License to Steal : The Secret World of Wall Street and the Systematic Plundering of the American Investor

by Anonymous, Timothy Harper

Stockbroker to young "Remember, when clients send in that money, it's not theirs anymore. It's ours...We're never giving it back to them." Welcome to Wall Street. The longest bull market in history has driven more people to invest in stocks than ever before--and has given rise to unprecedented levels of greed within the brokerage industry that "serves" those investors. In License to Steal, Timothy Harper and his Anonymous coauthor have succeeded in piercing the financial industry's code of silence. In a gripping and fast-paced narrative, they show readers how successful brokers on the "Street Without Shame" peddle worthless stocks, take questionable companies public, manipulate share prices, generate bogus commissions, and raid clients' accounts for their own use. Anonymous and Harper tell a wild, raucous, true story of outrageous acts committed by a handful of rogue brokers--as well as the off-hand, everyday deceptions that are routine in the securities business--and the high life as it is lived by the young and rich in the canyons of Wall Street. The book recounts the rise of a young, successful stockbroker, first as a smart, eager operator willing to do whatever it takes to make it. Always keeping just within the law, he watches his colleagues in the brokerage business cross over daily into unscrupulous conduct, lining their own pockets at the expense of their clients. Unwilling to join them, unable to endure the pressure of their corrupting influence, he eventually quits Wall Street. A mesmerizing story of personal redemption, License to Steal is also a searing indictment of a corrupt and brutalizing system and a warning to the millions of American investors who trust and rely on stockbrokers for guidance on their own investments.

Genres: Nonfiction

288 pages, Hardcover

First published November 1, 1999

About the author

Books can be attributed to "Anonymous" for several reasons:

* They are officially published under that name
* They are traditional stories not attributed to a specific author
* They are religious texts not generally attributed to a specific author

Books whose authorship is merely uncertain should be attributed to Unknown.

See also: Anonymous

Reviews

[Dennis Littrell · Rating 4 out of 5]

Includes a license to be an ignorant slob

Every once in a while, one of the rapacious cretins inhabiting the brokerage houses of Wall Street has a twinge of conscience and a need to confess, and so he writes a mea culpa to cleanse his soul. The anonymous author, now a modest financial advisor in a small town, manages to look like a hero with a human heart while exposing the compromised nature of the securities business. If you have any illusions left about the goodness of humanity, don't read this book. You'll lose them. Part confessional, part cautionary tale, this first person narrative makes Wall Street brokers look like the dregs of humanity. If this sensational and rather novelistic tale is to be believed (and it is) then even lawyers and used car salesman tell fewer lies and steal less than Wall Street brokers.

License to Steal is the latest in a genre that goes back to at least the robber-baron days of the 19th century and probably to the earliest days of capitalism in renaissance Italy. One of my favorites is the very entertaining Where Are the Customers' Yachts? (1940) by Fred Schwed Jr. In that little book, studded with New Yorker cartoons, an innocent asks a broker the title question and is told, naive fool that he is, that the customers don't have any yachts. Only brokers and officers of the brokerage firm have yachts. According to the authors, today's breed of white collar crook doesn't spend his ill-gotten lucre on anything so romantic as a yacht, preferring German motor cars, cocaine and Cuban cigars, floozies, French champagne and blackjack. The degenerate get more degenerate it would appear.

I had a broker myself, back in the days of my naiveté, and I recall she told me one day that she was hoping the market would plunge a hundred points (that was in the days when a hundred-point swing meant something). I was momentarily stunned since I was a client with some serious money in those stocks that she was hoping would plunge. But she had forgotten herself for the moment and was talking to me as she would to one of her fellow brokers. THEY wanted a plunge so they could stir up some action and make some money on commissions. And therein lies what the authors of License to Steal call on page 265 the "basic conflict of interest" in "the securities business," namely that what is good for the broker is to move "clients in and out of positions to generate commissions" (and to take advantage of the spread), while what is good for clients is just the opposite, to pay a minimum for commissions and to get trimmed by the spread as seldom as possible. This conflict is still with us although, by trading over the Net without a broker, the commissions are much cheaper and the danger of getting trimmed by in-house spreads is lessen considerably. Nonetheless, the industry as a whole still has a vested interest in churning the accounts of investors. We see this in the frequent upgrades and downgrades issued by brokerage firms, recommendations that encourage a lot of buying and selling. The only way this conflict is going to be eliminated is for brokers to gain only when their clients gain. I wouldn't hold my breath for that reform however, since it would have the effect of sending the vast majority of brokers back to telemarketing or to selling aluminum sliding.

If you like License to Steal, and I think you will, since it is very hard to put down with the lurid picture of piggy greed and human stupidity it paints, you will also like F.I.A.S.C.O.: Blood in the Water on Wall Street (1997) by Frank Partnoy. Partnoy's book is about derivatives sales people who are as morally degenerate as the characters in License to Steal. The only substantive difference in the books is that Partnoy's book is not anonymous and neither are the firms he worked for.

--Dennis Littrell, author of “The World Is Not as We Think It Is”

[Oliver Thylmann · Rating 4 out of 5]

my stock market times. great suspense.