Gutfreund down, but far from out Salomon executive can make comeback


NEW YORK -- John H. Gutfreund's large desk on Salomon Brothers' vast trading floor, the desk that once could claim to be the vortex of Wall Street, is now the property of an English non-trader, Deryck Maughan.

The chauffeur that took Mr. Gutfreund to work at dawn is gone, as is the $2.3 million annual salary, as is the evening social life that he once complained dragged him off to three or four balls a week. The public relations office at Salomon says the firm's former chief executive left no forwarding number, nor has he been in contact with his former colleagues since Aug. 18 when he resigned under pressure in an emergency meet ing of the firm's board.

Mr. Gutfreund, 61, himself isn't talking to the public and his law firm, Howard, Darby & Levin, will say only it has "no need to discuss the matter in question."

So ends a spectacular and extraordinarily visible 38-year run that took a clerk in the statistics department of a second-rate bond house to the top of Wall Street. In a few months, moves by two traders at Salomon's government securities desk to corner illicitly a tiny nook of the $2.3 trillion Treasuries market exploded into a scandal that cost Mr. Gutfreund what innumerable prior internal corporate battles and market tremors could not -- his job.

Speculation, and sniping, on Mr. Gutfreund's future is rife, fueled not only by the depth of the plunge, but by the numerous egos and bodies he elbowed, and punctured, on the way to the top. Assuming that Fifth Avenue, his primary address, has become too hot, he was rumored to have left for his second residence, a spectacular home in Paris.

Yesterday, the gossip item du jour suggested he was shopping for a residence in suburban Tuxedo Park, a community, ironically, that once shunned aggressive Wall Street financiers like Mr. Gutfreund. Several extensive magazine articles on the fall of the man labeled only a few years ago as "The King of Wall Street" are in the works.

But news of Mr. Gutfreund's exile may be premature. On Saturday, he could be seen walking up Madison Avenue on the Upper East Side, trademark cigar in place, along with his young son, another vaguely anonymous pair in royal blue polo shirts in the vast New York crowd.

Gossip columnists suggest a comeback into New York society, which he and his second wife Susan ardently, if errantly, courted, may be unfeasible. He remains wealthy, however, with $32 million in Salomon stock -- his primary investment -- and if spared criminal indictment, the world of finance may be amenable to his return.

Samuel Hayes, a professor of investment banking at Harvard, noted that few tears were shed on Wall Street when another tough trader, Lewis Glucksman, was deposed at Lehman Brothers in 1984, in a general management upheaval after the sale of the firm.

Yet Mr. Glucksman has been resurrected. He is currently a vice chairman at Smith Barney, in charge of its seminal corporate finance operations.

Other financiers, bounced out of their perches in recent years through tiffs, failures, consolidations and even criminal charges, have lately been making a comeback.

Small investment companies have been started by two other former heads of Lehman Brothers, as well as the former head of Morgan Stanley. Even Ivan Boesky, the notorious inside trader, is said to have begun building a new firm in London.

"He [Mr. Gutfreund] is certainly a talented guy," said Arthur Levitt, former head of the American Stock Exchange. "If he is interested in pursuing a career in financial services, I'm sure there will be opportunities for him to take advantage of."

A major imponderable is the damage stemming from the recent intense negative publicity, Mr. Levitt noted. Publicity, though, has played only a tangential role on Mr. Gutfreund's life. For decades he, like many other prominent men on Wall Street, successfully avoiding the limelight.

Indeed, it was only after his marriage in 1981 to Susan Penn, a former stewardess with social ambition, that he emerged from a tightly cloistered world of finance to attend balls and, in the past three years, to speak out on industry issues.

Vartan Gregorian, the former director of the New York Public Library who is now president of Brown University, said Mr. Gutfreund had been a major benefactor of the library for almost three decades but, unlike other social families gracing the pediment, even in good times Mr. Gutfreund deliberately obscured his presence.

"You will never see anything named after him," Mr. Gregorian said. "He never insisted on public thanks. He would feel awkward."

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