Originally published at: https://blog.12min.com/den-of-thieves-summary/
Greed Is Good
James B. Stewart’s “Den of Thieves” reads like a novel. For better or for worse, it’s not. It’s a nonfiction story about the depths of human greed.
And you’ll enjoy its summary.
About James B. StewartJames B. Stewart is a former editor of “The Wall Street Journal” and a Pulitzer Prize-winning journalist for his articles on the insider trading scandal of 1987. “Den of Thieves” is based on them. He has also authored few other bestselling books, such as “The Partners” and “DisneyWar.”
"Den of Thieves Summary"You have watched “The Wolf of Wall Street,” right?
Well, a quarter of a century before it, “Wall Street” made the rounds from one corner to the other of the globe. Directed by Oliver Stone, the film is a story about the ethical decline of a young stockbroker (Charlie Sheen) who is taken under the wing by an unscrupulous corporate raider.
And this guy, played by Michael Douglas, is called Gordon Gekko.
And he was voted the 24th greatest movie villain of all time.
It’s not so much strange that he is ahead of Dracula or “Shining’s” Jack Torrance. Nor is it that strange that Michael Douglas modeled his performance after then-businessman and now-president Donald Trump.
The really weird thing is that he is based on real-life characters. In fact, he is a composite of at least six people.
And James B. Stewart’s phenomenal “Den of Thieves” is about four of them: Dennis Levine, Michael Milken, Martin Siegel, and Ivan Boesky.
In fact, probably the most famous scene of the film, according to a “New York Times” article from the last day of 1987, is an almost verbatim reenactment of an Ivan Boesky speech.
And few of those lines are a fairly good summary of this book:
“The point is, ladies and gentlemen, that greed, for lack of a better word, is good. Greed is right. Greed works.”
Well, Levine, Milken, Siegel, and Boesky believed wholeheartedly in this dictum. And during the 1980s, they pulled off the biggest illegal money swoop in recent memory.
By creating the largest insider-trading ring in financial history. And they were so good at it that they almost walked away from it unscathed. What stopped them was a team of detectives perfect for a neo-noir film. And, really, “Den of Thieves” has all the atmosphere and thriller-like qualities of one.
Not to mention the dark side of the human nature.
The scandal started unraveling with a relatively obscure investor, Denis Levine. He had built a network of insiders whom he paid in exchange for information. He made almost $10.6 million! Unfortunately for him, the officials working at the bank where he kept his money – the Swiss Bank Leu – noticed that he traded on insider information.
So, they piggybacked, i.e., they copied the transactions for their own accounts. They used a broker who piggybacked himself. Merrill Lynch detected the plot and forwarded it to the U.S. Securities and Exchange Commission (SEC).
Levine fell first, but he didn’t want to go down by himself.
Boesky had made a fortune of almost $200 million by betting on probable takeovers! He was investigated by SEC and, soon enough, it became fairly obvious that his prophecies were also based on insider tips.
Boesky made an agreement with SEC and then little-known lawyer Rudy Giuliani. In exchange for a 3½ prison sentence and a $100 million fine, he informed on several others.
Among them, the last one of the four, the very epitome of the time and the age: Michael Milken. Called “the Junk-Bond King” he paid himself a bonus of half a billion dollars in 1985 alone!
And that was the very fine he had to pay after being convicted.
But, don’t worry about him: he’s still one of the 500 richest people alive.
Key Lessons from “Den of Thieves”1. The Insider Trading Scandal Unraveled Because Everybody Wanted on It 2. Greed Is a Bottomless Pit… 3. …and Nothing Ever Changes
The Insider Trading Scandal Unraveled Because Everybody Wanted on ItIn the 1980s, corporate America was shocked to learn of a scandal of gargantuan proportions. Almost everyone who meant something on Wall Street was in it: insider trading. It ended up with Michael Milken, the Junk Bond King, paying a fine of more than half a billion dollars.
And you know how it all unraveled?
Because of piggybacking: everybody wanted in.
Greed Is a Bottomless Pit…And everybody wanted in. Because everybody wanted a piece of the cake. And it was bound to happen eventually: some weren’t as good at keeping secrets, and some weren’t that bad to not report them. However, the fact is that the people who earned most from the scandal – already had in excess!
…and Nothing Ever ChangesThe world of finance and investing is a colorful world. And it doesn’t change. “Den of Thieves” has gone through eight editions. And James B. Stewart has updated the newest ones with the newest scandals. The mortgage bubble, the financial crisis, Barnie Madoff…
People just can’t get enough!
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“Den of Thieves” Quotes[bctt tweet="Even now it is hard to grasp the magnitude and the scope of the crime that unfolded, beginning in the mid-1970s, in the nation’s markets and financial institutions." username="get12min"]
[bctt tweet=“It dwarfs any comparable financial crime, from the Great Train Robbery to the stock manipulation schemes that gave rise to the nation’s securities laws.” username=“get12min”]
[bctt tweet=“If ever there were people who believed themselves to be so rich and powerful as to be above the law, they were to be found in and around Wall Street in the mid-eighties.” username=“get12min”]
[bctt tweet=“In ways large and small, legal and illegal, the ordinary discipline of a free market of arms-length buyers and sellers was undermined.” username=“get12min”]
[bctt tweet=“Michael Milken may be an extreme example, but every major participant in these crimes emerged from the experience as a wealthy man.” username=“get12min”]