Serpent on the Rock Read Online Free
should diversify their investments. The computer almost always said that a chunk of the clientsâ money should go into Pru-Bache partnerships.
Piscitelli never reviewed the dense, legalistic documents each partnership filed with the Securities and Exchange Commissionâhe had neither the time nor the desire. That was not his job. Instead, like most stockbrokers, he examined the sales material provided to him by the firm. That was supposed to summarize, in simple English, what the filings said. Then he passed that information on to his clients: The partnerships were safe investments, some as secure as certificates of deposit in the bank. Still, they paid a huge yield, often as much as 13 percent to 19 percent, with some of that money tax-free. Investors could scarcely resist that pitch. By 1988, Piscitelli had sold more than $9 million worth of the partnerships to his clients and friends. The sales material was so convincing that he even bought some for his own portfolio.
But by the late 1980s something terrible started to happen. The Prudential-Bache partnerships began to fall apart, starting with one of the biggest, VMS Mortgage Investment Fund. A real estate partnership, VMS Mortgage had guaranteed high income for three years and then return of the original investment. But instead it simply collapsed. The once-guaranteed income vanished, and most of the principal was lost. Suddenly some of Piscitelliâs friends were forced to take out second mortgages on their homes to continue their retirement. Piscitelli called Pru-Bache executives in New York demanding to know what was happening. His was one of hundreds of telephone calls from brokers around the country. Eventually New York stopped answering questions.
Piscitelliâs chest pains started soon afterward, followed by intense headaches. He took eight aspirin a day, but the headaches just grew worse. As other partnerships came undone, he spent his days dealing with angry clients while desperately trying to hold his own life together.
Friends filed lawsuits against the firm and Piscitelli. His constant anxiety destroyed his marriage. His annual income dropped to $20,000. A few anonymous telephone callers threatened to kill him. Fearful for his safety, Piscitelli purchased a .25-caliber pistol and a .357 magnum. He loaded them with hollow-point bullets and carried one of the guns at all times, ready to defend himself against his former friends.
By 1993, Piscitelli could no longer function in his job. He couldnât concentrate. He was always irritable. He frequently wept. That May, he went on disability leave. A doctor for Prudential would later diagnose Piscitelli as suffering a major depression caused by anxiety related to the partnership troubles. The broker could not overcome his sense of having betrayed his friends and of having been betrayed by his employer.
Piscitelli looked into the mirror. Tears were streaming down his face and onto the gun in his mouth. He was crying uncontrollably again. He took the barrel out from between his lips and wiped away the tears. Then he turned to put the weapon back into his closet.
He had put the gun in his mouth before. He was sure he would do it again.
Maybe, someday, the time would be right.
But not today. Not today.
SLOWLY, ALMOST imperceptibly, the truth settled in as the 1990s began. One at a time, until they numbered in the hundreds, then the thousands, then the hundreds of thousands, people in every state and around the world awoke to realize that they had been victims of the most destructive fraud ever perpetrated on investors by Wall Street.
Although the magnitude of the crime was unparalleled, it was not engineered by the shady penny-stock promoters or crooked savings and loan operators who exist on the underbelly of the financial world. Rather, the scheme emerged full-blown from the New York headquarters of one of the brokerage industryâs brightest lights, an investment firm with a name that
Piscitelli never reviewed the dense, legalistic documents each partnership filed with the Securities and Exchange Commissionâhe had neither the time nor the desire. That was not his job. Instead, like most stockbrokers, he examined the sales material provided to him by the firm. That was supposed to summarize, in simple English, what the filings said. Then he passed that information on to his clients: The partnerships were safe investments, some as secure as certificates of deposit in the bank. Still, they paid a huge yield, often as much as 13 percent to 19 percent, with some of that money tax-free. Investors could scarcely resist that pitch. By 1988, Piscitelli had sold more than $9 million worth of the partnerships to his clients and friends. The sales material was so convincing that he even bought some for his own portfolio.
But by the late 1980s something terrible started to happen. The Prudential-Bache partnerships began to fall apart, starting with one of the biggest, VMS Mortgage Investment Fund. A real estate partnership, VMS Mortgage had guaranteed high income for three years and then return of the original investment. But instead it simply collapsed. The once-guaranteed income vanished, and most of the principal was lost. Suddenly some of Piscitelliâs friends were forced to take out second mortgages on their homes to continue their retirement. Piscitelli called Pru-Bache executives in New York demanding to know what was happening. His was one of hundreds of telephone calls from brokers around the country. Eventually New York stopped answering questions.
Piscitelliâs chest pains started soon afterward, followed by intense headaches. He took eight aspirin a day, but the headaches just grew worse. As other partnerships came undone, he spent his days dealing with angry clients while desperately trying to hold his own life together.
Friends filed lawsuits against the firm and Piscitelli. His constant anxiety destroyed his marriage. His annual income dropped to $20,000. A few anonymous telephone callers threatened to kill him. Fearful for his safety, Piscitelli purchased a .25-caliber pistol and a .357 magnum. He loaded them with hollow-point bullets and carried one of the guns at all times, ready to defend himself against his former friends.
By 1993, Piscitelli could no longer function in his job. He couldnât concentrate. He was always irritable. He frequently wept. That May, he went on disability leave. A doctor for Prudential would later diagnose Piscitelli as suffering a major depression caused by anxiety related to the partnership troubles. The broker could not overcome his sense of having betrayed his friends and of having been betrayed by his employer.
Piscitelli looked into the mirror. Tears were streaming down his face and onto the gun in his mouth. He was crying uncontrollably again. He took the barrel out from between his lips and wiped away the tears. Then he turned to put the weapon back into his closet.
He had put the gun in his mouth before. He was sure he would do it again.
Maybe, someday, the time would be right.
But not today. Not today.
SLOWLY, ALMOST imperceptibly, the truth settled in as the 1990s began. One at a time, until they numbered in the hundreds, then the thousands, then the hundreds of thousands, people in every state and around the world awoke to realize that they had been victims of the most destructive fraud ever perpetrated on investors by Wall Street.
Although the magnitude of the crime was unparalleled, it was not engineered by the shady penny-stock promoters or crooked savings and loan operators who exist on the underbelly of the financial world. Rather, the scheme emerged full-blown from the New York headquarters of one of the brokerage industryâs brightest lights, an investment firm with a name that
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