Salomon Brothers
After graduation, Meriwether moved to New York City, where he worked as a bond trader at Salomon Brothers. At Salomon, Meriwether rose to become the head of the domestic fixed income arbitrage group in the early 1980s and vice-chairman of the company in 1988. In 1991, Salomon was caught in a Treasury securities trading scandal perpetrated by a Meriwether subordinate, Paul Mozer. According to Roger Lowenstein's biography of Warren Buffett (at page 378), Mozer reportedly told Meriwether he had submitted a "single false bid" and described his effort to cover it up. Meriwether was "stunned" and inquired, "Is there anything else?" Mozer "lied" and "begged for another chance" according to Lowenstein. Meriwether then "huddled" with Salomon CEO John Gutfreund and Salomon's general counsel. They all agreed the firm should report it to the Treasury Department but nothing happened for four months as the partners, including Gutfreund, "belabored" issues of who should call whom, what to say, and when. Mozer was left at his desk and submitted another false bid, this time resulting in an SEC investigation, Gutfreund's resignation, Buffett's intervention, and (although Lowenstein does not discuss it in this book) Meriwether's $50,000 civil penalty. Meriwether decided to leave Salomon. Three years later he started LTCM, leading to Wall Street's next crisis and Roger Lowenstein's next book.
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