Root Out Corruption on Wall Street? How?

For the past few days I've been looking for the basis of John McCain's assertion that he will "fight corruption" on Wall Street. Sarah Palin took an even harsher line in the debate with Joe Biden, saying she and McCain would “get rid of the greed and corruption on Wall Street.”

Sounds to me like "getting rid of the salt in the oceans" but... whatever. I went to the McCain-Palin website and found nothing. Can someone help me out and point me to specific proposals on how this will be carried out? ProPublica says there there ain't no specific proposals, but I have an open mind.

Barack Obama, for his part, has been flailing away at "eight years of deregulation" under the W. administration. But I think he is being modest. As the New York Times story today on Alan Greenspan (and Wall Street Versus America, I modestly add) point out, deregulation was just as strong under the Clinton administration.

P.S. For the thousands of people who get all their news from this blog: the market collapsed today, and the sky is falling.

© 2008 Gary Weiss. All rights reserved.

Kudos For Wall Street Versus America (and a personal note)

Washington Post personal finance writer Michelle Singletary has some kind words about Wall Street Versus America in her latest syndicated column. announcing that it is the October selection for the Color of Money Book Club.

Not bad for a book that came out two years ago, if I do say so myself.

Her column notes that I've just signed as a contributing editor of Condé Nast Portfolio, for which I've been writing more or less full time for most of this year. I'm excited to be joining this very fine publication.

© 2008 Gary Weiss. All rights reserved.

A Forbes Q&A Worth Reading

..... and not just because the answers were provided by me!

It's on Forbes.com this morning, and can be accessed by clicking here.

© 2006 Gary Weiss. All rights reserved.

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Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site.

Excerpt Available

For the tiny numbers of readers of this blog who haven't read Wall Street Versus America, an excerpt appears in the latest issue of the Across the Board, which is published by the Conference Board and is a very fancy mag. Don't bother clicking on the link, though. The website is an issue out of date.

© 2006 Gary Weiss. All rights reserved.

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Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site.

Epilogue to a Nightmare

I begin and end Wall Street Versus America by recounting the story of Rand Groves, an entrepreneur from New Jersey whose portfolio was destroyed in the technology bust, and who was ripped to shreds when he brought a claim against his broker before an NASD arbitration panel.

Groves's plight is typical of the stacked deck investors when they have a beef against a broker. Even though the broker in the Groves case apparently fabricated evidence, which would have serious consequences in a court case, the NASD arbitrators couldn't have cared less. Groves lost his case, and a subsequent appeal went down the tubes despite the loss of a crucial tape of the proceedings.

Well, I've learned that the case was recently tossed out again by a New Jersey appellate court. That was hardly surprising, because it is almost impossible to to overturn a securities industry arbitration on appeal.

I understand that state regulators are looking at the entire securities arbitration system. I hope so, because the Securities and Exchange Commission couldn't care less.

© 2006 Gary Weiss. All rights reserved.

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Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site.

Kudo Roundup Time

I hate to admit it -- it pains me to have to say this -- but Wall Street Versus America has received all kinds of great notices, and it has been just two days after pub date!

Apart from the New York Times, Houston Chronicle, Publishers Weekly and New York Post kudos that came in between January and early this week, I've gotten awfully nice reviews from Knight Ridder Newspapers (see this pickup in the Newark Star-Ledger), Corporate Crime Reporter, Joe Mysak in Bloomberg and, last but not least, veteran financial journalist Don Bauder, writing in the SanDiegoReader.com.

Knight Ridder's Cecil Johnson calls WSVA a "provocative and insightful assault on Wall Street," and points out that my solution is not more (usually ineffective) regulation. Said Johnson: "This book is essential reading for anyone who has money to invest but doesn't have any to throw around foolishly. It is the kind of book that might make you angry while you're reading it, if it were not spiced with acerbic wit and skillfully applied satirical understatement."

