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deeply unpleasant bunch of people.

--Ken Auletta (2009), author of Greed and Glory on Wall Street: The Fall of the House of

Lehman (1986)

When I started researching this book, I thought I'd be telling the lurid story of the final

few months of America's fourth-largest investment house, Lehman Brothers, which was

almost 160 years old when it gasped its last breath on September 15, 2008.

When it filed for bankruptcy, credit markets around the world trembled, and U.S.

Treasury Secretary Henry Paulson Jr. and Federal Reserve Chairman Ben S. Bernanke

realized with terror that they were facing the worst economic catastrophe since the Great

Depression of the 1930s.

I thought I would simply be telling the dramatic story behind that harrowing moment,

viewing Lehman's history through the lens of Paulson, Bernanke, and Lehman's chairman

and CEO, Richard S. "Dick" Fuld, who held his position for nearly 15 years, and once

joked--during better times, when Lehman stock rose to its all -time high--that "they' ll be

carrying me out of here feet first." And they almost did.

What I had failed to realize until I dug far deeper into the annals of Lehman's history was

that the drama of the ending was no match for the saga of its life. The story of the 160 year-old firm up until 1984 had been well-chronicled (in particular, by Ken Auletta in

Greed and Glory on Wall Street: The Fall of the House of Lehman). But what happened

to it in those crucial intervening years--from 1984 until 2008--had not.

Ironically, Lehman had tried to tell this story itself, and failed. In 2003, Joseph M. "Joe"

Gregory, the firm's president, asked the chief players of the preceding 20 years (among

them himself, Steve Lessing, Jeff Vanderbeek, John Cecil, and Paul Cohen) to each give

their accounts in the hope of compiling "The Modern History" of Lehman. He gave up

after fifty pages. But in one of those rare, extraordinary gifts that biographers pray for,

those fifty pages--and, more important, the many pages written by each individual--were

handed to me by a source to whom I am forever deeply indebted.

"The Modern History" opened in 1994 as Lehman gets spun out of American Express and

Dick Fuld, the new CEO, stood in front of a cascade of balloons in the Winter Garden,

the party space in the World Financial Center, across the street from the World Trade

Center towers in the heart of Wall Street. Fuld proudly proclaimed: "It's a new day. We

have the opportunity to create our own destiny, and I need you to do it."

There is talk among the senior executives about the "remarkable will of Lehman

Brothers," and the "nonnegotiable values of the Lehman culture," which include

"integrity, strength of character, open communication, loyalty, and teamwork." The

unfinished manuscript discusses rating these values above the more superficial

inclinations of Wall Street: Valuing spirit over education, for example, makes Lehman a

"special place to work." The firm was small but the employees were united. They were,

they proudly proclaimed again and again, "one firm." The Lehman mantra was "Do the

right thing." They were the good guys of Wall Street.

But were they?

There's a reason "The Modern History " was never finished; the individual contributions-like journal entries--make it clear what happened to the project. And former CFO John

Cecil confirmed my suspicions.

As Joe Gregory poured through the "diaries," he realized that there were two major

problems. One was that the portrait being painted of Dick Fuld, the leader of the firm,

was negative--he was not the great general that Gregory wanted him to be, but a man who

either was invisible or needed to be told what to do by a stronger subordinate. The second

was that the accounts were so different from one another that they could scarcely be said

to represent a united front, the "one firm" ethos.

So the project was abandoned, waiting until someone wanted to write a history of the way

things had actually been at Lehman, without