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August 31, 2001

Back From the Brink: A Super Trader's Den of Thieves

By Brian O'Connell

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  • Back From the Brink: A Super Trader's Den of Thieves
  • Page 2

Donald Trump. Ivan Boesky. Boyd Jefferies. George Soros. T. Boone Pickens. Hugh Quigley.

Jim Salim rubbed elbows with all of them in his 30-plus years on Wall Street, trading everything that wasn't nailed down. Trading every market, every way, Jim Salim made, lost and was swindled out of fortunes.

Along the way he survived a bout with cancer and a near-catastrophic land deal that almost landed him in bankruptcy. With the publication of his new book, "The Great Wall Street Swindle," Salim (photo), still reputedly worth millions, sat down for an interview with Traders Magazine contributing editor Brian O'Connell.

Traders: You waited a long time to write a book and talk with the media about your years trading on Wall Street. Why?

Salim: I've had people try to get me to write a book for 15 years, egging me on all the time. But I always resisted. My point was that it had cost me $40 million over the years to gain the knowledge I had about how Wall Street worked. Why should I give it away for free? Then one night I had dinner with a friend; a non-trader who said that most people didn't know how to avoid being taken by brokerage firms and Wall Street. His comment hit home with me. I knew stuff that went on in Wall Street, knew how it worked, so I started thinking I should put it down on paper.

Traders: How did you get started in trading?

Salim: I was 19 and drifting around. My college roommate got a job at Merrill Lynch one summer and I started hanging out down there with him. I got hooked on the culture; the give and take between brokers; the tapes spitting out buy and sell orders. I figured that was for me. Before I knew it I was trading a lot and taking big positions and paying $5 million in fees alone to commodities and trading firms. But I started out with nothing in life and had no preconceived notions except that I loved trading and markets. If you told me then that I'd make millions trading stocks and commodities, and that I'd become a big corporate raider I would have laughed.

Traders: What's been the biggest change on Wall Street in the last 37 years?

Salim: Without a doubt the evolution and impact of computers. They've made the game much faster and opened things up for a lot of people. But computers have taken away much of the face-to-face, interpersonal aspect of trading that's so critical to cutting it as a trader. In my view, the business used to be a lot more honest and a lot more personal. Take analysts today. Some of the calls these guys make are outrageous. How can one percent of analyst calls be "sells"? That whole thing started when the investment banking types took analysts on sales calls to get investment banking business, making analysts tools of the investment banking firm. Analysts stopped doing hard work and became shills for investment bankers and their corporate clients.

Traders: You've gone to the mat with several big brokerage firms over front-running issues. What's your beef?