Library:Den of Thieves
| Den of Thieves | |
|---|---|
| Author | James B. Stewart |
| First published | 1991 |
| ISBN | 978-0-671-63802-3 unverified |
| Role | Analysis |
| Domains | Business, Finance & Scams Crime & Public Safety |
| Tactics | Fraud or Scam |
Den of Thieves is a 1991 book by James B. Stewart.
Summary
James B. Stewart, a former lawyer who won a Pulitzer Prize in 1988 for his reporting in The Wall Street Journal on the stock market crash and insider trading, wrote this account of the insider trading scandals that shook Wall Street in the 1980s. It follows a network of bankers, traders and lawyers who traded on confidential information about corporate takeovers, and the investigators who brought them down. The book became a bestseller and remains a definitive account of the era's financial crimes.
The ring
The story begins with Dennis Levine, an investment banker at Drexel Burnham Lambert who used secret offshore accounts to trade on inside information about upcoming mergers. When investigators caught Levine in 1986, he cooperated and implicated Ivan Boesky, a celebrated arbitrageur who bet on takeover targets. Boesky had paid for inside tips, including from Martin Siegel, an investment banker at Kidder Peabody. In a speech at the University of California, Berkeley, in 1986, Boesky had told students that greed was healthy, a line that later echoed in the film Wall Street.
Michael Milken
Boesky's cooperation led investigators toward Michael Milken, the head of Drexel's high-yield bond department, who had built the market for "junk bonds" that financed many takeovers of the era and earned hundreds of millions of dollars a year. Stewart describes Milken's power and the network of relationships around him. In 1990 Milken pleaded guilty to six felonies related to securities violations, paid about $600 million in fines and settlements, and was sentenced to ten years in prison, serving less than two. Drexel pleaded guilty to securities fraud and went bankrupt in 1990. Milken received a presidential pardon in 2020.
The investigators
Stewart also follows the prosecutors and regulators, including the US Attorney's office in Manhattan under Rudolph Giuliani and investigators at the Securities and Exchange Commission, who unraveled the scheme, sometimes using aggressive tactics that critics questioned.
Relevance to Bullshitopedia
Den of Thieves shows how a market celebrated for its efficiency and innovation was distorted by people with secret information, and how reputations for genius can hide misconduct. It is a reminder that spectacular trading success can sometimes have a simple, illegal explanation.
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