March 26 (Bloomberg) -- When a former Lazard Freres & Co. banker returns to his roots as a journalist, he leaves no skeleton (or mistress) unturned.

William D. Cohan mixes investigative zeal with inside knowledge and an ear for storytelling to produce ``The Last Tycoons,'' an exhaustive history of the enigmatic investment- banking house now called Lazard Ltd.

A former reporter who spent six years at Lazard, Cohan follows every lead and whisper, digs through secret records, conducts more than 100 interviews, and makes legendary Lazard partner Felix Rohatyn squirm over matters ranging from an extramarital affair to a criminal grand jury. Then Cohan weaves his findings into multiple plot lines punctuated by sex, betrayal, Cuban cigars and one particularly lurid murder.

Cohan's canvas is vast, taking in a Czech rogue trader who almost gutted the firm in 1931; wartime dashes across Europe and North Africa to escape the Nazis; Rohatyn's role in Harold Geneen's voracious acquisition spree in the 1960s and '70s at what is now ITT Corp.; and an admission from Michel David-Weill that he may have cut a bad deal as Lazard chairman in selling Bruce Wasserstein a 1 percent stake for about $30 million. At the time, the media reported Wasserstein had invested $100 million to $200 million in Lazard, Cohan recalls.

``Maybe I should have forced him to put in $100 million to $150 million,'' David-Weill, who gave Wasserstein an additional 7 percent stake for free, is quoted as saying. By December 2006, that stake was worth about $560 million, reports Cohan, who says Wasserstein declined to talk to him.

Power and Sex

Power, greed and licentiousness permeate this book. Cohan dishes out tales of indiscretions, such as the day in the 1970s when Lazard partner Andre Meyer ``knocked briskly'' on Rohatyn's locked door and yelled, ``Felix, why don't you go to a hotel room like the rest of my partners!''

We read, too, of Rohatyn's long extramarital affair with photographer Helene Gaillet de Barcza, now Helene Gaillet de Neergaard, who confirmed in an e-mail exchange with me that the affair lasted from 1968 to 1976, during which she and Rohatyn lived together for five years in the penthouse of the Alrae Hotel in New York. Rohatyn, who is reported to have obtained a galley of Cohan's book, declined to comment.

Far more shocking was the murder in 2005 of Edouard Stern, a former Lazard banker found shot dead in his Geneva apartment wearing a flesh-colored latex suit used for sexual activities. He and his French lover, who confessed to the killing, had fought over a $1 million bank account that Stern had frozen, according to Cohan and media reports at the time.

Misogynous Streak?

As gossipy as these revelations get, Cohan has a serious point. Senior partners, he says, had a ``European,'' misogynous attitude toward women that trickled down at Lazard. The first women bankers at the firm were propositioned, groped, demeaned and, in one reported case, raped by two bankers who were then eased out of the firm, though not prosecuted, he writes.

At the heart of this book stands Rohatyn, who as a boy fled Paris with his mother in May 1940 (legendarily with gold coins hidden in tubes of toothpaste) and eventually made it to New York in 1942. He would go on to become what Cohan calls the ``Le Corbusier'' of mergers and acquisitions in the second half of the 20th century. He helped save New York City from bankruptcy in the 1970s and became, during the Clinton administration, the U.S. ambassador to France.

Grand Jury

On his way up, Rohatyn found himself embroiled in a controversy surrounding ITT's hostile bid for Hartford Fire Insurance Co. in 1968. This deal drew investigations from the U.S. Justice Department, the Internal Revenue Service and the Securities and Exchange Commission.

Though the matter was ``once and for all resolved in 1981,'' Cohan reports that Rohatyn at one point became the target of a criminal grand jury investigation connected to his role in the ITT-Hartford deal.

Rohatyn ``adamantly and repeatedly denied having any recollection'' of this, Cohan writes. ``I'm not denying that it happened,'' Rohatyn is quoted as saying. ``I'm just telling you that I have absolutely no recollection.''

Because Rohatyn refused to become the firm's manager in the late 1970s, David-Weill took charge. Cohan calls David-Weill the Sun King: ``He alone set the all-cash compensation levels of his partners through an annual, almost medieval, bloodletting that involved his partners' post-Labor Day pilgrimage to his corner office to plead, on bended knee, for an appropriately robust amount of succor.''

Enter Wasserstein

As the 1980s became the roaring '90s, a leadership struggle raged among David-Weill, Rohatyn and two younger men, Steven Rattner and William Loomis. When leaner times came in 2001, Lazard was a divided house with no clear successor. That opened the door for Wasserstein to grab control and take the firm public.

After mercilessly dissecting the old Lazard, Cohan becomes curiously nostalgic for it in his closing remarks. Under Wasserstein, he argues, Lazard is ``a far more secretive and enigmatic place than it ever was under Michel, the Sun King.'' Sounds like grist for a sequel called ``The New Tycoons.''

``The Last Tycoons'' is from Doubleday (742 pages, $29.95).

(James Pressley writes for Bloomberg News. The opinions expressed are his own.)

To contact the writer of this review: James Pressley in Brussels at jpressley@bloomberg.net.

Last Updated: March 26, 2007 04:50 EDT