Here is the true story of a top Wall Street player's transformation from a straight-arrow believer to a jaded cynic, who reveals how Wall Street's insider game is really played.
Dan Reingold was a top Wall Street analyst for fourteen years and Salomon Smith Barney analyst Jack Grubman's chief competitor in the red-hot sector of telecom. Reingold was part of the "Street" and believed in it.
But in this action-packed, highly personal memoir written with accomplished Fast Company senior writer Jennifer Reingold the author describes how his enthusiasm gave way to disgust as he learned how deeply corrupted Wall Street and much of corporate America had become during the roaring stock market bubble of the 1990s.
Confessions of a Wall Street Analyst provides a front-row seat at one of the most dramatic and ultimately tragic periods in financial history. Reingold recounts his introduction to the world of Wall Street leaks and secret deal-making; his experiences with corporate fraud; and Wall Street's alarming penchant for lavish spending and multimillion-dollar pay packages.
Reingold spars with arch rival Grubman; fends off intense pressures from Wall Street bankers and corporate CEOs; and is wooed by Morgan Stanley's CEO, John Mack, and CSFB's über-banker Frank Quattrone.
Reingold describes instances in which confidential deals are whispered days before their official announcement. He recalls the moment he learns that Bernie Ebbers's WorldCom was massively cooking its books. And he is shocked to have been an unwitting catalyst for a series of sexually explicit e-mails that would rock Wall Street; bring Jack Grubman to his knees; and contribute to the stepping aside of Grubman's boss, Citigroup CEO Sandy Weill.
Some of Reingold's stories are outrageous, others hilarious, and many are simply absurd. But, together, they provide a sobering exposé of Wall Street: a jungle of greed and ego, a place brimming with conflicts and inside information, and a business absurdly out of touch with the Main Street it claims to serve.
He shows how government investigators, headlines notwithstanding, never got to the heart of the ethical and legal transgressions of the era. And how they completely overlooked Wall Street's pervasive use of inside information, leaving investors even sophisticated professionals cheated. The book ends with a series of important policy recommendations to clean up the investing business.
In the tradition of Liar's Poker and Den of Thieves, Confessions of a Wall Street Analyst is a no-holds-barred insider's account that will open the eyes of every investor.
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About the Author
Dan Reingold was a Managing Director and telecom analyst for fourteen years at Morgan Stanley, Merrill Lynch, and Credit Suisse First Boston. He was ranked number one or number two by Institutional Investor magazine for most of his career. Prior to that he was a financial executive at MCI. He has been profiled in Barron's; frequently quoted in the Wall Street Journal, the New York Times, and BusinessWeek; and interviewed on TV, including CNBC and Wall $treet Week with Louis Rukeyser. Reingold is currently Project Director for Telecom Finance at the Columbia Institute for Tele-Information at Columbia's Graduate School of Business.
Jennifer Reingold is a senior writer at Fast Company magazine. She is the coauthor of Final Accounting: Greed, Ambition, and the Fall of Arthur Andersen and the BusinessWeek Guide to the Best Business Schools. Jennifer is Dan's niece.
Read an Excerpt
Confessions of a Wall Street AnalystA True Story of Inside Information and Corruption in the Stock Market
By Daniel Reingold
HarperCollins Publishers, Inc.Copyright © 2006 Daniel Reingold
All right reserved.
Ed picked me up at my house in a taxi. My home, at the time, was nothing super fancy, but Paula and I had put a lot of sweat into it and were quite proud of it.
Ed took one look at the house and almost started laughing. "You ought to come to Wall Street and hit the big time," he said.
July 14, 1989
"This Is the Street Where They Fool People."
That's what I was thinking as I stepped off the early morning express train from Scarsdale and stood on Madison Avenue, blinking nervously in the bright sunlight. As I gazed up at the rows of tall buildings and tried to avoid colliding with the natives, I felt the tiniest sense of relief.
At least my job was on Wall Street. Madison Avenue, by contrast, was the center of the advertising world, the place where smart and manipulative companies burned loads of cash and creative energy to convince us that we needed to wash our hands with Dial, brush our teeth with Colgate, and wipe our derrieres with Charmin. At least I was going to be an analyst whose job it was to evaluate companies on their merits, not someone whose raison d'etre was to seduce America's soap-opera watchers with meaningless slogans and exaggerated promises.
