York Times Magazine, October 23, 2011.

5. Lewis Braham, The House That Bogle Built: How John Bogle and Vanguard Reinvented the Mutual Fund Industry (New York: McGraw-Hill, 2011), 23.

6. Bogle, Character Counts, 3.

7. Readers interested in the legal and tactical details behind Bogle’s management coup will find a clearly written summary in chap. 5 of Braham’s, The House That Bogle Built.

8. Bogle, Character Counts, 3.

10. Joel Seligman, The Transformation of Wall Street: A History of the Securities and Exchange Commission and Modern Corporate Finance (Boston: Houghton Mifflin, 1982), 365–373.

11. Bogle, Don’t Count on It!, 479.

12. Bogle, Character Counts, 2, 78.

13. Bogle, Don’t Count on It!, 372–373.

14. In a 2014 article, Bogle estimates that the current all-in annual costs of the average actively managed fund are now 2.27 percent, and the same costs of an index fund are now just 0.06 percent. See John C. Bogle, “The Arithmetic of ‘All-In’ Investment Expenses,” Financial Analysts Journal, January/February 2014.

15. Statement attributed to Bogle in “The Best Investment Advice of All Time,” Forbes, June 30, 2014.

16. Edwin Lefevre, Reminiscences of a Stock Operator, rev ed. (New York: Wiley, 2006), 131.

17. Braham, The House That Bogle Built, 123.

18. Bogle, Don’t Count on It!, 371–372.

19. Bogle, Character Counts, 7.

20. Bogle, Don’t Count on It!, 571–572.

21. John C. Bogle, “The First Index Mutual Fund: A History of Vanguard Index Trust and the Vanguard Strategy,” monograph prepared for Bogle Financial Markets Research Center, 1997, accessed February 28, 2015, www.vanguard.com/bogle_site/lib/sp19970401.html.

22. Bogle, Don’t Count on It!, 371.

23. Justin Fox, “Saint Jack on the Attack,” Fortune, January 20, 2003.

24. Jim Collins, Good to Great: Why Some Companies Make the Leap … and Others Don’t (New York: Harper Business, 2001), 164.

25. Bogle, Character Counts, 28.

26. Bogle, Don’t Count on It!, 22.

28. Bogle, Character Counts, 271.

29. Bogle, Don’t Count on It!, 289.

30. William Baldwin, “You Were (Mostly) Right, Jack Bogle,” Forbes, September 13, 2010.

31. Paul Samuelson, as quoted in Bogle, Don’t Count on It!, 574.

1. Spencer C. Ante, Creative Capital: Georges Doriot and the Birth of Venture Capital (Boston: Harvard Business Press, 2008), 29.

6. Bylinsky, “General Doriot’s Dream Factory.”

7. Harold Evans, They Made America: From the Steam Engine to the Search Engine: Two Centuries of Innovators (New York: Back Bay, 2004), 377.

8. Ante, Creative Capital, 139.

10. “Our History,” Draper Investment Company, accessed February 28, 2015, at http://draperco.com/english/our-history.

11. Bylinsky, “General Doriot’s Dream Factory.”

12. Ante, Creative Capital, 194.

13. Andrew Metrick, Venture Capital and the Finance of Innovation (New York: Wiley, 2010), 10. See also George Fenn, Nellie Liang, and Stephen Prowse, 1998, “The Private Equity Market: An Overview,” Financial Markets, Institutions and Instruments 6(4).

14. Ante, Creative Capital, 201.

16. Bylinsky, “General Doriot’s Dream Factory.”

17. Peter Brooke, A Vision for Venture Capital: Realizing the Promise of Global Venture Capital and Private Equity (Boston: New Ventures, 2009), 153.

18. National Venture Capital Association, Yearbook 2013 (New York: Thomson Reuters), 9.

19. Cited by David H. Hu and Martin Kenney in “Organizing Venture Capital: The Rise and Demise of American Research & Development Corporation, 1946–1973,” Industrial and Corporate Change 14:592.

