A CLOSER LOOK AT THE "ROCK"
We appreciate your Oct. 2 clarification of certain statements made in "How greed poisoned Pru-Bache," the review of Kurt Eichenwald's book Serpent on the Rock, which appeared in the Aug. 14 issue. However, we are compelled to advise you that there remain inaccuracies in that item regarding our client, James J. Darr [who was the head of direct investment and other divisions at Prudential-Bache Securities Inc.].
Specifically, we refer to your statement that Eichenwald provided "details of three undisclosed land deals with guaranteed paybacks that Darr received from the sponsor of several limited partnerships he was charged with overseeing." This is simply not true. A reading of Eichenwald's book reveals not three land deals with alleged guaranteed paybacks, but, rather, one as to which the claim of a guarantee was made, and which was properly qualified by Eichenwald to show that other evidence exists that contradicts that claim.
Moreover, with respect to the statement that Darr's investments were "undisclosed," as you know from Eichenwald's book, Darr disclosed the investments to his boss and to the firm's general counsel. It was Prudential-Bache Securities' attorneys--not Darr--who had responsibility for determining whether such investments had to be disclosed in the prospectuses.
Davidoff & Malito
Editor's note: Eichenwald's book is ambiguous about how many land deals Darr invested in and whether he reaped outsize rewards in all of them. While Eichenwald clearly suggests these were intended as sweetheart deals, Perlmutter is correct that the term "guaranteed" was used only with respect to one.