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Shearson Lehman Brothers. - Tearing down the walls: how Sandy Weill fought his way to the top of the financial world-- and then nearly lost it all

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Shearson Lehman Brothers. Tearing down the walls: how Sandy Weill fought his way to the top of the financial world-- and then nearly lost it all

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The very night that Sanford Sandy Weill, the chairman and chief executive officer of Citigroup, was being feted on the floor of the New York Stock Exchange as CEO of the Year, the television screens above the floor were flashing danger: A congressional panel was tearing into Jack Grubman, the $20-million-a-year telecommunications analyst who worked for Sandy. Had Grubman and Citigroup favored corporate clients at the expense of average investors Was Citigroup recommending stocks of troubled companies to get their business The worst scandal of Sandy Weills long career was breaking around him. Here, from its very beginning, is the riveting inside story of how a rough-edged kid from Brooklyn overcame incredible odds and deep-seated prejudice to put together Citigroup, the worlds largest financial empire, and to transform financial services in America -- for better or worse. Tearing Down the Walls provides an unprecedented look at how business and finance are conducted at the highest levels, with extraordinary insight into the character and motivations of powerful men and women. And its the enthralling account of the interplay between power and personality. Sandy Weill, the son of an immigrant dressmaker, is a larger-than-life character, a legendary Wall Street CEO whose innovativeness, opportunism, and even fear drove him from the lowliest job on Wall Street to its most commanding heights. Over a span of five decades he has tangled with -- and usually bested -- some of the most prominent and powerful titans of finance, including the elitist financier John Loeb, the mutual-fund gunslinger and conglomerateur Gerald Tsai, the patrician American Express chairman Jim Robinson, and the cerebral banking visionary John Reed. A consummate deal maker, Sandy Weill amassed and then lost an astounding assemblage of securities firms, only to plunge ahead to rebuild his empire and ultimately create the modern American financial-services supermarket. At the center of Citigroups recent crises, hes the mogul many are waiting to see topple, while many more are trying to figure out how he succeeded. Using nearly five hundred firsthand interviews with key players in his life and career -- including Weill himself -- The Wall Street Journals Monica Langley brilliantly chronicles not only his public persona, but his hidden side: blunt and often crude, yet unpretentious and sometimes disarmingly charming. Tearing Down the Walls reveals Weills tyrannical rages as well as his tearful regrets, the crass stinginess and the unprecedented generosity, the fierce sense of loyalty and the ruthless elimination of potential rivals -- even those he loves. Langley illuminates a climb to the top filled with class conflict -- Jew against WASP, immigrant against Mayflower descendant, entrepreneur against establishment -- and explores the volatile personality that inspires slavish devotion or utter disdain. By highlighting in new and startling detail one mans life in a narrative as richly textured and compelling as a novel, Tearing Down the Walls provides the historical context of the dramatic changes not only in business but also in American society in the last half century. Compulsively readable, it is also essential for understanding the forces that are reshaping the American financial system today.

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A Wall Street Journal Book
Published by Simon & Schuster Inc.
Rockefeller Center
1230 Avenue of the Americas
New York, NY 10020

Copyright 2003 by Monica Langley

All rights reserved, including the right of reproduction in whole or in part in any form.

SIMON & SCHUSTER and colophon are registered trademarks of Simon & Schuster Inc.

The Wall Street Journal and the Wall Street Journal Book colophon are trademarks of Dow Jones & Company, Inc.

Library of Congress Cataloging-in-Publication Data

Langley, Monica.

Tearing down the walls : how Sandy Weill fought his way to the top of the financial worldand then nearly lost it all / Monica Langley.

p. cm.

HG2463.W45L36 2003

332.1092dc21

[B] 2003041091

ISBN-10: 0-7432-3861-3
ISBN-13: 978-0-7432-3861-8

Visit us on the World Wide Web:
http://www.SimonSays.com

To Roger and Langley Grace

Contents
Cast of Characters

Arron, Judith Carnegie Halls executive director from 1986 until her death in 1998, she introduced Sandy to classical music and sat on the boards of Travelers and Citigroup.

Berlind, Roger One of Sandys first partners on Wall Street, he left the business after losing his wife and three of his four children in a plane crash. He became an award-winning producer in his first passion, the theater.

Bialkin, Kenneth A leading securities lawyer, he began representing Sandy in a Wall Street shake-up in 1968 and became his close friend and a longtime corporate director of companies Sandy headed.

Bibliowicz, Jessica Sandys daughter, with her mothers good looks and her fathers ambition, followed her dad into the securities business and caused friction between Sandy and Jamie Dimon, his heir apparent.

Budd, Ed The chairman and CEO of Travelers, as a last resort, sought Sandys help with the troubled insurance giant but found himself out of a job when Sandy bought the entire company.

Buffett, Warren The billionaire investor from Omaha, who stood ready to help Sandy during his final days at American Express, later sold Berkshire Hathaways big stake in Salomon Brothers to Sandy.

