ZERO COUPON

Erdman (The Swiss Account, The Palace, etc.) makes a welcome return to form with a blue-chip tale of high finance and low cunning in the post-Milken era.

Released from a Club Fed after having served half of a six- year sentence for stock-parking offenses, charismatic Willy Saxon heads (by limo) to San Francisco to make a covert comeback in the investment business, from which the SEC has barred him for life. With a little help from friends he refused to betray to government prosecutors, plus a $60-million stash in Liechtenstein, well- connected Willy becomes a silent partner in both a Bay Area brokerage house and a regional credit-rating agency. Saxon also recruits a motley crew of computer freaks, white-collar felons, and out-of-work scientists to launch a world-class trading operation at a well-appointed ranch he's purchased in the neighboring wine country. When institutional demand for the ingenious derivatives developed by his nerds proves brisk, Willy has to obtain them more capital. He gets it by placing zero-coupon municipal bonds (ostensibly underwritten and graded for obscure California cities by his captive firms) with trusting money managers who file and forget the debt in billion-dollar portfolios. Since tax-exempt obligations of this sort are sold at a discount and pay no interest until redeemed at face value at maturity, Saxon has undisturbed use of the vast sums the bogus issues yield. Before long, adversaries on both sides of the law begin to suspect a scam. While they're closing in, however, wily Willy's outcast prodigies engineer a killing in the currency market, which gets their employer more than even and ensures appropriate retribution for the perfidious villains of the piece.

A capital rogues-to-riches entertainment—with precious little sex or violence but a wealth of inside information on fiscal chicanery.