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November 5th, 2009
07:00 AM ET

Charles Gasparino – 'The Sellout'

From The Sellout
By Charles Gasparino

Chapter One: Fun and Games

Ask Pat Dunlavy to give you the defining moment of his long
career at Salomon Brothers—the point in time when he started
to really understand how the firm and the rest of Wall Street
really works—and he’ll tell you the story about “The Great Race
of 1978.” Dunlavy was thirty years old. He was making a good
living as a bond salesman in Salomon Brothers’ Cleveland
office. His customers were predominantly large pension funds
and other institutional investors in the Midwest that bought and
traded bonds. Because of his position, he had contact with
some of the firm’s power players in New York, including the firm’s
legendary CEO, John Gutfreund, and some of the most savvy bond traders he’d ever met, people such as Lew Ranieri and a brilliant and charismatic trader named John Meriwether, known throughout the firm simply as “J.M.”

The Cleveland office occupied one of the largest buildings in Cleveland, fourteen stories overlooking a decaying downtown of abandoned buildings and steel mills. Like most securities firms, Salomon Brothers had its share of loudmouthed former jocks, particularly at its sales and trading desks. Daniel Benton, a salesman and former high school football player, was one of those (though certainly not the worst bloviator of the bunch). Benton was growing tired of being ribbed about his expanding waistline. At one point he made an officewide announcement. He challenged anyone in the office to a race up the building’s fourteen floors. He said he would wipe the floor with any one of them.

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