My new job in equity research, I believed, had nothing to do with manipulation and everything to do with balanced, rational thinking. I had made the leap to Wall Street in part because of the money, but also because being an analyst seemed like the perfect job for a serious guy like me who liked to reason his way through life. Sure, emotion and hype sneaked into my line of work occasionally, but in the end, the stock market was rational, analytical, cool. Fooling people wasn't part of this equation.
Or so I thought. In retrospect my naivete sounds charming or -- let's not be charitable -- silly. Of course Wall Street was as much about fooling people as Madison Avenue was, at least if you were one of the corporate executives trying to convince investors -- and analysts -- that your company's shares would shoot to the moon. But my job, I hastened to tell myself, was all about shooting straight. I had been in a sales role before, and I'd never liked it. Now I'd have a chance to focus entirely on the facts.
I grabbed on to that belief as if it were a life preserver and clutched it as I walked up Madison, then west on Forty-eighth Street and north on Sixth Avenue until I reached the headquarters of Morgan Stanley at Fiftieth and Sixth. I was 36 years old, it was my first day on Wall Street, and I was scared out of my mind.
Not that I had fallen off the turnip truck or anything. I had moved here from Washington, D.C., where I had been director of business analysis at MCI, the brash upstart that was shaking up the telecommunications business. I had interacted with Wall Street and its analysts and bankers for the past two years, trying to make them see my company as positively as I did. What I loved the most was the intellectual sparring as we debated the future of MCI and the telecom industry. It had been a great gig.
But this was the big time. I had been recruited by one of the premier investment banks, a place better suited to Brooks Brothers-clad Greenwich bluebloods than a middle-class public school guy from Buffalo, New York. I was going to be one of a select group of some 35 analysts at Morgan Stanley whose job it was to recommend stocks -- and, I had been told, move the financial markets. The prestige and power of my new job filled me with pride. But the responsibility terrified and humbled me. All of a sudden I was in the major leagues, and I'd never even played Class A ball. What was I doing in the middle of this?
Already, I'd ventured pretty far from my beginnings as the son of a scrap-metal dealer with a high school education. I'd been a political science major and math minor at the State University of New York at Albany, where I'd met my wife-to-be, Paula Zimmer, during a Wiffle ball game on the first day of our second year. She studied art history and then went back to school to become a pediatric-intensive-care nurse. And I'd gone on to become a starry-eyed graduate student of Middle East politics at the University of Chicago and Princeton University, certain I wanted to devote my life to bringing peace to that powder keg of a region.
I ended up at the LBJ School of Public Affairs at the University of Texas, earning a master's degree in 1979. I was hoping for an assignment that involved foreign policy but instead accepted a $24,000 offer from Coopers & Lybrand, one of the world's largest accounting and consulting firms, as an economic consultant in its Washington, D.C., office. For a few years, I was really happy at Coopers. The job appealed to my inner wonk, and I worked my way up the food chain. But once I was promoted to manager, my job became more and more about selling new consulting services to clients. The whole selling thing turned me off. I didn't want my life to be defined by the spin and hype of selling. Working inside a growing company began to sound a lot more interesting.
From Consulting to Communications: MCI
It just so happened that the Coopers's D.C. office building backed up against the new offices of MCI, an upstart telecommunications company that had been in business since 1968. MCI had emerged as a young, exciting David to AT&T, the ultimate corporate Goliath, with a more responsive, entrepreneurial culture. Its founder, Bill McGowan, had found a way to compete against AT&T in the long distance market even . . .
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Most Helpful Customer Reviews
Dan Reingold hits a bullseye on his book, Confession of a Wall Street Analyst. Read his book and come face to face with a financial business which is laden with conflicts of interest. If anyone should know, it is Dan. He was one of the top telcommunicatons analysts, at the pinnacle, Morgan Stanley, Merrill Lynch, Credit Suisse First Boston... If anyone does not think the stock market is rigged for the benefit of the insiders, read this book...As George Orwell once said,'In a time of universal deceipt, telling the truth is a courageous act.' Hats off to Dan Reingold & Jennifer Reingold!!