20. Tom Perkins, “Silicon Valley Is Not Wall Street,” Wall Street Journal, February 25, 2010.

Epigraph: Testimony before the Committee on Banking and Currency, U.S. Senate, Friday, March 11, 1955; quoted in Janet Lowe, ed., The Rediscovered Benjamin Graham (New York: Wiley, 1999), 120.

1. Benjamin Graham, The Memoirs of the Dean of Wall Street (New York: McGraw-Hill, 1996), 91–92.

4. F. Scott Fitzgerald, The Great Gatsby (New York: Scribner, 1925), 3.

5. Graham, Memoirs, 138.

7. Benjamin Graham, The Intelligent Investor: A Book of Practical Counsel, rev. ed. with updated commentary by Jason Zweig (New York: Harper, 2003), 204–205.

8. Graham, Memoirs, 144–145.

9. For additional details on the Guggenheim arbitrage, see Irving Kahn and Robert D. Milne, Benjamin Graham: The Father of Financial Analysis, Occasional Paper Number 5 (Charlottesville: Financial Analysts Research Foundation, 1977), 4–5.

10. Graham, Memoirs, 200.

14. Ibid., 201–212.

15. Benjamin Graham, “Special Situations,” Analysts Journal, Fourth Quarter, 1946.

16. Roger Lowenstein, Buffett: The Making of an American Capitalist (New York: Broadway, 1995), 43–44.

17. Kahn and Milne, Benjamin Graham, 45.

18. Graham, The Intelligent Investor, 523.

19. Benjamin Graham, “Is American Business Worth More Dead Than Alive?” Forbes, June 1, 1932; reprinted in Lowe, The Rediscovered Benjamin Graham, 14.

20. Kahn and Milne, Benjamin Graham, 18.

21. Benjamin Graham, “The New Speculation in Common Stocks,” address to the Financial Analysts Society, 1958; reprinted in Lowe, The Rediscovered Benjamin Graham, 43.

22. Walter J. Schloss, “Benjamin Graham and Security Analysis,” private writings, 1976; reprinted in Lowe, The Rediscovered Benjamin Graham, 3.

23. Benjamin Graham and David L. Dodd, Security Analysis (New York: McGraw-Hill, 1934), 54.

24. Graham, “The New Speculation in Common Stocks,” 44.

25. Kahn and Milne, Benjamin Graham, 43.

27. Graham, The Intelligent Investor, 533.

29. Testimony before the Committee on Banking and Currency, U.S. Senate, Friday, March 11, 1955; quoted in Lowe, The Rediscovered Benjamin Graham, 120.

30. Graham, Memoirs, 175.

31. Ibid., 320–321.

33. Ibid., 267–268.

34. Benjamin Graham and David L. Dodd, Security Analysis, 6th ed. (New York: McGraw-Hill, 2009), xi.

35. Barton Biggs, Hedgehogging (New York: Wiley, 2006), 81.

36. Graham, The Intelligent Investor, ix.

37. Hartman L. Butler Jr., “An Hour with Mr. Graham,” in Kahn and Milne, Benjamin Graham, 35.

38. Graham, The Intelligent Investor, 36.

39. Benjamin Graham, “The New Speculation in Stocks,” Analysts Journal, June 1958.

41. Graham, Memoirs, 157.

42. “The Father of Value Investing,” Fortune: 1988 Investor’s Guide, 48.

43. Graham, Memoirs, 314.

1. “Myron S. Scholes—Facts,” Sveriges Riksbank Prize in Economic Sciences, 1997, accessed February 22, 2015, www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1997/scholes-facts.html.

2. Myron S. Scholes, Derivatives in a Dynamic Environment, December 9, 1977, lecture delivered in connection with reception of Sveriges Riksbank Prize in Economic Sciences, 1997, 137, accessed February 22, 2015, www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1997/scholes-lecture.pdf.

3. “The Trillion Dollar Bet,” NOVA, PBS, February 8, 2000.

4. Wayne Luthringshausen, chairman, Options Clearing Corporation, video interview in “CBOE 40: A Celebration,” accessed February 22, 2015, at www.cboeoptionshub.com/cboe40.