Corporate Crime Reporter, a leading authority on white-collar crime, said as follows:

It’s not the same old recitation of corporate and Wall Street crimes that have bored generations of business school students taking their required ethics courses.

While it purports to be about Wall Street, it is in fact a biting critique of the elites that populate the Wall Street firms, regulatory agencies, law firms, and newsrooms across America.

Weiss spent 18 years as a reporter at Business Week. But he never wrote with this point of view and intensity.

The praise from Don Bauder was particularly gratifying. Don recently retired after many years with the San Diego Union-Tribune, and is one of the most respected financial journalists in the country.

Don focused on my excoriation of ex-SEC chairman Arthur Levitt (who apparently has gotten a nice gig in San Diego), and concluded: "Weiss's book is relevant to your pocketbook and to San Diego. Read it."

Corporate Crime Reporter's review, written from a different perspective, had the same conclusion: "Read this book."

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Wall Street Versus America will be published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site.

A Times Review? Moi?

I'm still reeling from the experience of the generous review in the New York Times this morning. At left is a depiction of how I appeared this morning, as captured by cellphone camera. "Highly illuminating"? Aw, shucks.

As you can see from the review, Wall Street Versus America doesn't pull any punches! Another important point, which I'm glad was emphasized in the review, is that this book is for a general reader, even though I deal with complicated subjects.

In fact, one person who interviewed me recently for another publication noted something to the effect that "this sure isn't what you wrote for Business Week," which I think he meant in a positive way. Actually in the Acknowledgments I point out that the guiding spirits behind the book, whether they like it or not, were the two BW editors who ran the magazine's Wall Street coverage through 2001.

As SABEW's Talking Biz News blog points out today, the good and, mainly, bad traits of the financial press are dealt with throughout the book.

The Times review concludes by opining that this book may "provoke change" -- and hopefully it will be real change and change for the better, in contrast to so much of what has emerged from Wall Street regulators in recent years.


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Wall Street Versus America will be published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site.

Early Kudo etc. etc. etc.

The first general-circulation review of Wall Street Versus America has come out (a bit, ahem, early) -- and it is a rave from the Houston Chronicle. Here is a link.

Golly. "Erudite and savagely funny." Very nice. True, but nice.

I've been blogging a bit less than usual because of the press of other business, including this op-ed piece that ran in the New York Times on Saturday. Bear Stearns was recently the subject of a $250 million fine that was, as I describe, chump change.

Meanwhile, I see that there has been a lot of activity on the short-selling-subpoena-baloney-Overstock-Biovail-etc.-etc.-etc. front, including a report on 60 Minutes on Biovail's lawsuit against a hedge fund and independent research firm. It was a straightforward account, and it had nothing to do with the nonexistent "naked short selling" scandal, so naturally it was immediately proclaimed as a major public relations victory by the Baloney Brigade.

Oddly, a Dateline NBC segment last August, though sympathetic to the balonies, was vilified by these same knuckleheads. Logic has never been their strong point.

Lesley Stahl said something to the effect that this segment should interest every small investor with an IRA or 401k. I agree. If the CEO of a company you own goes on a crusade against short-sellers, dump the stock immediately.

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Wall Street Versus America will be published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site.

Dick Grasso and the Constitution

The Wall Street Journal and Washington Post reported yesterday that Dick Grasso is getting some more bad publicity. Oh my. Seems he cited his Fifth Amendment right against self-incrimination during an SEC investigation into alleged trading improprieties at the New York Stock Exchange several years ago.

Now, what in heaven's name is the relevancy of this? After all, Grasso was never charged by the SEC or anything like that. Also, as one SEC Law blog points out, "taking the Fifth" could mean a variety of things other than "I'm hiding something."

So dragging Grasso's name through the mud over this seems to be overreaching at best. What makes it worse is that it's being done to make a "point." Which is that Grasso's not answering those question somehow indicates whether or not he was a "good market regulator" and thus maybe should pay back some of the bucks he received.

