The 10 Best Books About Financial Crime
Billion Dollar Whale – Tom Wright & Bradley Hope
This thrilling true story reads like a Hollywood movie and might soon become one. An ambitious 20-something from a wealthy Malaysian family made a name for himself on the jet-set party scene, then leveraged his reputation and connections to pull off one of the biggest financial heists in history. Jho Low stole billions of dollars from an investment fund and used the money to influence elections, finance blockbuster films, build a property empire and throw ever more lavish parties. Most incredibly, though, he got away with it. For a while.
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Dark Towers – David Enrich
As finance editor of the New York Times, David Enrich knows his way round a financial scandal. His first book, The Spider Network, told the enthralling story of the 2006 Libor scam and could have had its own entry on this list. Instead, we’ll focus on his new one. Dark Towers is the corporate history that Deutsche Bank doesn’t want you to read. From murky 19th-century beginnings to helping the Nazis build Auschwitz and into the 1990s – when the bank chased Wall Street riches at all costs and started lending to Donald Trump and Jeffrey Epstein – this is the story of a financial institution that has done some serious damage.
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Black Edge – Sheelah Kolhatkar
Steven Cohen was the Wall Street legend who inspired Damian Lewis’s character in Billions. Then the FBI got a whiff of insider trading and started digging around. His firm, SAC Capital, ended up paying record fines of almost $2bn for securities and wire fraud. In the hands of author Sheelah Kolhatkar, the full story of that federal investigation is a wild ride – with a remarkable postscript. SAC Capital is no more but Cohen himself has now served a two-year ban on managing outside money and is back in the game. Most recently, he courted controversy over his involvement in the GameStop short squeeze.
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Octopus – Guy Lawson
Hedge fund Bayou Capital collapsed in 2008, around the same time that the world was catching up with what Bernie Madoff had been up to (see below). Bayou’s fraudulent activities would probably have been lost in Madoff’s shadow, if only they hadn’t been so weird. The fund was run by Sam Israel III, a man who thought he could beat Wall Street. Only he couldn’t. As his unique trading system started to fail, Israel survived on a heady cocktail of prescription drugs and outright lies about his finances. Eventually he lost his grip on what was true and what wasn’t, and started to get conned himself.
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Circle of Greed – Patrick Dillon & Carl Cannon
Bill Lerach was once one of America’s top class action lawyers. Now he’s a convicted felon. Lerach made his name representing victims of corporate fraud in cases against big-name defendants like Enron, Disney, Apple and WorldCom. At some point along the way, Lerach was seduced by his opponents’ activities and started to defraud the justice system. Circle of Greed is the definitive story of Lerach and his misdeeds, told authoritatively by two Pulitzer Prize winners in a pacy, journalistic style.
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Flash Crash – Liam Vaughan
In May 2010, without warning, financial markets across the globe plummeted simultaneously. In the space of five minutes, they shed trillions of dollars in value. This ‘flash crash’ was the fastest drop in market history and, when share values rebounded less than half an hour later, experts were left shaking their heads. Luckily, Liam Vaughan is now here to fill us all in. Released earlier this month, his new book reveals how a bedroom-based trading prodigy called Navinder Singh Sarao made $70m in the noughties before electronic traders arrived and took away his edge. The Flash Crash is about what happened when he fought back.
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Bernie Madoff: The Wizard of Lies – Diana Henriques
You might recognise The Wizard of Lies as the name of a middling Robert de Niro and Michelle Pfeiffer film. Don’t waste your time on the movie – head straight to the book that inspired it. Award-winning New York Times reporter Diana Henriques serves up the definitive account of Bernie Madoff and how he built the world’s biggest Ponzi scheme. Of course, blame for the $65bn fraud falls squarely on Madoff’s shoulders, but Henriques also shines a light on those who enabled him, from timid regulators who had simply never seen anything or anyone like Madoff before, to investors who got a little too money hungry.
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Shredded – Ian Fraser
Fred ‘The Shred’ Goodwin is the rogue banker whose arrogance helped inflate RBS into the biggest bank in the world. When its bubble burst, it was down to the taxpayer to pick up the pieces. But Goodwin isn’t the only one in author Ian Fraser’s sights: in Shredded he takes aim at the colleagues who failed to rein him in, at the regulators who stopped regulating him, and the investors who urged him on. The latest edition of the book looks at what’s happened in Goodwin’s wake and whether his successors have managed to restore RBS’s reputation.
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The Match King – Frank Partnoy
A century ago, a Swedish construction magnate crossed the Atlantic and built the biggest financial empire of his era. But Ivan Kreuger’s Ponzi scheme couldn’t stand up to the 1929 Wall Street crash and neither could he. As the net closed in, he killed himself. Ever since his meteoric rise and fall, debate has raged about whether Kreuger was a chancer with a knack for self-promotion or a bona fide financial genius. In The Match King, Berkeley law professor Frank Partnoy tells his story and shows how he continues to influence unscrupulous financiers today.
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Flash Boys – Michael Lewis
No one studies financial wizardry like Michael Lewis. For Flash Boys, the author of The Big Short, Liar’s Poker and Moneyball turned his attention to high frequency traders (HFTs). Back in 2014, regulators were left hanging onto his coat tails as his latest book showed how stock markets were rigged in favour of HFTs who could effectively ‘front run’ the market. A millisecond had become a long time in trading and the eponymous flash boys realised they could use high-speed new tech to make billions. Lewis was the first to bring these deeply dodgy – yet ultimately legal – activities to light and show that, while some financiers might have learnt moral lessons from the 2008 crash, others had not.
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