Calvano, James Recruited by Sandy to leave Avis for American Express, he later joined Sandy in building his second empire but wisely refused to stay in the same hotel with his boss.

Campbell, William The Philip Morris U.S.A. chairman behind the Marlboro Man campaign, he became John Reeds retail and marketing guru at Citibank and pitched banking as a consumer product.

Carpenter, Michael Given a second chance by Sandy after his ouster from Kidder, Peabody, he ran Citigroups investment-banking and securities business until scandal rocked the firm in 2002.

Carter, Arthur The neighbor with whom Sandy dreamed about starting their own Wall Street firm dominated the fledgling brokerage until Sandy and the other partners rebelled. He later became a millionaire publisher and sculptor.

Cogan, Marshall An early partner on Wall Street whose intense focus on deals helped usher in Wall Streets go-go years in the late 1960s and led to a power struggle with Sandy.

Cohen, Peter The brash financial wizard and operations expert worked tirelessly at Sandys side in building the first securities empire until he decided to escape Sandys shadow.

Collins, Paul Citicorps vice chairman, he was the liaison between Sandy and John Reed in negotiating the blockbuster merger of Travelers and Citicorp.

Dimon, Jamie The golden boy protg, he began working with Sandy straight out of Harvard Business School and was like a son to Sandy until he tangled with Sandys daughter and paid dearly.

Dimon, Theodore Ted Jamies father, he was a hugely successful stockbroker whose family became close friends with the Weills after Sandy took over Shearson in 1974.

Druskin, Robert One of Sandys trusted aides, he held many operations and financial posts in both of Sandys empires.

Falls, Alison Sandys executive assistant, she followed him into exile from American Express and provided key support until he regained his footing with the purchase of Commercial Credit.

Fishman, Jay A zealous cost cutter, he helped turn around Travelers insurance operation but ultimately grew impatient waiting for Sandy to formulate a succession plan.

Ford, Gerald The former president of the United States became a trophy director in Sandys companies, a position that gave him wealth beyond the dreams of many career politicians.

Gerstner, Louis Sandys rival at American Express, he worried that the brazen Shearson crew would tarnish the carefully cultivated image of his green and gold cards. He later became CEO of RJR Nabisco and then IBM.

Glucksman, Lew The tough-talking trader, onetime Lehman Brothers CEO, plotted with Sandy over martinis how to shake up the sleepy and comfortable Smith Barney.

Golub, Harvey Granted his wish by Sandy to run an American Express division, he rose to become the CEO of the credit-card giant. He returned the favor by selling Shearson back to Sandy.

Greenhill, Robert With much fanfare, the star investment banker brought his Morgan Stanley cronies and their fat paychecks to Smith Barney but failed to deliver the M&A business Sandy expected.

Grubman, Jack Sandys controversial $20-million-a-year telecommunications analyst was the darling of the soaring 1990s but was quickly dubbed the villainand posed a threat to Sandywhen it all came crashing down.

Harris, J. Ira A longtime friend of Sandys, the seasoned deal maker shrewdly steered the delicate negotiations of the Primerica acquisition that nearly broke down over jets and golden parachutes.

Jackson, Jesse The civil rights leader developed a mutually beneficial bond with Sandy, forged by their respective encounters with racism and anti-Semitism.

Levitt, Arthur An early partner, he saved Sandy in a firm shake-up but grew frustrated at Sandys claiming exclusive credit for Shearsons huge success. He ultimately became chairman of the Securities and Exchange Commission.

Lipp, Robert The Chemical Bank president joined Sandy in his high-risk comeback and did much of the heavy lifting in the construction of Sandys second financial-services empire.

Loeb, John Snubbing Sandy as an upstart on Wall Street, the proud financier and leader of the Jewish Old Crowd ultimately succumbed to the modern forces taking hold of the financial district and sold his distinguished firm to Sandy.

Magner, Marge Determined to make it in the mans world of finance, she toiled in the bowels of consumer lending and rose to become Citigroups highest-ranking female executive.

Mannes, Barry The head of Sandys least favorite department, the human-resources professional implemented many of his bosss harshest measures to resuscitate bloated and troubled financial companies.

Mark, Reuben The CEO of Colgate-Palmolive, originally on John Reeds board, became the behind-the-scenes advocate for better corporate practices in the Citigroup boardroom.

Maughan, Deryck A dapper Brit who fraternized with Sandy on the Carnegie Hall board, he headed Salomon Brothers until he sold it to Sandy. He then endured the hes in, hes out machinations that were part of Sandys control of Citigroup.

McDermott, Mary From the lowly position of gal Friday in Sandys first firm, she became a public-relations maven for Sandys subsequent empires.

Miller, Heidi Initially an aide to Jamie Dimon at Smith Barney, she rose to become the CFO of Travelers and then Citigroup, bearing the brunt of the conflicting styles of Sandy and John Reed.

Pearson, Andrall The ex-president of PepsiCo and former professor at Harvard Business School, he became a pivotal director in Sandys second empire and a critical voice in the crisis of leadership at Citigroup.

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