Circle of Friends

August 5, 2013
Prostitution is said to be the oldest profession, but insider trading must top the list of world's oldest white-collar crimes. Bestselling author and Fox News correspondent Gasparino's book is a true account of economic corruption that reads like a thriller. He constructs a story of crime and punishment, filled with larger-than-life personalities and their comrades in federal law enforcement. The fast-pace narrative and Gasparino's beat-on-the-street writing aside, the book examines insider trading from conception to its potential effects on society. The author's main incentive is in revealing the politics of federal prosecution of crime. He goes deep inside the government's investigation, providing new perspective on regulators exaggerated view of insider trading, arguing ulterior motives. According to Gasparino, the 2008 collapse of the economy was not caused by such petty offenses. Readers are left wondering, why is the government avoiding the more major crimes on Wall Street? Agent: Scott Shuster, Zachary Shuster Harmsworth Literary Agency

July 15, 2013
A senior correspondent for Fox Business Network profiles the ongoing insider trading prosecutions that have secured convictions for more than 70 hedge fund traders. Gasparino (The Sellout: How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System, 2009, etc.) describes his book as "an attempt to provide some perspective on what regulators view as the white-collar crime of the century." He details the investigations that have ensnared such multibillion-dollar outfits as Raj Rajaratnam's Galleon hedge fund and are closing in on Steve Cohen's huge SAC Capital. Hedge fund managers cite their use of the "mosaic theory of investment," careful research, expertise and skill in putting together profit-making analysis as the reasons for their consistently outsized returns. Federal investigators insist they come from an illegal edge over public investors and aim to level the playing field. Gasparino demonstrates that their charges are credible, showing teams from the Manhattan U.S. Attorney's Office, the SEC and the FBI persuading juries with good detective work, undercover informants and wiretaps. The author's presentation of the succession of these cases, as well as those against the research firms that provided tips to the big players, is detailed and well-written. He provides perspective with a history of insider trading going back to the 1920s, covering the evolution of laws against insider trading under the Roosevelt, Kennedy and Reagan administrations. (Major prosecutions of Ivan Boesky and Michael Milken took place in the 1980s.) After discussing whether insider trading should be a crime, Gasparino raises the question of proportionality, juxtaposing hedge fund prosecutions with the examples of banks and bankers deemed too big to prosecute, even though their conduct led to the economic collapse of 2008. A thoughtful, provocative investigation and assessment.

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October 15, 2013

It is hard to imagine that insider trading was once legal. The security laws of 1933 and 1934 outlawed the practice, and it would be another 50 years before the Securities and Exchange Commission (SEC) used these laws to go after those involved. Gasparino (senior correspondent, Fox Business News; Blood on the Street; King of the Club) offers here a rare, inside account of how the FBI, the SEC, and the U.S. Department of Justice pursue insider traders--the circle of friends of the title--focusing on those at the bottom of the pecking order to get them to flip those higher up. Gasparino relates how Raj Rajaratnam of Galleon Group was convicted for insider trading and how SAC Capital is facing SEC charges for failing to prevent the practice. The author provides an in-depth look of the Rajaratnam investigation, profiling key players involved. Although the Cohen investigation is also discussed, no final outcome is given, as the trial has not occurred. The author shows that some of the tactics the FBI and the justice department use--bullying and intimidating people into testifying--are no better than those of the criminals they pursue. VERDICT For libraries that have a strong business collection and patrons with an interest in insider trading crimes.--Michael Sawyer, Pine Bluff, AR

Copyright 2013 Library Journal, LLC Used with permission.

August 1, 2013
Gasparino describes the involvement of government officials in insider-trading investigations up to early 2013. He begins in mid-2007, when we meet a little-known but successful trader who is told by the FBI that he faces jail unless he confesses and helps the government catch others. Often suspects are identified by another cooperator. The author weaves his tale like a novel, except it is a well-researched account of events using interviews, names, and dates. Instead of small firms, the FBI became convinced that a massive circle of friends existed on Wall Street . . . mainly at some of Wall Street's biggest trading outfits, known as hedge funds who were using and trading on insider information. Gasparino tracks the government's successes, failures, and work in progress, with major violators such as Raj Rajaratnam jailed while the white whale of Stamford continues in their sights. He concludes that no one who studies the markets and financial systems has any doubt . . . they will repeat the same practices that led to the 2008 collapse. Very informative.(Reprinted with permission of Booklist, copyright 2013, American Library Association.)