The Devil's Casino_ Friendship, Betrayal - Vicky Ward [10]
"Hey, asshole," Fuld said. "Why don't you pick on someone your own size?"
"Are you talking to me?" the officer asked, astonished.
"Yes," Fuld said, and the two men started fighting.
After they were separated, Fuld was summoned by his commanding officer. "Do you
want to know my side of the story?" Fuld asked.
"No," came the answer. "There's only one side to the story."
With that, Fuld was kicked out of the program for insubordination, thus ending what he
had hoped would be a career in the Air Force.
He graduated in 1969, with a degree in international business.
Later that year, Lehman partner Herman Kahn told Paul Newmark, then a senior vice
president and treasurer of Lehman Commercial Paper Inc. (LCPI), that the grandson of
one of his clients was coming to work at the firm. Newmark was not surprised--such
friendly inbreeding had been common practice at Lehman Brothers for a long time.
" My son, my cousin, my . . . you know. Anyone who was a relative could get a job at
Lehman Brothers," Newmark says. "People at Lehman said Dick Fuld's grandfather was
an important man. No one was going to turn down his grandson. And anyway, Dick's
father had accounts at Lehman. That's how he got the interview."
Fuld got the job, and was sent to LCPI, which was run by the infamously intimidating
head trader Lew Glucksman.
Glucksman would hurl objects across his office when he was in a bad mood, which was
quite often. Newmark once saw him rip the shirt off his back in anger--and, on another
occasion, throw a 20-pound adding machine. An ex-Naval officer and the son of a lamp
manufacturer, Glucksman was increasingly riled by the fact that his unit was generating
more than half the firm's profits, but his traders were openly derided by the investment
bankers--a well-born, well-educated, and well-groomed elite comprising most of the
firm's 77 partners, and led by CEO Peter G. Peterson. The bankers looked down on the
traders and never paid them as well as they paid their fellow bankers. But as the capital
markets grew, so did trading instruments and the opportunity for Glucksman's division to
make even more money, which only increased the tension within the firm.
Glucksman quickly took a liking to Fuld. "Dick was a very bright guy," recalls Newmark.
"If you were a good trader working for Lew Glucksman, you had it made.
"Lew loved people who would sit with him from 6:30 in the morning till 10:00 at night,"
Newmark says. Glucksman's home life had almost entirely evaporated following a
divorce, so "people who were willing to spend 14, 15 hours" with him "were the ones
who . . . went to the top." Fuld rose quickly under his mentor.
Fuld and Glucksman were in many ways alike. Both were taciturn, ruthlessly competitive
men who swore loudly, and often, in and out of the office. Both thought the most
effective tool for managing a trading floor was fear. Both were swift, instinctive traders-never hampered by details.
According to a Lehman partner, in those early days when Fuld participated in the
morning traders ' meeting, "everyone would say what they wanted 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