DSL Prime Book Review:
Confessions of a Wall Street Analyst

Some of the confessions in this book concern activity that was clearly illegal and remains unpunished.

by Dave Burstein of DSL Prime and Future of TV [May 22, 2006]

The finest inside telecom book ever written
Everything you feared about Wall Street with all the details
Dan Reingold's Confessions of a Wall Street Analyst is by far the best insider book ever written about technology investing. Reingold was the world's #1 rated telecom analyst at Merrill and CSFB. He resigned two and half years ago when he reached fifty. He took an affiliation with Columbia U., and wrote a book loaded with bitter truth.

Dan, a straight arrow with a reputation for refusing to go along, "confesses" to personally being involved in many activities possibly legal then that today would more than raise eyebrows. He describes early information fed to Fidelity by MCI that let them dump the stock ahead of bad news, bankers at Merrill who wanted to go ahead with questionable IPOs, and a culture where the pressures are so high and the money so big almost everyone goes over the line.

I've reported many of the same stories, including the showdown between Nacchio and Trujillo at CSFB's $2 million investor conference, and can confirm many of the details directly. I didn't personally hear the conversations on Ivan Seidenberg's private jet or in intense meetings with Bernie Ebbers, but what Dan writes rings true.

He describes insider tipoffs that moved markets $14 billion on one transaction and several other examples that suggest Jack Grubman got off cheap with only a $15 million fine. He deplores sharp practices around Phil Anschutz at Qwest, who cashed out $1.97 billion, while Chairman. His CEO, Joe Nacchio, is about to go to trial, and Reingold has lots of evidence why.

I'm outraged the White House is giving his boss Anschutz, a Republican billionaire, a get out of jail free card. I separately caught Anschutz lying to the House Commerce Committee about his role, and am amazed that after a $5 million payment related to insider trading Anchutz is still running a public company.

Reingold also makes clear Gary Winnick's time at Global Crossing deserved a more aggressive prosecutor, although Winnick is a tough nut to crack. A friend at The Times asked me to see what I could find when Global Crossing went under, and the facts were buried under so much clever accounting I couldn't get close to the substance.

Reingold reviews some of the calls that made him famous (he picked the Bells when everyone else thought AT&T was the winner) and just as many of his mistakes, including some positive comments on Qwest and WorldCom that in hindsight were very wrong.

One he got right was a 1998 call that SBC was lying about competing out of district with the other Bells. Reingold accurately predicted that the initiative would disappear as soon as SBC got FCC approval to take over Pac Bell. To get the Ameritech merger approved, I've reported SBC similarly made false promises to D.C. December 2005, SBC formally committed to open access and net neutrality to get the AT&T deal done; just a month later, they are laughing at anyone who thinks that will be enforced.

Some writers, like Tracy Kidder in Soul of a New Machine and John McPhee writing about geologists, create books that fascinate even if your have no interest how computers are built or geological strata. The Reingolds (Dan and niece-collaborator Jennifer) don't reach that level, but everyone can benefit from his considered opinion that betting against those in Wall Street's "inner sanctum," is a "loser's game." Fourteen years at the top taught that to him and enabled him to donate his author's royalties to charity.

Copyright 2006 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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