The 12 Most Spectacular Financial Services Failures of All Time
In 1987, weeks after Warren Buffett made a $700 million investment in the bond trading powerhouse Salomon Brothers, the firm disclosed a surprise $70 million write-down from bad bets made by trading junk bonds. In 1991, Salomon was caught up in a bond trading scandal that pushed the firm to the brink of bankruptcy. To protect his investment, Buffett became the chairman of the firm for 9 months. According to the New York Times, he found that every dollar of shareholder equity was supporting $37 of assets -- even higher than the 30-to-1 leverage ratio at Lehman Brothers when it collapsed in 2008. He successfully steered the firm away from bankruptcy. Salomon was sold to Travelers for $9 billion in 1997.