5. Scholes, Derivatives in a Dynamic Environment, 137.

6. Gerry Lahey, former vice chairman, Chicago Board Options Exchange, video interview in “CBOE 40: A Celebration,” accessed February 22, 2015, at www.cboeoptionshub.com/cboe40.

7. Scholes, Derivatives in a Dynamic Environment, 138.

8. Roger Lowenstein, When Genius Failed: The Rise and Fall of Long-Term Capital Management (New York: Random House, 2000), 120.

9. Timothy Middleton, “A Nobel Winner Wears Several Fund Hats,” New York Times, October 26, 1997.

10. Lowenstein, When Genius Failed, 126.

11. Ibid., 128–129.

12. Michelle Celarier, “Citigroup: The Last Days of Salomon Brothers,” Euromoney, December 1998; cited in Rene M. Stulz, Risk Management and Derivatives (Mason, OH: South-Western, 2003), 607–611.

13. Roger Lowenstein, “Long-Term Capital: It’s a Short-Term Memory,” New York Times, September 7, 2008.

14. Lowenstein, When Genius Failed, 234.

15. Michael Lewis, “How the Eggheads Cracked,” New York Times Magazine, January 24, 1999.

16. David Cay Johnston, “A Tax Shelter, Deconstructed,” New York Times, July 13, 2003.

17. Myron Scholes, interviewed in “The Trillion Dollar Bet.”

18. Peter L. Bernstein, Capital Ideas Evolving (New York: Wiley, 2007), 124.

20. Saijel Kishan, “Scholes’s Platinum Grove Fund Halts Withdrawals After Losses,” Bloomberg, November 6, 2008.

21. Buffett, “Chairman’s Letter.”

1. Through the late 1930s and the early years of World War II, there is some evidence, albeit circumstantial, that despite Jones’s forced resignation from the Foreign Service, he was still serving as an intelligence agent in service to the U.S. State Department. There was never a clear explanation, for instance, why the department provided him with “rent allowances” during that period or arranged for a deferment from the wartime military draft. See Sebastian Mallaby, More Money Than God: Hedge Funds and the Making of a New Elite (New York: Penguin, 2010), 410n13.

3. Alfred Winslow Jones, “Fashions in Forecasting,” Fortune, March 1949.

4. Peter Landau, “Alfred Winslow Jones: The Long and Short of the Founding Father,” Institutional Investor, August 1968.

5. Carol J. Loomis, “The Jones Nobody Keeps Up With,” Fortune, April 1966.

6. Landau, “Alfred Winslow Jones.”

7. Carol J. Loomis, “Hard Times Come to the Hedge Funds,” Fortune, January 1970. Others estimated that the amount of funds under management was much higher. See, for instance, Peter Landau, “The Hedge Funds: Wall Street’s New Way to Make Money,” New York, October 21, 1968; and Mallaby, More Money Than God, 413nn57–58.

8. Barton Biggs, Hedgehogging (New York: Wiley, 2006), 83.

10. Mallaby, More Money Than God, 39, appendix 2.

12. Loomis, “Hard Times Come to the Hedge Funds.”

13. John Thackray, “Whatever Happened to the Hedge Funds?,” Institutional Investor, May 1977.

14. Mallaby, More Money Than God, 112.

16. David Sowell, Investment Banks, Hedge Funds, and Private Equity, 2d ed. (Oxford: Elsevier, 2010), 204–205.

17. Charles Stein, “Why Are Hedge Funds Special? They’re Not,” Bloomberg Businessweek, July 23, 2012.

18. Peter Lattman, “Hedge Fund Impresario Plays Host in Las Vegas,” New York Times, May 9, 2013.

19. Simon Lack, The Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good to Be True (New York: Wiley, 2012), 1. His results are reinforced by other compilations of long-term hedge fund results. See, for instance, Stein, “Why Are Hedge Funds Special?”; and Sheelah Kohtkar, “Hedge Funds Are for Suckers,” Bloomberg Businessweek, July 11, 2013.

