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from Huntington, Long Island, until fights over compensation drove them apart.

Joe Gregory persuaded Tucker and Lessing to go to Fuld and essentially ask for Pettit's

resignation in March 1996. Fuld knew that with Tucker, Lessing, and Gregory behind

him, he finally controlled the firm; he demoted Pettit to head of client relations. The

episode is still called the Ides of March by senior Lehman executives because the

demotion occurred on March 15, the day Julius Caesar was killed by his former friends in

44 B.C.

Six months later, Pettit resigned. Three months after that, he was dead.

With Pettit gone, Fuld was able to tighten his grip on the firm. He took elocution lessons,

and evolved into the leader he had never before been. Lehman's stock soared over the

next ten years as it evolved into an investment bank. The stock price rose to $86, and

Fuld was the hottest CEO in town, featured in a 2006 issue of Fortune magazine as the

man who had transformed the "notoriously fractious" firm into a "super-hot machine."

The chief banger of the drums, the man urging the firm to take more risk, was the man

who had orchestrated the ousting of Pettit--and had replaced him: Joe Gregory, the

second Lehman President.

But inside Lehman's headquarters at 745 Seventh Avenue, people worried that dangerous

corners were being cut in Fuld's haste to beat what he perceived as the enemy: Goldman

Sachs. On June 9, 2008, Lehman reported its second-quarter loss of $2.8 billion, the

company's first quarterly loss since going public in 1994. The stock fell 9 percent that

day. Yet for months, Erin Callan, the new CFO and a Gregory "pet," had been telling the

market that Lehman had plenty of capital--that the company was in good shape.

On June 12, Lehman announced that Joe Gregory was out. When he left, he took Callan

down with him, but the damage they had done was irreversible. Disaster loomed.

For a while Dick Fuld could not see where he had gone wrong. As he later testified

before Congress about the fall of Lehman, "I wake up every single night thinking, 'What

could I have done differently? What could I have said? What should I have done? ' And I

have searched myself every single night. And I come back to this: At the time I made

those decisions, I made those decisions with the information that I had. I can look right at

you and say, this is a pain that will stay with me for the rest of my life. . . ."

This was before he learned that Gregory, who had cashed several hundred million out of

Lehman, asked for a further $233 million from the Lehman estate after the company had

been declared bankrupt plus, according to filings, another employee benefit plan for

$700,000 per year for 25 years at the firm and a further $2.4 million per year for 15 years.

Fuld, who had asked for nothing when the end came, was reportedly horrified. He, like a

handful of others, had deluded himself into thinking that Gregory was a good guy;

Gregory was the guy who told young Lehman managing directors he didn't want to hire

people "who regularly checked their bank balances." Yet Gregory was, in the words of

his former friend and carpooler, Steve Lessing, "a phony."

So, no, this is not yet one more book about the crash of 2008. Rather it is a parable about

the foibles of men, the corrosive influence of money, and the dangers of hubris.

"One firm" was the Lehman Brothers mantra, and most people thought Fuld had dreamed

up the slogan. But he hadn't.

That was the handiwork of Lew Glucksman, who used to stand in his office by the

trading floor and snap a single pencil in front of his employees. He would then hold a

group of pencils together and say, "Watch: When they are together, I can't break them."

The man who embodied that slogan best was not Fuld. It was Chris Pettit, who once, in a

sly tribute to Glucksman and the camaraderie Pettit had instilled at Lehman Brothers,

handed out pencils with all the senior executives' names on them as party favors. He was

the man who once staked