Den of Thieves
Pulitzer-winner's account of Milken, Boesky, Levine and Siegel.
Summary
Stewart, then at the Wall Street Journal, documents the insider trading investigations of the 1980s, following four figures: Ivan Boesky, the arbitrageur; Dennis Levine, the Drexel investment banker who traded on deal information through a Bahamian account; Martin Siegel, the Kidder Peabody takeover specialist who took cash payments from Boesky; and Michael Milken.
The mechanics are documented in detail. Levine traded on information about deals his firm was working on, using an offshore account, and was caught through a bank's tip about suspicious trading patterns. He implicated Boesky, who had been paying Siegel for advance information about takeovers. Boesky then cooperated against Milken, and Stewart documents the arrangement including Boesky's settlement and the notorious payment reconciling the two men's positions.
The prosecutorial material covers Rudolph Giuliani's use of racketeering charges against securities firms, which threatened asset forfeiture and forced settlements, and the tactics used to obtain cooperation. Stewart's framing is that the conduct was straightforward theft, and the book is unambiguous about it.
Milken's supporters have disputed the book's account extensively, arguing that Stewart accepted the prosecution's framing, that Milken's charges concerned technical violations rather than insider trading, and that specific factual claims are wrong. Stewart has defended the reporting. Readers should be aware that the account is contested by informed parties and that Milken received a presidential pardon in 2020. The mechanics of how the information moved and how the investigation proceeded are documented thoroughly.
Key takeaways 8
- Investment bankers traded on information about deals their own firms were working on, using offshore accounts to conceal the pattern.
- Cash payments for advance information about takeovers connected a takeover specialist at one firm to an arbitrageur at another.
- The investigation proceeded by obtaining cooperation from each participant against the next, which is why the sequence of implications matters.
- Racketeering charges against securities firms threatened asset forfeiture and forced settlements before any trial.
- An arbitrageur with advance knowledge of announcements captures the entire spread with no risk, which is what made the information worth paying for.
- Detection came from a bank noticing a trading pattern rather than from any regulatory surveillance system.
- Milken's supporters dispute the book's account extensively and argue that the charges concerned technical violations rather than insider trading.
- Milken received a presidential pardon in 2020, which readers should weigh alongside the account given here.
Who should read it
Readers interested in how information moved through 1980s Wall Street and how the investigations proceeded, aware that the account is contested.
Who recommended it 1 · 1 direct
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