SERPENT ON THE ROCK

An absorbing and definitive take on the criminally unscrupulous deceptions committed by Prudential Securities in its aggressive marketing of chancy limited partnerships during the 1980s. Drawing on a wealth of authoritative sources, New York Times correspondent Eichenwald offers a tellingly detailed account of the long-lived scandal and its enormous toll. In roughly chronological fashion, he recounts how Pru, an insurance colossus (that likens its integrity and stability to the Rock of Gibraltar), almost offhandedly acquired Bache, a Wall Street also-ran, in 1981. The cash-strapped brokerage house nonetheless had a lucrative niche in oil/gas, real estate, and other kinds of limited partnerships that its registered reps pushed on all comers as high-yield investments with tax advantages. At the upper echelons of the corporate hierarchy, it was an open secret that the partnerships Pru-Bache was assiduously packaging and peddling in billion-dollar lots were extremely risky propositions. Thanks to flashy promotional material that minimized or ignored egregious LP hazards (including a lack of secondary markets), the RRs were duped along with their clients. When returns missed forecast marks or disappeared altogether, though, Pru and its partnership sponsors stonewalled queries and complaints, whether from employees or customers. The author makes a particularly good job of recapping how underfunded but determined state regulators helped the SEC bring Pru to book and ensure equitable recoveries for bilked investors. And unlike Kathleen Sharp in her account (In Good Faith, p. 765), Eichenwald leaves precious little doubt that the venality was systemic, not attributable to a few corrupt individuals. And he provides ample evidence of the enduring swindle's vast human costs on both the sell and buy sides. A masterful reconstruction of a substantive financial scandal, one that bears comparison with such landmark exposÇs as Barbarians at the Gate, Den of Thieves, and The Predators' Ball. (8 pages photos, not seen) ($100,000 ad/promo; author tour)