20. Robert Burch IV, interviewed by the author, September 13, 2013.

Epigraph: “How Drexel’s Wunderkind Bankrolls the Raiders,” Business Week, March 4, 1985, quoting John Kissick, Drexel Burnham Lambert chief of West Coast corporate finance.

1. Connie Bruck, The Predators’ Ball: The Junk Bond Raiders and the Man Who Staked Them (New York: Simon & Schuster, 1988), 24.

2. Robert Sobel, Dangerous Dreamers: The Financial Innovators from Charles Merrill to Michael Milken (New York: Wiley, 2000) 64–65.

3. Jesse Kornbluth, Highly Confident: The Crime and Punishment of Michael Milken (New York: Morrow, 1992), 42–43.

4. Bruck, The Predators’ Ball, 28.

7. Charles R. Geisst, The Last Partnerships: Inside the Great Wall Street Money Dynasties (New York: McGraw-Hill, 2001), 264.

8. Bruck, The Predators’ Ball, 33.

11. Sobel, Dangerous Dreamers, 76.

13. Kornbluth, Highly Confident, 63.

14. Sobel, Dangerous Dreamers, 98.

15. James B. Stewart, Den of Thieves (New York: Simon & Schuster, 1991), 121.

16. Dennis Levine and Martin Siegel, both Drexel Burnham Lambert investment bankers, pleaded guilty to providing Boesky with inside information.

17. Bob Greene, “A $100 Million Idea: Use Greed for Good,” Chicago Tribune, December 15, 1986.

18. Bruck, The Predators’ Ball, 320.

19. Daniel Fischel, Payback: The Conspiracy to Destroy Michael Milken and His Financial Revolution (New York: HarperBusiness), 1995, 130.

20. Edward Jay Epstein, “The Secret World of Mike Milken,” Manhattan, Inc., September 1987.

23. Fischel, Payback, 201.

24. Kornbluth, Highly Confident, 296.

25. Books that paint an unfavorable portrait of Milken and Drexel include: Bruck, The Predators’ Ball; Stewart, Den of Thieves; and Stein, A License to Steal (New York: Simon & Schuster, 1992). Books that are generally positive include: Sobel, Dangerous Dreamers; Kornbluth, Highly Confident; and esp. Fischel, Payback. For one of the few balanced accounts, see Joe Nocera, “Michael Milken, Mitigated (Well, a Bit),” GQ, December 1992; reprinted in Good Guys & Bad Guys: Behind the Scenes with the Saints and Scoundrels of American Business (and Everything in Between) (New York: Penguin, 2008), 98–106.

26. Kornbluth, Highly Confident, 306.

27. Cora Daniels, “The Man Who Changed Medicine,” Fortune, November 24, 2004.

1. Christina Mlynski, “Father of Securitization Doubts Easy Return to Private Mortgage Bonds,” Housing Wire, June 17, 2013.

2. Many examples are described in some detail in chaps. 6 and 7 of Michael Lewis’s Liar’s Poker (New York: Penguin, 1990).

3. James B. Stewart, Den of Thieves (New York: Simon & Schuster, 1991), 60.

4. Lewis, Liar’s Poker, 105.

5. See Kenneth A. Snowden, “Mortgage Banking in the United States, 1870–1940,” working paper, Research Institute for Housing America, Washington, D.C., September 29, 2013, 18–22.

6. Lewis, Liar’s Poker, 111.

11. Charles W. Calomiris, “The Mortgage Crisis: Some Inside Views,” Wall Street Journal, October 27, 2011.

13. Phillip Swagel, “The Cost of the Financial Crisis: The Impact of the September 2008 Financial Crisis,” Pew Financial Reform Project Briefing Paper #18, Pew Charitable Trusts, Philadelphia, 2009.

14. “Lewis S. Ranieri: Your Mortgage Was His Bond,” Bloomberg Businessweek, November 28, 2004.

15. Julia Finch, “Twenty-Five People at the Heart of the Meltdown,” Guardian, July 25, 2009.

16. Kevin Phillips, Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism (New York: Viking Penguin, 2008), 108.

17. Lewis Ranieri, “Lewis Ranieri Sets the Record Straight,” interview with CNBC, February 23, 2011, http://video.cnbc.com/gallery/?video=3000006596.

