In 1991, Tsesarsky received a promotion to head the team that trades government-backed mortgage bonds after a trader got in trouble for rigging bids in Treasury auctions, Beck says. It was at about this time that Tsesarsky first worked with Corbat, then an Atlanta-based bond salesman.

When Sandy Weill’s Travelers Group bought Salomon in 1997, Tsesarsky was tapped to run mortgage trading for the combined company. He’d share the role with Perlowitz, beginning one of the longest-running partnerships on Wall Street. Named to lead the special situations securitization business in 2007, Tsesarsky oversaw Citigroup’s push into film financing, traveling from Colombia to South Korea to evaluate potential investments, says a former colleague.

During those years, Tsesarsky kept the Salomon culture alive for a generation of mortgage traders. That meant being tough on colleagues when they made mistakes and rebuilding their confidence once the lesson was learned, says Finkelstein, one of at least a dozen traders who learned from him and went on to leadership positions in the industry.

Tsesarsky also has a protective side, former colleagues say. According to Finkelstein, nothing was more terrifying than committing Citigroup’s capital as a junior trader under Tsesarsky. “When you make a mistake, you know it,” he says. “You are in the hot seat.” However harrowing the experience, Tsesarsky was always the mentor. “He makes sure you learn from it,” Finkelstein says. “He doesn’t let people fail.”

And even when they lose money, Tsesarsky stands up for them. Former colleagues say he championed Anna Raytcheva, a Bulgarian-born trader who lost billions of dollars during the financial crisis and an additional $50 million in 2011 on bad mortgage bets. (A team run by Raytcheva that used the bank’s money to make bets on government-backed bonds was disbanded in May.)

Tsesarsky and Perlowitz made their own blunders, too. They lost money on a 2004 German mortgage deal and in February 2007 provided a cash infusion to the struggling parent of Ameriquest Mortgage, once the largest U.S. subprime lender. By August, Citigroup had agreed to buy parts of the business.

Ameriquest ran late-night television ads that attracted lower-quality borrowers, and the acquisition was doomed from the start, says Richard Couch, an executive at the time in Citigroup’s corporate mergers-and-acquisitions group. Some executives opposed the plan, code-named Project Adventure, but lacked the power to stop them, according to Couch, who refused to bless the deal’s financials before sending Tsesarsky and Perlowitz to the board. “We wanted nothing to do with this thing,” he says.

Six months later, incoming CEO Vikram Pandit dismantled much of the Ameriquest operation. By then, Tsesarsky was overseeing the CDO business.

Tsesarsky's success in the CDO job—the $2 billion score Corbat, Forese, and other top executives don’t want to talk about—points to Citigroup’s continuing appetite for risk. The bank has more than doubled its derivatives holdings over the past decade, according to regulatory filings, and beefed up commodities trading.

Romero-Apsilos, the Citigroup spokeswoman, says the bank employs “prudent risk-management practices” in its asset-backed securities business. But the secrecy shrouding Tsesarsky’s unit and the history of complicated, structured products on Wall Street raise questions about Corbat’s commitment to making the company safer and more boring.