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'King of Wall Street' trader John Gutfreund dies at 86
[NEW YORK] John Gutfreund, a onetime "King of Wall Street" and former chief executive officer of Salomon Brothers, has died at the age of 86.
He died of complications from pneumonia at New York-Presbyterian Weill Cornell Medical Center, his youngest son, John Peter Gutfreund, said by telephone.
Mr Gutfreund was dubbed the "King of Wall Street" by Business Week in 1985, as Salomon revolutionised bond trading. The firm played a critical role in creating mortgage-backed securities, among other innovations.
The cigar-smoking financier was immortalised in Michael Lewis's "Liar's Poker," one of the seminal books about Wall Street, written in 1989.
"He was a great manager, but it was a rough and tumble environment and he liked to throw a piece of meat in a cage and see who got it," said Tom Bernard, a former Salomon bond trader described in Liar's Poker as the "Human Piranha."
After joining Salomon Brothers as a trainee in the statistical department earning US$45 per week in the 1950s, Mr Gutfreund rose to head the firm in 1978.
Mr Gutfreund took Salomon Brothers public and earned US$40 million personally, according to Liar's Poker. He was forced out in 1991 due to a Treasury bond trading scandal. Mr Gutfreund earned US$3.1 million in 1986, more than any other Wall Street CEO at the time.
"At any given moment on the trading floor billions of dollars were being risked by bond traders," Mr Lewis wrote in Liar's Poker. "Gutfreund took the pulse of the place by simply wandering around it and asking questions of the traders. An eerie sixth sense guided him to wherever a crisis was unfolding. Gutfreund seemed able to smell money being lost."
In addition to John Peter, Gutfreund is survived by sons Owen, Joshua and Nick, his second wife Susan, and four grandchildren.
The Wall Street Journal first reported Gutfreund's death earlier on Wednesday.