Which investment bank was involved in the 1991 U.S. Treasury bond-trading scandal?

Salomon Brothers was the investment bank involved in the 1991 U.S. Treasury bond-trading scandal.

Several Salomon traders submitted false bids in Treasury securities auctions, allowing the firm to acquire a much larger share of certain issues than regulations permitted. The conduct was uncovered after the bank disclosed the violations to the U.S. Treasury and regulators.

Chairman John Gutfreund resigned, and Warren Buffett, whose Berkshire Hathaway had invested in Salomon, became chairman temporarily to stabilize the firm. Buffett’s response and testimony helped make the episode a major case study in financial management and corporate culture.

The scandal did not involve a collapse like the later failures of Lehman Brothers or Bear Stearns. Salomon survived, but its reputation and independence were damaged. Travelers Group acquired the bank in 1997, and it later became part of Citigroup after the Travelers–Citicorp merger.