Salomon Brothers
Salomon Brothers was a Wall Street investment bank. Founded in 1910, it remained a partnership until the early 1980s, when it was acquired by the commodity trading firm then known as Phibro Corporation. This proved a "wag the dog" type merger as the parent company became first Phibro-Salomon and then Salomon Inc. and the commodity operations were sold. Eventually Salomon was acquired by Travelers Group (now Citigroup) in the late 1990s.
During its time of greatest prominence in the 1980s, Salomon became noted for its innovation in the bond market, creating the first mortgage backed security. Later, it moved away from traditional investment banking (helping companies raise funds in the capital market and negotiating mergers and acquisitions) to almost exclusively proprietary trading (the buying and selling of stocks, bonds, options, etc. for the profit of the company).
Salomon had an expertise in fixed income trading, betting large amounts of money on certain swings in the bond market on a daily basis. The bond traders called themselves "Big Swinging Dicks", and were the inspiration for the books The Bonfire of the Vanities and Liar's Poker.
In the mid-1990s, Salomon was caught submitting false bids to the U.S. Treasury in a bid to manipulate bond pricing in its favor. It was punished by the largest fine ever levied on an investment bank at the time, weakening it and eventually leading to its acquisition by Travelers Group.
As a result of this scandal, three Salomon executives (Paul Mozer, John Gutfreund, and Thomas Strauss) were banned from ever again working in a securities firm. Another, John Meriwether, was banned for a mere three months — thereafter, he created a hedge fund known as Long Term Capital Management, wherein he had another eventful career trajectory.
At any rate, after the acquisition, the parent company (Travelers, and later Citigroup) proved culturally averse to the volatile profits and losses caused by proprietary trading, instead preferring more slow and steady growth. Salomon suffered a 100 million dollar loss when it incorrectly bet that MCI Communications would merge with Sprint instead of Worldcom. Subsequently, most of its proprietary trading business was disbanded.
For some time after the mergers the combined investment banking operations were known as Salomon Smith Barney, but reorganization has renamed this entity as Citigroup Global Markets Holdings. The Salomon Brothers name, like the Smith Barney name, is now a division and service mark of Citigroup Global Markets.