I highly recommend this book. It achieves with great success the winning formula for quality non-fiction -- an exciting true story told in a very readable way. It is truly a page-turner. The fact that the subject matter, including details of finance and securities, is unfamiliar to non-Wall Street types, makes the story-like atmosphere all the more impressive. You definitely feel as though you¿ve joined an insider on a wild, wild ride. The tale of the rise of telecom within the stock market boom of the late `90s is one of amazing twists and turns, crazy personalities and of course, ultimately, a crash as startling as the rise itself. There are many detailed scenes and memorable images, notably of various meetings with the biggest of Wall Street¿s big shots, that are truly too bizarre to believe. I followed much of what went on in telecom and Wall Street in general as it happened, but having now read this book, I feel I have a real understanding of what went on on the inside, and I can't believe how truly amazed I am -- the depth of it all went beyond even my most cynical view. The author, Dan Reingold, does an amazing job of relating his personal experiences while weaving them into the overall theme. He is clearly Derek Jeter to Jack Grubman's Barry Bonds. I imagine that he may receive criticism from people (likely those still working on Wall Street) who feel the picture presented is too negative or who question his motives (though he has noted that all proceeds are being contributed to charity). But I think it is clear ¿ he told the story as he saw it and lived it -- nothing more. There were even many instances in which he admitted bad decisions (or indecisions) and regrets. But the motive seems clear to me -- it was an important, relevant story that should be told, hasn't been fully told, and is of interest and importance to many. He had a front row seat and was in a unique position to tell it. And as a reader, I couldn¿t put the book down.
Anyone with more than a passing interest in the worlds of Telecom or Wall Street will enjoy and learn from this insider's tale. It is at once a very broad and very personal story, with many astounding behind-the-scenes revelations from the boom/bust years of the US telecom industry, and the incredible financial ride it took. A morality play and cautionary tale, recommended for any business reader. Reingold should also be commended for his calls/recommendations for genuine Wall Street reform.
Mr. Reingold decides to write a story of corruption on Wallstreet. His story comes off as a bitter, vindictive writer who portrays his arch nemesis Jack Grubman as a poster child for corrution on wall street. After first few chapters, we as a reader get it. Mr. Reingold hates this man. Yet over and over, the book hashes over the failings of Mr. Grubman. Mr. Reingold states the wallstreet is so corrupt and is the reason for this book. But basically his distaste for Mr. Grubman seem to stem not from the illegal and unethical tactics of Jack Grubman's obtaining and disseminating informations but rather by jealousness that the author wasn't privy to the same kind of information (and thus corruption). Mr. Reingold complains about the corruption, yet he did absolutely zero about this. Reingold comes across as a whiner and he can't seem to admit that he can be as guilty ethically as a person he is crucifying in this book
Dan Reingold takes you behind the scenes and exposes what many insiders knew but weren't telling about the conflicts of interest between investors, Wall Street and the Corporate America. Dan is best suited to tell this story because 1. He was there - as a top ranked analyst in one of the hottest bull market sectors at several of the most prominent Wall Street firms, 2. He was there long enough to have perspective of how the game changed for the worse, and 3. He could afford to speak out because he had nothing to hide. Many others who could tell the story, can't because of their own egregious roles in it.
Dan's book is an honest, excellent and often funny look at what happened during the NASDAQ bubble in the late '90's. I have first hand knowledge of the conflicts of interest faced by research analysts at that time and Dan captures these situations extremely well. A must read for anyone who is planning to work on Wall Street or lived through the bubble, but even those who haven't enjoy the work. Well done Dan!
Mr. Reingold's so-called confessional has one material drawback, he neglects to confess to his 'sins' which were many and no different than the rest of the so-called independent analysts. Mr. Reingold conveniently forgot to mention his role as an advsior to companies, as an aggressive seeker of banking business, as someone who took public and supported many companies who went bankrupt, as someone whose ATT bullishness was intellectually inconsistent with his pro-Bell stance and most importantly as someone who did things far more egregious than writing stupid emails, namley directly threatening corporate officers with research retalliation for not giving one of Dan's multiple employers banking business (he got paid handsomely to hop around three firms to do all the things he accuses others of). This is a shameless, self-rigeous portrayal by a delusional character who clearly is still demonized by his failure to rise to the stature of others in the industry. He should be grateful, otherwise his many transgression would too have been subject of regulatory scrutiny. If he had written a true confessional where he admitted his part in the overall mix, even while saying others were 'worse', this would be more palatable. Unfortunately, it is relegated to the rants of a still bitter man. Mr. Reingold should be reminded of the old adage, 'people who live in glass houses should not throw stones.'