Salomon Brothers Investment banking firm founded by Arthur, Percy, and Herbert Salomon in 1910 in New York City. The original firm began as a money broker between brokerage houses and banks on Wall Street and slowly began trading in bonds during World War I. | S Salomon Brothers Investment banking firm founded by Arthur Percy and Herbert Salomon in 1910 in New York City The original firm began as a money broker between brokerage houses and banks on Wall Street and slowly began trading in bonds during World War I. The firm became a primary dealer in Liberty loans during and after the war while it continued to expand its operations in the corporate bond market. The firm became known as Salomon Brothers Hutzler after taking in Morton Hutzler as a partner in the first year of its operations. He owned a seat on the NYSE and became the firm s link to the wider stock business although its primary emphasis remained bonds. It arranged for its first corporate bond underwriting during the Depression but it was not until the late 1950s that its business began to boom. In the 1970s the firm helped develop the market for mortgage-backed securities for the federally related mortgage assistance agencies and became the leader in that burgeoning field. In 1981 it was acquired by commodities trader Phibro formerly Philipp Brothers and became Phibro Salomon. In 1985 Salomon bought out the Phibro stake and again became Salomon Brothers now a publicly traded company. In 1991 Salomon ran afoul of the Federal Reserve and the Treasury because of its behavior at an auction for . Treasury notes when it cornered the market for the issue. The firm received relatively mild sanctions but its management structure was changed with Warren Buffett a major investor helping to reorganize the firm. Although the firm was rebuked it did not lose any of its important Fed designations as a primary dealer in Treasury securities which would have made it difficult to continue in the Treasury bond business. In 1997 Salomon was acquired by the Traveler s Group the insurance company run by Sanford Weill which also owned broker Smith Barney and the two firms were combined to form Salomon Smith Barney. When Traveler s merged with Citibank to form Citigroup a year .
