Greed and glory on Wall Street: the fall of the house of Lehman.

• Author: Nocera, Joseph

Greed and Glory on Wall Street: The Fall of the House of Lehman.

A year ago, The New York Times Magazine ran Ken Auletta's gripping, two-part series on the fall of the storied investment banking house, Lehman Brothers Kuhn Loeb. There were many surprising things about the series, not least of which was that it was published in the Times magazine, which over the years has become legendary for getting it last and making it boring. But these stories were everything the typical Times magazine story is not: they were richly detailed, full of fresh and interesting facts, and had a narrative so compelling you could not help but turn the page to find out what happens next.

Everyone who cares about such things knew that Lehman Brothers, for over a hundred years one of the half-dozen most prestigious houses on Wall Street, had serious problems towards the end of its life. Those problems had led finally to Lehman's much-lamented shotgun marriage with the much bigger, but infinitely less prestigious, Shearson/American Express (since renamed Shearson Lehman Brothers) in April 1984. Many of those problems had been alluded to, more or less coyly, in newspaper accounts at the time of the merger of the two firms.

Auletta's series, however, was anything but coy, and that was surprise number two. Most businessmen, investment bankers included, take seriously the ethos of "damage control.' When there are internal problems, you issue a press release that puts the best face on things, and then quickly shift into stiff-upper-lip mode. Oh, maybe a few Hollywood types might blab to a reporter-- Indecent Exposure comes to mind--but most ly, if you have to talk to the press, you dust off your platitudes and duck the hard questions. Auletta not only got the Lehman Brothers principals to talk, he got them to absolutely sing. No pertinent corporate document was denied him. No Lehman Brothers partner or associate turned down his persistent requests for interviews. Many of them sat for multiple interviews and recounted with stunning candor who did what to whom, and what was going through their minds while it was happening. This is especially true of the two central characters of the story, Pete Peterson and Lewis Glucksman, the co-CEOs of Lehman Brothers, whose distaste for each other was the spark that led to the eventual collapse of the house. Precisely because of this astonishing level of candor, the stories were the talk of Wall Street, which eagerly devoured every morsel of delicious, venomous gossip. And they were readily consumed by a large non-Wall Street constituency as well, for they illuminated, to an amazing degree, the ethics and mores of an investment banking house, ethics that revolved largely around-- surprise number three?--simple greed. On second thought, maybe that's not so surprising, though it does make you wonder about the state of things on Wall Street that the participants would fess up to it so readily.

Now comes the inevitable book, baldly titled Greed and Glory on Wall Street,* and the first thing you realize is that while it is a very good piece of work, telling a story that remains absorbing and even important, it is not quite the page-turner the magazine stories were. Investment banking plays a crucial role in American business and always has, and the evolution of that role-- from genteel profession to cutthroat business-- serves as the backdrop for Auletta's story. But somehow some of the high drama that infused the Times articles got diluted when the material was expanded into a book; maybe that's simply because, having read the magazine pieces you already know how the plot will unfold.

* Greed and Glory on Wall Street: The Fall of the House of Lehman. Ken Auletta. Random House, $19.95.

Having said that, however, it must also be said that some of the drama was lost for an altogether admirable reason. At every turn, Auletta refused to hype or distort or otherwise stretch his material in order to heighten the suspense. In the introduction to the book he writes, "I have tried to put together the pieces of the Lehman puzzle without resorting to journalistic shortcuts and the air of omniscience that infects much of the new journalism. At the risk of...