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

Phil Trupp (Author)

Book Description

Publication Date: September 28, 2010

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.

Editorial Reviews

From Publishers Weekly

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.)
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Review

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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Product Details

• Hardcover: 322 pages
• Publisher: Wiley; 1 edition (September 28, 2010)
• Language: English
• ISBN-10: 0470579897
• ISBN-13: 978-0470579893
• Product Dimensions: 9.2 x 6.4 x 1.1 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.9 out of 5 stars  See all reviews (8 customer reviews)
• Amazon Best Sellers Rank: #1,061,057 in Books (See Top 100 in Books)

More About the Author

Phil Trupp (Washington, DC) is a veteran investigative journalist, and the author of many books, including Sea Of Dreamers and Tracking Treasure. Tracking Treasure was widely reviewed and excerpted in publications. He is a regular commentator for New York Times Dealbook and New York Magazine Online. He also contributes twice a week to www.auctionrateprefereds.org- the top site on ARS. As Assistant Bureau Chief of Fairchild Publications/ABC Cap Cities Washington Bureau, he covered every major federal agency, including the White House, Pentagon, NASA, Commerce, the Federal Reserve, and the Supreme Court. Trupp was an editor, writer and co-creator of "VISTA" magazine, published by Volunteers in Service to America. He has produced journalism for "Reader's Digest", and his story on coal mine safety was entered into to the Congressional Record. He lectures on "The Future of Journalism" at American and Georgetown Universities.

Customer Reviews

Most Helpful Customer Reviews

7 of 7 people found the following review helpful:

5.0 out of 5 stars Couldn't put it down, October 7, 2010

By 

Charles Nielsen (London) - See all my reviews

Amazon Verified Purchase

This review is from: Ruthless: How Enraged Investors Reclaimed Their Investments and Beat Wall Street (Hardcover)

I've read a lot of books on finance and this is one of the very best. The author tackles a rather arcane subject - the collapse of the auction rate securities market. Sounds dry, right? It's not. It was a bigger scandal than Madoff. The author brings the story to life and puts a face on something you may have read about on page 18 of the Wall Street Journal. There's a strong human element here, and even if you've never heard of auction rate securities, if you've even received devastating news over the phone that threatened your entire being, you will relate to this book.

Ruthless should be mandatory reading for everyone who caused the economic collapse of 2008-2009 - the bankers, the fed and, most of all, the brokerages. Ruthless gives it to the latter with both barrels.

For those interested in the financial future of the world and who have a desire to ward off the next bubble this is absolutely must reading.

It's worth noting that the auction rate securities crisis is not over. Some brokerages, Oppenheimer & Company is particular, refuse to do the right thing. Their clients continue to twist in the wind.

Ruthless is a cautionary tale for anyone who's ever trusted an "expert" to handle their money.

5 of 5 people found the following review helpful:

5.0 out of 5 stars Compelling and intriguing., October 7, 2010

By 

Nigel Londonderry - See all my reviews

This review is from: Ruthless: How Enraged Investors Reclaimed Their Investments and Beat Wall Street (Hardcover)

I just had the pleasure of reading Mr. Trupp's new book, Ruthless. The story is a compelling walk through the personal and professional life of a seasoned investor and his struggle with a devastating investment bait and switch scam and ultimate triumph. The realization that this Wall Street scandal is so immense, hurting so many people, adds considerable gravity to the story. Their is a strong thread of anger and contempt through the book, but it always feels sincere and justified.

There is a very intriguing cast of characters that keep the book engaging and fresh. Most notably, the Bush official on the outs. He is less than affectionately referred to as "Radio Active Man." Taking the time frame into account, and the fact that their were only a few truly ostracized Bushies, I believe this to be Alberto Gonzales.

This is not a slow, boring investment how to book. This is a fast and fun read that's more of a personal tale of life experience. I literally couldn't put it down.

Though Mr. Trupp succeeds in getting whole again, don't let the subtitle fool you. Many investors have not recovered their loss, and over 100 billion dollars of stolen money continues to reside in the pockets of Wall Street scum. Mr. Trupp has become a guiding force, guru, and hero to many still seeking to reclaim their lost or frozen investments. Don't be surprised, as this story continues to unfold, if you soon discover it's resolution in a theatre near you. - NL

3 of 3 people found the following review helpful:

5.0 out of 5 stars Score one for the little guys!, November 10, 2010

By 

Nancy Loderick "Internet strategist" (Boston, MA) - See all my reviews
(REAL NAME)   

This review is from: Ruthless: How Enraged Investors Reclaimed Their Investments and Beat Wall Street (Hardcover)

Phil Trupp writes of his quest to beat Wall Street. Phil, as well as many other investors, lost $336 billion in the auction rate securities (ARS) market. Brokers promised their clients, "It's just like cash."

The real story about these investments:

*They are most definitely not liquid; these are long-term or no maturity bonds
*the supposed market for these was artificially created by banks.

Phil is mad and that comes through loud and clear in every chapter. You can really feel his emotion. Phil is also determined. He's not going to lie down and accept that he can't get his money back.

Phil triumphs in spite of the odds stacked against him. It's inspiring to read of his fight. The odds he was fighting:

*he's considered a sophisticated investor
*he's supposedly bound by the arbitration agreement he was forced to sign. Arbitration almost always comes out on the side of the broker and not the investor.
*the Wall Street conspiracy of silence.

Phil is human. He is afraid and nervous about contacting Harry "the hit man" Newton, the force behind the website, AuctionRatePreferreds.org. The headline of this website says it all, "Auction rate preferred securities is the largest fraud ever perpetuated by Wall Street on investors."

What I learned from this book:

*NEVER buy an investment that I don't understand.
*ALWAYS read the prospectus. If there isn't a prospectus, don't buy it.
*Stick to plain vanilla investments, e.g. stocks, bonds, money markets.
*Diversify, diversify, and diversify.

This book is both inspiring and educational. I highly recommend it.