The Devil’s Casino: Friendship, Betrayal, and the High Stakes Games Played Inside Lehman Brothers – Vicky Ward

“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. . . .”

In The Devil’s Casino: Friendship, Betrayal, and the High Stakes Games Played Inside Lehman Brothers, investigative writer and Vanity Fair contributing editor Vicky Ward takes readers inside Lehman’s highly charged offices. What Ward uncovers is a much bigger story than Lehman losing at the risky game of collateralized debt obligations, swaps, and leverage.

A can’t put it down page turner that opens the world of Wall Street to view unlike any book since Bonfire of the Vanities, except that The Devil’s Casino isn’t fiction.

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.”


“No one expected an institution that was 85 years old and had relied on wholesale funding . . . could just vanish because of a run on the bank,” said a senior Fed official. “Everyone was doing business with them–until they weren’t.”

It’s an excellent read. If you’re looking to do a deep dive into the financial mechanics of Lehman’s collapse, those technical details are probably best found elsewhere (for example, Andrew Ross Sorkin’s Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the FinancialSystem–and Themselves). What Ms. Ward’s book concentrates on instead are the personalities that built Lehman, the growing detachment from reality by the executives who’d left the trading floor and the sense of shock that enveloped the firm leading up to its September 2008 collapse.

The structure of Ward’s book is unique – it’s divided into halves: the Chris Pettit half and the Joe Gregory half. These two men – one COO (Pettit) succeeded by the other (Gregory) in 1996 – form the dual stars of the book. Ward says in her stirring introduction that “Lehman was made great and almost brought down twice in the past thirty years, thanks to these two men. Dick Fuld was pretty much a lieutenant to each.” That statement will come as a surprise to outsiders – it certainly did to this outsider – who assumed that Fuld was master of his domain. But Ward says emphatically that “despite the endlessly self-perpetuated myth of being a mighty gorilla, Fuld was never truly synonymous with Lehman.”

In the weeks following the Lehman bankruptcy, even large blue-chip corporations were getting charged near-usurious interest rates simply to fund day -to-day operations, and innumerable small businesses had their lines of credit pulled altogether. TARP was meant to provide banks with a liquidity cushion that would give them the confidence they needed to start lending again.

The true value of Ward’s book is to inspire enough interest in her readers to dig deeper, to understand better, how things work in our global financial markets, how things get done. I thoroughly recommend it to anyone interested in financial markets.


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