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Tom Strauss, forty-nine years old, was there to protect Gutfreund’s flank. He had been appointed Salomon’s president five years earlier, during the Great Purge of 1987.1 Responsible for the firm’s international business, he was also charged with the Sisyphean task of licking the perennially lagging equity division into shape. As recent history showed, however, management was not a skill cultivated at Salomon. The warlords reported straight to Gutfreund, to the extent that they reported to anyone at all. Their clout came from their groups’ production of revenues. Strauss might be technically president of Salomon, but he had been promoted so high that he now floated distantly above the trading floor like a helium balloon. Periodically, the warlords batted him out of the way.

Don Feuerstein, the head of Salomon’s legal department, had once played an important role at the SEC and was regarded as an excellent technical lawyer.2 He was Gutfreund’s consigliere, nicknamed POD, the “Prince of Darkness,”3 for the behind-the-scenes dirty work he did. Salomon’s warlords, accustomed to doing whatever the hell they wanted, worked through lawyers who reported to Feuerstein, including Zachary Snow, the assistant general counsel assigned to the trading operations. The warlord structure made the legal department both powerful and weak; it stewarded the firm’s franchise in much the way that everything happened at Salomon: by catering to factions and reacting to events. Salomon’s trading culture had embedded itself so strongly that even Feuerstein was a trader, lovingly operating a wine syndicate on behalf of several managing directors. His fax machine constantly spewed forth notices of wine auctions that were a profitable sideline for the syndicate’s participants, its product more traded and collected than drunk.4

This evening no one was toasting anything, however. Feuerstein knew that Buffett and Gutfreund were friends. He felt awkward giving sensitive information to Buffett when Gutfreund should have been in on the call. Using a set of “talking papers,” he and Strauss told Buffett that “a problem” had arisen. A Wachtell, Lipton investigation had uncovered the fact that Paul Mozer, who ran Salomon’s government-bond department, had broken the Treasury Department’s auction-bidding rules several times in 1990 and 1991. Mozer and his deputy, who was complicit, were now suspended, and the firm was notifying the regulators.

Who the hell is Paul Mozer? Buffett wondered.

Paul Mozer, thirty-six years old, had been swooped up by New York from selling bonds in the Chicago office. He was as intense as a laser beam and started his day before the sun came up, parked in front of a trading screen in his bedroom taking a call from London, then galloped a couple of blocks from his tiny apartment in Battery Park City over to Salomon’s enormous new trading room, housed in the gleaming pink-granite space of 7 World Trade Center. There he stared at another set of screens until past sunset, and oversaw twenty traders, most of whom towered over his short, wiry frame. Mozer was smart and hyper-aggressive, but he also struck people as frustrated and insecure, an odd duck. Although he’d grown up on Long Island, he seemed like a greenhorn from the Midwest among the slick New Yorkers. He had been one of Meriwether’s arbitrage boys until Craig Coats, the head of the government desk, resigned and he was asked to take over. Now he still worked for Meriwether, but was on the outside looking in at his former gang. Gutfreund, who was under pressure from Buffett and the board to improve the numbers, had added the foreign-exchange department to Mozer’s duties; in a few months he had turned a “black hole” around and made it profitable.5 So Gutfreund had reason to be grateful to Mozer.

While Mozer could be abrasive and condescending, as though he considered other people morons compared to himself, those who worked closely with him were fond of him. Unlike