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

ISBN: 978-0-470-57989-3
322 pages
September 2010
Ruthless: How Enraged Investors Reclaimed Their Investments and Beat Wall Street (0470579897) cover image

Description

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 21st 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.

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Table of Contents

Author's Note.

Introduction.

Chapter 1: "Deal With It!"

Chapter 2: The "Back Nine."

Chapter 3: A Sweet Deal—Until It's Not.

Chapter 4: "I Have No Dreams."

Chapter 5: Bill Meets Mohela.

Chapter 6: Power to the Blogosphere.

Chapter 7: Radioactive Man.

Chapter 8: Armies of the Unseen.

Chapter 9: Day of Deliverance.

Chapter 10: The Newton Factor.

Chapter 11: Harry the Hit Man.

Chapter 12: The Raymond James Caper.

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

Chapter 14: Stretching to Meet the Man.

Chapter 15: State of Play 2009.

Chapter 16: Kathy's War.

Chapter 17: Hopeful Signs from the Hill.

Chapter 18: Going to Meet the Man.

Chapter 19: The View from Here.

Appendix.

Acknowledgments.

About the Author.

Index.

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Author Information

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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Reviews

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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Press Release

October 14, 2010
RUTHLESS: How Enraged Investors Reclaimed Their Investments...and Beat Wall Street

Imagine waking up one morning, calling your broker, and being told that your life savings are “illiquid,” frozen. You can’t get your hands on a nickel of your own money that was sold, deceptively, as being “safe as Treasury bonds.” This is exactly what happened to author Phil Trupp and hundreds of thousands of other investors caught in the biggest and most daring scam in modern Wall Street history—the so-called auction-rate securities scandal. It was a scam so big it amounted to nearly 20% of what it takes to run the entire federal government: $336 billion. Trupp was mad as hell and vowed to get his money back. With the help of other victims the battle was joined. And those victims were as ruthless in their own defense as Wall Street was in picking their pockets.

The lively, hard-hitting story of that battle is detailed in Trupp’s first-hand account, RUTHLESS. It is one of the first books to speak for the victims of the financial meltdown. It is a true story and a candid exploration of the criminal subculture of Wall Street.

RUTHLESS 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 Street’s cagey “best and brightest.” In RUTHLESS: How Enraged Investors Reclaimed Their Investments...and Beat Wall Street (Wiley, October 2010, $27.95, Hardcover), Trupp describes his story and gives names and contact information of how others can fight back and win as well against Wall Street’s greed.

The path to destruction, financial or otherwise, often begins with a simple proposition. For Phil Trupp it came from one of his brokers: “Take it Phil. It’s free money.” This free money came in the form of auction-rate securities (ARS): corporate or municipal bonds with long-term maturities 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.” They were anything but! It was a deceptive sales pitch that lured hundreds of thousands of individual investors, municipalities and corporations to buy the securities.  Since 2008, most auctions have failed leaving the market largely frozen.

RUTHLESS vividly describes how individual investors became mad as hell and joined together on the internet to reclaim their cash. This angry group knows how to reach state attorneys general and other regulators who are charged with taking on the financial markets.  With pressure from angry investors they’ve reclaimed more than $200 billion and continue to fight for the rest.  

The mantra is “Got taken? Get RUTHLESS”.  Trupp’s book also is an insider’s look at life in Washington DC. Encounter characters such as “Radioactive Man,” ex-presidential candidate Fred Thompson, and many others.

“This is a book for anyone invested in Wall Street,” says Trupp. “It’s a personal story, the story of a shameless scam and Wall Street’s ‘let’s take the money and run’ mentality. The carnage was painful and destructive, ruthlessly so. Our group fought back with equal intensity—and we’re still at it. If you’re willing to fight, you can beat the Street at its own game.”     

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