The amount of fraud that went on at Prudential-Bache as related by this book is absolutely shocking. Even more outrageous is the fact that so many defrauded investors were "paid back" cents on the dollar through class action suits that they didn't participate in. (Apparently, to opt out of a class action suit, you have to take action and write a letter to the appropriate court; if you don't, then it's assumed that you want to be part of it, and you're now barred from suing the company individually...?) I was trying to find out more about the litigation, but as it happened during the pre-Internet days, I couldn't find a lot of corroborating info. The author obviously did a ton of research for this, but it's hard for me to judge how much of the book is composed of facts and how much is anecdotes/fiction. For example, a lot of book consists of conversations that the author was obviously not party to. How does the author know what was said by whom? Yes, he interviewed people, and, sure, important meetings/conversations might be clear in their mind, but who remembers the exact wordings from normal conversations/meetings? (The author did mention that some of the conversations were recorded by Prudential-Bache employees for whatever reason...)
Wow, this was scary. After reading this you'd think twice about investing your hard earned money anywhere. I loved Eichenwald's other books (The Informant, about the ADM scandal and Conspiracy of Fools, about the Enron debacle). This one was written in between those two and is about the Prudential-Bache fraud. Hundreds of thousands of people lost their money, yet the perpetrators never went to jail and are still rich. In the preface, the author says, "Why did we learn nothing? Why did corporate America continue down this self-destructive path? To me, the answer is obvious: Despite the vast wreckage caused by Prudential's fraud, no individual was ever held accountable. No one ever went to jail, no individual was cited by the Securities and Exchange Commission." And at the end of the book, he concludes "As long as there is greed, as long as crimes go unpunished, as long as Wall Street can make millions even if clients lose money, the scandal at Prudential will be just another chapter in an ongoing saga of financial fraud."
