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August 31, 2001

The Great Wall Street Swindle: A Legendary Trader Who's Seen It All, And Done It All, Now Tells It

By Brian O'Connell

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  • The Great Wall Street Swindle: A Legendary Trader Who's Seen It All, And Done It All, Now Tells It
  • Page 2
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by Jim Salim with R. Foster Winans.

(Xlibris, Philadelphia, 258 pages) $28.95.

reviewed by Gregory Bresiger

The professionals on trading desks are mostly con artists. They instinctively front-run and clean up for their firms. Listen to the stock recommendations of the analysts at the big firms, then go the other way. Penny stock tips, and penny stocks in general, are nothing less than scams. The corporate takeover craze of the 1980s was a very good thing because many of the target managements were weak and often cared little for shareholder values. Wirehouse brokers are mostly salesmen and not very bright ones.

And these are just some of the charges made by a well-heeled, professional investor who conned the con artists of Wall Street. Nevertheless, this book also details how he also shot himself in the foot several times. Jim Salim goes through the story of his investing life from his first exciting moment of discovering The Wall Street Journal as a child of Lebanese descent growing up in Natchitoches, La. He made his initial million investing on Wall Street as a young man, then lost it all just two years later at age 29. Salim has written, with the help of former Wall Street Journal columnist R. Foster Winans (Yes, the same one whose career as a Wall Street Journal Heard on the Street columnist was short-circuited by scandal), a compelling book with many appealing qualities.

The most creditable thing about the book is that the angry Salim names names, gives dates and goes through a step-by-step history of his triumphs as well as his investing disasters. For example, he despises Credit Suisse First Boston, claiming it lied to him on a golf complex deal in Arlington, Texas, in which they were partners. He has harsh words for Merrill Lynch. He practically calls for the abolition of penny stocks and warns that wirehouse brokers - with the exception of a few reputable professionals who Salim names - want to pick the pockets of the average investor and usually do it.

Wirehouse brokers, Salim argues in a complaint as old as Wall Street, are just salesmen who would try to sell the Brooklyn Bridge tomorrow if their masters told them to do so.


And then there are trading desks. Salim all but says they are congenitally incapable of honesty because they have a weapon that no regulator has figured out how to stop: front running.

"Front-running is one of the hardest swindles to prove because these enormous trading operations have customers all over the world, and they control their own paperwork," (page 95), according to Salim. "They've got a hundred ways to cover their tracks." However, in chapter 8, Salim details how he "swindled the swindlers" on buying and selling of May Petroleum, a story that makes for fascinating reading. In the end, Salim claims he made, "another ton of money" because of the duplicity of Wall Street.