By August 1991, Warren Buffett’s investment company, Berkshire Hathaway, had held a large stake in Wall Street investment bank Salomon Brothers for about four years – he had helped to rescue Salomon from the attentions of the corporate raider Ronald Perelman in 1987 by investing $700m. The deal made Buffett a leading figure on Wall Street, whose excess and supposed corruption he abhorred.

On August 8, Buffett was informed of a potentially ruinous scandal at Salomon, in which Paul Mozer, who headed the government bond department, had secretly manipulated US Treasury bond auctions. Salomon – with $4bn of equity supporting $146bn of debt – faced possible indictment and sanctions from financial regulators that would almost certainly lead to a run on the bank. Buffett helped to orchestrate a change in management and agreed to take over as interim chairman to try to steer Salomon through the crisis