Word: trader
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...skeptics still doubt that the 1980s were an era of mindless greed on Wall Street, Dennis Levine's account of his rise and fall as an inside trader should set them straight. Levine, a megadeal meister for the now bankrupt Wall Street firm Drexel Burnham Lambert, raked in more than $10 million through the simple expedient of buying and selling stock with the help of inside tips. Arrested in 1986 and jailed for 17 months in a minimum-security prison, he led prosecutors to arbitrager Ivan Boesky, who, in turn, helped them reel in the biggest fish of all -- junk...
Still, Salomon is plagued by the sins of its past. Last week it was disclosed that Paul Mozer, the bond trader said to have arranged the illegal trades in Treasury bills and bonds that initially got the firm into trouble, had sold 46,000 shares -- or about $1.7 million -- of Salomon stock before the scandal went public. The timing of the sell-off is crucial; Mozer could be charged with violating insider-trading regulations. Through his attorney, Mozer denies that he "sold the shares based on insider information" but also says he is willing to rescind the sale. Salomon...
Buffett's internal reforms, announced shortly after he and Maughan took up their posts, could cost Salomon some of its high-flying bond traders, who could bolt from the firm once they receive this year's bonuses. If individual bonuses are decoupled from the performance of business units in order to eliminate the motivation for overly aggressive trading, some traders may jump ship. Says a former Salomon trader: "People who have had deals like that know they can get them someplace else...
...resignation of Gutfreund puts an end to one of Wall Street's most fabled careers. A gruff-talking, cigar-chomping bond trader, Gutfreund became chairman of Salomon in 1978. According to Liar's Poker, a 1989 best seller by Michael Lewis that described Salomon as a sort of financial Animal House, Gutfreund exhorted traders to come to work each morning "ready to bite the ass off a bear." When the traders were not executing centimillion-dollar deals, they delighted in such pranks as dumping garbage on one another's desks and replacing the contents of a male colleague's suitcase...
Ironically, it was a practical joke gone awry that helped bring Salomon down. In an elaborate form of hazing, Mozer reportedly persuaded a Salomon customer last February to submit a bogus $1 billion order for 30-year Treasury bonds. The idea was to shock the novice trader who received the order. But the prank backfired: the deal went through, and the unauthorized purchase landed on Salomon's books...