18. William Alden, “An Old Champion Returns for Mortgage-Based Bonds,” New York Times, June 27, 2013. See also Mlynski, “Father of Securitization Doubts Easy Return to Private Mortgage Bonds.”

19. Shawn Tully, “Lewis Ranieri Wants to Fix the Mortgage Mess,” Fortune, December 9, 2009.

20. “Thoughts on the Business of Life,” Forbes, June 8, 2009.

Epigraph: Notes from video interview with William Donaldson compiled by Amy Blitz, Harvard Business School Director of Media Development for Entrepreneurial Management, March 2002, www.hbs.edu/entrepreneurs/pdf/williamdonaldson.pdf, 14.

7. Notes from video interview with Richard Jenrette compiled by Amy Blitz, Harvard Business School Director of Media Development for Entrepreneurial Management, March 2002, www.hbs.edu/entrepreneurs/pdf/richardjenrette.pdf, 6.

8. Jenrette video interview, 6.

9. Donaldson video interview, 8.

10. Notes from video interview with Dan Lufkin compiled by Amy Blitz, Harvard Business School Director of Media Development for Entrepreneurial Management, April 2002, www.hbs.edu/entrepreneurs/pdf/danlufkin.pdf, 5.

11. Common Stock and Common Sense (New York: Donaldson, Lufkin & Jenrette, 1959), 2.

12. Jenrette video interview, 7.

13. Donaldson video interview, 6.

14. Jenrette video interview, 7.

15. “Courting the Big Stock Buyers,” BusinessWeek, February 22, 1964.

16. Donaldson video interview, 5.

17. Jenrette video interview, 10.

18. Donaldson, Lufkin & Jenrette, Preliminary Prospectus, April 7, 1970, 19.

19. Carol J. Loomis, “They’re Tearing Up Wall Street,” Fortune, August 1, 1969.

20. Donaldson, Lufkin & Jenrette, Preliminary Prospectus, 12.

21. Loomis, “They’re Tearing Up Wall Street.”

22. Donaldson video interview, 10.

26. Loomis, “They’re Tearing Up Wall Street.”

28. Jenrette video interview, 11.

29. Joel Seligman, The Transformation of Wall Street: A History of the Securities and Exchange Commission and Modern Corporate Finance (Boston: Houghton Mifflin, 1982), 482.

30. Lufkin video interview, 8.

32. Jenrette video interview, 18.

1. Amey Stone and Mike Brewster, King of Capital: Sandy Weill and the Making of Citigroup (New York: Wiley, 2002), 92.

2. Monica Langley, Tearing Down the Walls: How Sandy Weill Fought His Way to the Top of the Financial World … and Then Nearly Lost it All (New York: Simon & Schuster, 2003), 43.

5. Stone and Brewster, King of Capital, 191.

6. Allen Myerson, “Building a Wall Street Empire, Again,” New York Times, March 13, 1993.

7. Langley, Tearing Down the Walls, 269.

8. Stone and Brewster, King of Capital, 222.

9. Langley, Tearing Down the Walls, 121.

10. Federal Trade Commission, “FTC Charges One of Nation’s Leading Sub-Prime Lenders with Abusive Lending Practices,” press release, March 6, 2001. www.ftc.gov/news-events/press-releases/2001/03/ftc-charges-one-nations-largest-subprime-lenders-abusive-lending.

11. Quoted by Katrina Brooker in “Citi’s Creator, Alone with His Regrets,” New York Times, January 2, 2010.

1. See for instance, Thomas L. Friedman “Did You Hear the One About the Bankers?,” New York Times, October 29, 2011, in which the author cites a study by the Center for Responsive Politics calculating that the $2.3 billion the finance sector (financial institutions, insurance companies, and real estate interests) contributed in the twenty years between 1990 and 2010 exceeded the combined contributions from health care, energy, defense, agriculture, and transportation interests.