Ruthless: How Enraged Investors Reclaimed Their Investments and Beat Wall Street

by Phil Trupp

Overview

Ruthless is a candid exploration of the criminal subculture of Wall Street, and one of the first books to speak for the victims of the financial meltdown. On February 14, 2008, author Phil Trupp received a call from one of his brokers telling him a large portion of his investments were frozen—on ice—turning his life and plans for retirement upside down. When the fog started to clear, Trupp realized he was one of many investors caught up in what experts called the greatest attempted securities fraud in modern Wall Street history—a $336 billion scam which made the savings and loan scandal of the 1980s look like a simple street mugging.

The path to destruction, financial or otherwise, often begins with a simple proposition. For author Phil Trupp it came from one of his stock brokers: "Take it, Phil. It’s free money." This free money came from auction-rate securities (ARS). Auction-Rate Securities are corporate or municipal bonds with a long-term maturity for which the interest rate is reset at frequent auctions. ARS interest rates were higher than money markets and were sold as completely safe, liquid, Triple-A rated "cash equivalents," a deceptive sales pitch that lured hundreds of thousands of investors to buy the securities. Since 2008, most auctions have failed leaving the market largely frozen. The victims ranged from individual investors to the Joffee Foundation, a nonprofit that can no longer fund programs that help prevent AIDS in Africa, to the Port Authority of New York.

While this is a classic 21^st century tale of Wall Street greed and betrayal, it is also a story of redemption and the life-altering struggle of American investors and others around the world who, in the end, beat the Wall Street fraud-masters. Ruthless is a story of how individual investors became mad as hell and joined together to reclaim their cash investments. So far they’ve reclaimed more than $200 billion and continue fighting for the rest. A lively, page-turning guide for any investor with a stunning lesson on how to fight back and win.

Product Details

ISBN-13:	9780470579893
Publisher:	Wiley
Publication date:	09/28/2010
Pages:	336
Product dimensions:	6.00(w) x 9.10(h) x 1.30(d)

About the Author

PHIL TRUPP is a veteran investigative journalist, and the author of many books, including Sea of Dreamers: Travels with Famous Ocean Explorers and Tracking Treasure: Romance & Fortune Beneath the Sea and How to Find It! He is also a regular commentator for New York Times Dealbook and New York Magazine Online, as well as a weekly contributor to www.auctionratepreferreds.org, the Internet's top site on auction-rate securities (ARS). Trupp was assistant bureau chief of Fairchild Publications/ABC CapCities, where he covered the White House, Pentagon, Supreme Court, Treasury, NASA, and the Federal Reserve, and, today, lectures on "The Future of Journalism" at American and Georgetown Universities.

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Table of Contents

Author's Note xi

Introduction 1

Chapter 1 "Deal With It!" 5

Chapter 2 The "Back Nine" 23

Chapter 3 A Sweet Deal-Until It's Not 41

Chapter 4 "I Have No Dreams" 59

Chapter 5 Bill Meets Mohela 79

Chapter 6 Power to the Blogosphere 93

Chapter 7 Radioactive Man 107

Chapter 8 Armies of the Unseen 121

Chapter 9 Day of Deliverance 139

Chapter 10 The Newton Factor 153

Chapter 11 Harry the Hit Man 167

Chapter 12 The Raymond James Caper 177

Chapter 13 What's It All About, Barney? 191

Chapter 14 Stretching to Meet the Man 213

Chapter 15 State of Play 2009 227

Chapter 16 Kathy's War 239

Chapter 17 Hopeful Signs from the Hill 255

Chapter 18 Going to Meet the Man 263

Chapter 19 The View from Here 281

Appendix 301

Acknowledgments 311

About the Author 313

Index 315

Editorial Reviews

In his latest exposé (after Tracking Treasure), Trupp, a former investigative reporter, details his response to learning, on Valentine's Day, 2008, that a third of his retirement investments might have been wiped out. Two years earlier, his Wachovia broker had urged him to park those funds in an Auction Rate Security account ("Take it, Phil, it's free money"), but now Trupp was answering his phone to a new Wachovia broker's disturbing hello: "We've got a problem." ARS financial instruments were auctioned nearly every week, but now, as the economy began to collapse, no one was buying, so there were too few bidders to hold an auction. Major banks were unwilling to step into the breach, and the billion international ARS market had frozen solid as the bonds' value plummeted. While the broker called the problem a temporary illiquidity, it became clear to Trupp that he'd been scammed. Having been assured that ARS accounts were as safe as cash, Trupp decided to fight back, creating a community (through blogging and organizing with other victims) that helped expose the fraud and put enough pressure on Wachovia and other major financial institutions to meet depositors' claims. His hard-hitting account of a real life David and Goliath is page-turner (Sept.)

Publishers Weekly

Trupp, an experienced news journalist, invested in auction-rate securities (ARS) around 2007 after being assured by his Wachovia broker that these debt obligations were safe and could be sold easily. Trupp explains that when the ARS market crashed in February 2008, he and over 100,000 other investors were left with some $336 billion in illiquid ARS. Trupp recounts his anger and tells of his odyssey to get redress for himself and other ARS investors. He heaps criticism on the greed of Wall Street, lax government regulation, and the mandatory arbitration process of the Financial Industry Regulatory Authority (FINRA), which he claims is stacked against investors. Trupp retells investor stories and how he helped publicize the ARS problem over the Internet when traditional media failed to air the problem. As a result of the pressure brought by investors and state regulators, more than half of the ARS had been redeemed at the time of his writing. VERDICT Business-oriented readers who can get past Trupp's numerous angry rants will find his first-person account instructive of how Wall Street and regulators betrayed the trust of so many ARS investors.—Lawrence R. Maxted, Gannon Univ. Lib., Erie, PA

Library Journal

Trupp, an experienced news journalist, invested in auction-rate securities (ARS) around 2007 after being assured by his Wachovia broker that these debt obligations were safe and could be sold easily. Trupp explains that when the ARS market crashed in February 2008, he and over 100,000 other investors were left with some $336 billion in illiquid ARS. Trupp recounts his anger and tells of his odyssey to get redress for himself and other ARS investors. He heaps criticism on the greed of Wall Street, lax government regulation, and the mandatory arbitration process of the Financial Industry Regulatory Authority (FINRA), which he claims is stacked against investors. Trupp retells investor stories and how he helped publicize the ARS problem over the Internet when traditional media failed to air the problem. As a result of the pressure brought by investors and state regulators, more than half of the ARS had been redeemed at the time of his writing. VERDICT Business-oriented readers who can get past Trupp's numerous angry rants will find his first-person account instructive of how Wall Street and regulators betrayed the trust of so many ARS investors. (Library Journal, September 15, 2010)

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