Rogue BrokerLeah Nathans Spiro
THE PRU-BACHE MURDER
By Jeffrey Taylor
Harper Collins x 293pp x $23
The movie Wall Street is a cult classic among brokers for its dead-on portrayal of a brokerage firm in the roaring Eighties, peopled with avaricious hustlers, greedy customers, and invisible managers. The Pru-Bache Murder: The Fast Life and Grisly Death of a Millionaire Stockbroker describes a similar, but real-life milieu. Wall Street Journal reporter Jeffrey Taylor chronicles the life of Russian emigre Michael Prozumenshikov, who went from janitor to top broker generating huge commissions. After years of fleecing customers, he was killed by an enraged client, who hacked up his body and strewed the parts in a snow bank near Minneapolis.
Taylor tries to provide insight into Prozumenshikov by documenting--with pages of excessive detail--his lust for Rolexes and Mercedes, his workaholism, and life in the Russian emigre community. He's more successful at exposing the scams, which included loading up clients' IRAs with speculative stocks, churning stocks until a customer's accountant catches on, and leveraging clients' accounts by buying on margin.
What's most striking is how easily Prozumenshikov got away with it. He thrived at three major firms--Merrill Lynch, Drexel Burnham Lambert, and Prudential-Bache, now Prudential Securities. His supervisors were remarkably ineffective in stopping him from essentially stealing from his customers. Indeed, his high profits were rewarded. He regularly attended lavish sales conferences and got huge up-front hiring bonuses each time he moved.
While the Securities & Exchange Commission is now cracking down on so-called rogue brokers, The Pru-Bache Murder shows that rogues are anything but outsiders. They are created by the system, through very specific incentives.
Styling the book as a thriller makes Taylor too sympathetic to the murdered broker and insufficiently analytical about how he prospered so long. Still, many denizens and clients of Wall Street will appreciate this sordid tale of revenge.