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Greed and Glory on Wall Street: The Fall of the House of Lehman by Ken Auletta

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At a Museum of natural history benefit soon after the sale, the wife of a partner asked Ellen Schwarzman, the daughter of a wealthy Ohio manufacturer, “How do you feel?”

“Rich,” she joked.

Her husband Stephen, thirty-seven,* who owned 2,000 shares, pocketed $6.1 million from the transaction. But he was miserable, and in mid-1985 Schwarzman negotiated a financial arrangement with Shearson officials that permitted him to join Peterson in the formation of the Blackstone Group, a new private investment banking firm.

For a relatively modest investment of their own capital—de Saint Phalle says he put up about $150,000 to own about $4 million in shares, before the premium—partners walked away with a princely sum. Because there were two classes of stock—common ...

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