Lawyer turned reporter details Wall Street scandals of the '80s

October 27, 1991|By Jack Seamonds | Jack Seamonds,Knight-Ridder News Service


James B. Stewart.

Simon & Schuster.

477 pages. $25.

7/8 Anybody who followed the Wall Street corruption scandals of the 1980s knows the names Ivan Boesky, Dennis Levine, Michael Milken and Martin Siegel. These were among the bigger trout snared in the net cast by the Securities and Exchange Commission when the river of greed roared through the New York Stock Exchange.

Now, James B. Stewart, a Pulitzer Prize-winning reporter and editor for the Wall Street Journal, has tied this messy, complex and ugly little slice of history into a single book that captures both the context and the color of white-collar crime.

Understanding -- and explaining -- crime within the tightly regulated securities industry is at once a complicated task and a temptation for turgid writing. Thankfully, Mr. Stewart, a former Wall Street lawyer, has avoided taking a white-hot subject and turning it into a dry, instructive tome.

Instead, he has crafted a non-fiction work that, at least for readers interested in business, has the drama of a thriller. We learn how conspirators and chums plotted and manipulated records of illegal, insider transactions, parked hundreds of millions of dollars in overseas bank accounts and amassed enormous wealth in the process.

For example, Dennis Levine, a mere minnow in the government's haul, confessed to $12.6 million in insider trading profits. Ivan Boesky agreed to pay $100 million in forfeitures and penalties, which may have been a fraction of his total take. Milken earned $550 million in a single year and when he finally admitted to six felonies, he agreed to pay $600 million in fines and penalties -- a sum greater than the annual budget of the Securities and Exchange Commission.

In the larger context, the financial piracy on Wall Street also fueled some crippling, destructive merger and acquisition activity that resulted in enormous human suffering. Deals were done solely to enrich investment bankers and their minions, without regard to the long-term damage to some of America's best-known corporations -- Carnation, Beatrice Foods, General Foods, Diamond Shamrock, Union-Carbide, Unocal and a host of others.

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