You thought you knew everything about Lehman Brothers; you thought wrong.

Vicky Ward got hold of the diaries written by the firm’s top executives and unearthed the unexpected bombshell that Dick Fuld was not the leader everyone thought — and much more.

From her unique vantage point as the only person outside Lehman who has the 2002/2003 diaries recorded by Lehman’s senior executives — the major players of the preceding 20 years, documents that were secretly passed to her, investigative writer Vicky Ward reveals the story no one has told in The DEVIL’S CASINO: Friendship, Betrayal, and the High Stakes Games Played Inside Lehman Brothers (Wiley; April 1, 2010; U.S. $27.95).

Ward landed interviews with many previously off-the-record insiders, executives, spouses, and major dealers in the financial industry. Bringing together new information and comprehensive research, she gives us a multi-layered, riveting portrayal of modern Lehman Brothers and its two real leaders; one who brought the small firm roaring to ascendency — and then was brutally betrayed and erased from its corporate history, and another who ruled the firm like Robespierre ruled France — but under a smiling façade while the company crashed and burned.

Lehman lauded itself as “one firm,” a small, diversified unit of fast thinkers who were smart enough and savvy enough to out-deal Goldman Sachs and every other big player on Wall Street. Ward, tapping resources that no one else had reached, has penned an authoritative account of how, far from the widely touted myth, Lehman’s groups were divisive, deadly competitive, risk-blind, and out of control; for the first time, Ward shows us just how fast the corporate stakes were raised and personal cash was flashed.

Rich with fresh anecdotes and the psychological underpinnings that propelled Lehman’s triumphs and demise, The DEVIL’S CASINO is engrossing, revealing, and true, and provides an unprecedented perspective on the how their unexpected and phenomenal success changed good people over time, stretched the boundaries of friendship and ethics, fed backstabbing, destroyed a life, and ultimately brought down America’s oldest investment bank. Ward tells how the Ponderosa Boys – four working class guys (Chris Pettit, Joe Gregory, Steve Lessing and Tom Tucker) — best friends with zero financial expertise, all from the same suburban town on Long Island, with high ideals to “Do the right thing” and determined to rebuild the broken brand, propelled Lehman Commercial Paper into a financial phoenix and resuscitated Lehman.

She lays bare the machinations as three of the Ponderosa boys staged a Machiavellian coup, turning on Chris Pettit, a West Point graduate and Vietnam Army Ranger, whose extraordinary leadership skills were the heart and soul behind Lehman’s rise, and betrayed him at his most vulnerable point — when his brother and his marriage were dying. The episode is still called “The Ides of March” by senior Lehman executives. Three months later Pettit was dead.

With a keen eye for the telling detail, Ward provides an insightful lens into the heart of the Lehman psyche, from its heady Camelot days and its fervor to beat Goldman Sachs regardless of risk or cost, to its blind-eyed trading and its last stand in London, when it was blindsided by the Barclays decision — telling for the first time how hopeless the situation really was. She also takes us into the hearts of the players, to spouses who admit they sold their souls for money, showing the tragic human cost of working at Lehman, the camaraderie that soured to sniping and ended up stripping millions from investors. In The DEVIL’S CASINO, Vicky Ward reveals:

• The Mighty “Gorilla” – Ntwadumela (“he who greets with fire”), CEO Dick Fuld, was “neither a leader nor a dazzling intellect,” but rather for many years was “widely considered as someone who had very little to do with” his employees or his business operations; before dropping the hatchet on Pettit, Fuld asked Gregory and Lessing on the phone, “How am I going to do this again?”:
• Et Tu – The evolution of president Joe Gregory, who morphed from an ordinary emotional hippie and Pettit’s acolyte to his Brutus, a terrifying dictator nicknamed “Uncle Joe” (after Stalin);
• A Scottish Savior – The untold but crucial role of the “Scottish toff” Hon. Peregrine Moncreiffe in saving Lehman’s name and brand;
• Holding on to an Ace – How Lehman managed to survive — when no one thought it could — the Russian crisis in 1998 (Ward found the men behind the save, Todd Jorn and Ming Xu), and the Mexican Peso crisis that began in 1994;
• The Lie of the “Family-First” Culture – On the day her child had suffered a seizure brought on by fever, a Ponderosa wife was forced onto a waiting helicopter to look at the McMansion another Ponderosa couple was building on L.I. — she knew that if she did not board, her husband’s job was at risk; at the mandatory annual summer retreat, Karin Jack, a Ponderosa wife, brought a fake cast to get out of the enforced hike that took place every year; then Niki Gregory showed up with a real broken leg, still planning to climb.
• High Stakes Gamblers in Charge of the Casino – Mortgage-backed securities became the devil’s dice as the housing market grew, and incentives were created for executives to take riskier bets securitizing mortgages, dicing them up and selling them as financial pieces to clients;
• 9/11 – How individual actions and decisions on 9/11 saved employees and the firm, which had three floors of offices in 1WTC; how Ian Lowitt, treasurer of Lehman, secretly re-entered the building for vital computer files;
• The Most Powerful Woman on Wall Street – Erin Callan, prematurely named CFO, was a rookie at the top of an industry in crisis; she became her own worst enemy, and set up to fail, became a scapegoat for the crisis, more played upon than a player;

• Others Around the Table – The roles of Treasury Secretary Hank Paulson, JPMorgan Chase CEO Jamie Dimon, Barclays CEO Bob Diamond, president of the Federal Reserve Bank of New York Tim Geithner, Korea Development Bank CEO Min Euoo-Sung, Bank of America CEO Ken Lewis, and others in the free-falling final days of Lehman.

At the end, after proving themselves and reaching the high rollers table, the four who set out to be the “good guys of Wall Street” were divided, financially broken, or dead. In The DEVIL’S CASINO, Vicky Ward presents a finely shaded portrait of this group that rose with the glory and bravado of Icarus only to descend burning in flames not so much from a sun, but from a match lit from within.