Finance
by James B. Stewart
Who was robbing Wall Street?
During the takeover boom of the 1980s, some of Wall Street's best-paid people were also breaking the law. James B. Stewart, a Wall Street Journal reporter, tells how one insider-trading case led investigators to the next, all the way up to the most powerful financier of the decade.
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Bank Leu's staff had been copying Levine's trades, and the trail led back to him. Levine pleaded guilty and named Ivan Boesky, a takeover speculator who had agreed to pay him for tips. Boesky cooperated too, secretly recording conversations. Each person caught could win leniency by giving up someone bigger.
Martin Siegel, a star takeover banker at Kidder Peabody, sold Boesky tips for cash. A courier would hand over a briefcase of banknotes in the lobby of New York's Plaza Hotel after exchanging a password. Siegel was one of the most admired young bankers of his generation.
In 1986 Boesky told business students at Berkeley that greed was all right, even healthy. Months later he agreed to pay a $100 million penalty and was barred from the securities industry for life. Stewart shows how ordinary that attitude had become in the firms he describes.
Michael Milken ran Drexel's junk-bond business from Beverly Hills and financed many of the decade's corporate raiders. Boesky's evidence led prosecutors to him. In 1990 Milken pleaded guilty to six felonies and was sentenced to ten years in prison. Drexel itself went bankrupt.
Secret tips
Dennis Levine traded on secret merger news through a bank account in the Bahamas, sure no one would notice.
Cash for tips
Martin Siegel passed inside information to Ivan Boesky and was paid for it in cash.
The chain
One arrest led to the next. Levine gave up Boesky, and Boesky wore a wire for the government.
Junk bonds
Michael Milken's junk bonds paid for huge takeovers and made him the most powerful man on Wall Street.
The fall
Milken pleaded guilty to securities crimes, and his firm, Drexel Burnham Lambert, went bankrupt.
A story from the book
Dennis Levine, a takeover banker who ended up at Drexel Burnham Lambert, traded on clients' secrets through a hidden account at Bank Leu in the Bahamas. It unravelled in 1985, when an anonymous letter told Merrill Lynch that two of its brokers in Caracas were trading on inside information.
Hot take · true or myth?
Insiders who helped prosecutors in the scandal walked free.
Myth. Cooperation bought lighter sentences. Levine, Boesky and Siegel all helped prosecutors, and all three still served time in prison.
One thing to try
Find your employer's rules on confidential information and share dealing, and read them once. Then think of one thing you know at work that outsiders don't. That kind of knowledge, used on the stock market, is what Levine turned into millions.
Knotd has the key ideas from 250+ non-fiction books, each in a few minutes, in plain words. Den of Thieves comes with a Hot Take round to make it stick.
Get the whole book on KnotdOpen in the appWho was robbing Wall Street? During the takeover boom of the 1980s, some of Wall Street's best-paid people were also breaking the law. James B. Stewart, a Wall Street Journal reporter, tells how one insider-trading case led investigators to the next, all the way up to the most powerful financier of the decade.
Each one gave up the next; Cash in the Plaza lobby; Greed is healthy; Milken and the junk bonds.
Find your employer's rules on confidential information and share dealing, and read them once. Then think of one thing you know at work that outsiders don't. That kind of knowledge, used on the stock market, is what Levine turned into millions.
Yes. Knotd has the key ideas from Den of Thieves in a few minutes, in plain words, plus a Hot Take round to test them. It's one of 250+ non-fiction books in the app.