I'm serious. There are people out there who really think -- or at least say with a straight face -- that Grasso was paid $140 million to keep NYSE floor traders in line!

Is that or is that not the funniest thing you've ever heard?

The Post quoted a Spitzer deputy as saying: "The question here is whether the compensation [Grasso] received was reasonable. The stock exchange is first and foremost a regulator. . . He was questioned about his performance of his regulatory role." [Emphasis added.]

I placed one of the sentences in italics because it captuires one of the many misconceptions about the NYSE. The Big Board's principal function, as I describe in Wall Street Versus America, is self-perpetuation for the benefit of its members.

Dick did an outstanding job in that capacity, so I really wish they'd leave the man alone.

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Wall Street Versus America will be published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site.

'A DEVASTATING BROADSIDE': That's the verdict of Publisher's Weekly ("Weiss's wise-guy attitude and muckraking chops make for a devastating broadside"), in a rave review of Wall Street Versus America that came out this weekend. I've posted an excerpt on my website. (God forbid I should use this blog to sell the book. Perish the thought!)

Enthusiastic as this review surely was, I'd say that the instantaneous revulsion of the scammer community at the very idea of the book, before they even read it, is almost as enthusiastic an endorsement.

EXCERPT AVAILABLE: I've redesigned my website, and posted the Introduction from the book. You can find it here. The Introduction is available as a PDF file.

Among other things, my website makes note of the Baloney Brigade's hysterical reaction to this book -- which is, I guess, probably the best endorsement I could find. Since the pump-and-dump scam artists hate this book -- and they haven't even read one word of it -- you have got to figure that Wall Street Versus America is on the right track. One posted an entire "essay" on how wrong I was, based on one paragraph in the New York Post! That's how terrified these people are that their phony non-scandal is going to be dissected.

I'm hoping that this book will knock some sense into a regulatory community that has long been cowed by these loathsome con artists -- one of whom is a con man who goes by the phony name "Bob O'Brien," and bravely posts libelous attacks on the Internet while cowering behind that phony identity. "Bob" goes to great lengths to avoid being identified. However, my guess would be that he or she is a semiretired pump-and-dump scam artist.

It would be particularly gratifying if the North American Securities Administrators Assn., which has long been in the forefront of investor protection, finally sees these creeps for the snake-oil salesmen that they are, and moves on to genuine investor issues.

The Baloney Brigade is going to be disappointed by the Introduction -- because their crusade, fraudulent as it is, was not significant enough to be mentioned.

KIND WORDS: I see that there's a flattering appraisal of Wall Street Versus America in the New York Post today. I know this is shameless self-promotion, but I'm copying it in full below:

"A new book by ace investigative reporter Gary Weiss, a longtime BusinessWeek staffer, is guaranteed to be a front-runner for most controversial business book of 2006, according to The Post's Roddy Boyd. The book, "Wall Street Versus America," won't hit the stands until early April, but his arguments — gleaned from two decades worth of reporting on Wall Street — are sure to provoke outrage in many sectors.

"The most provocative argument in Weiss' book is that naked shorting — or short-selling a company's stock without being able to borrow it first, per long standing rules — is not only a good idea, but a necessary one.

"Weiss argues that the indifference of regulators toward small-cap stocks has promoted a lawless Wild West dominated by stock promoters and sleazy underwriters. The only remedy against such "bacteria" is to short these stocks mercilessly.

"This is guaranteed to send Overstock CEO Patrick Byrne and the other disciples of his "stop naked short-selling crusade" — Weiss dismisses the lot of them as the "Baloney Brigade" — into further spasms.

"The book is witty, readable and hunts big prey: Weiss spends a chapter filleting Bear Stearns for its sins in some preposterous municipal securities transactions. His eyeglass spares no one, and financial reporters come in for special mention for their sins of omission, as they focus on the machinations in the Morgan Stanley executive suite while ordinary investors are robbed blind by scams that continue to this day."