Frauds and Scandals

The story of Long-Term Capital Management, the Greenwich hedge fund run by John Meriwether's Salomon arbitrageurs and two future Nobel laureates, which lost $4.6 billion in under four months in 1998 and had to be rescued by 14 banks in a deal brokered by the New York Fed. It is the classic lesson in leverage, model risk and crowded trades.

The definitive account of the 1980s insider-trading ring that linked Dennis Levine, Ivan Boesky, Martin Siegel and Michael Milken, and of the investigators who unraveled it. James Stewart's reporting shows how the takeover boom turned confidential deal information into the most valuable commodity on Wall Street, and why compliance rules look the way they do today.

New Yorker writer Sheelah Kolhatkar follows the seven-year federal pursuit of Steven A. Cohen and SAC Capital, the hedge fund whose culture of edge shaded into black edge, Wall Street slang for inside information. The firm pleaded guilty and paid about $1.8 billion, but Cohen was never charged. It is the definitive account of modern insider trading and of what an information arms race does to a firm.

David Enrich's account of the Libor rate-rigging scandal, built around Tom Hayes, the awkward, brilliant yen derivatives trader at UBS and Citigroup who leaned on brokers and rival traders to nudge a benchmark behind trillions of dollars of loans and contracts. It shows how a flawed benchmark, bonus culture and lax oversight let manipulation become routine.

A history of the South Sea Bubble of 1720 that starts with Isaac Newton and Edmond Halley, not with the crash. Levenson shows how the quantitative thinking of the Scientific Revolution gave Britain the tools of modern finance, from life tables to tradable government debt, and how the same tools fed one of history's great frauds before they made the country rich.

The Wall Street Journal reporter who exposed Theranos tells how Elizabeth Holmes raised more than $700 million and reached a valuation of about $9 billion for blood-testing technology that did not work. A detailed case study of how a famous board, star investors and retail partners failed at basic due diligence, and how employees and one newspaper finally stopped it.

Two Wall Street Journal reporters trace how Mohammed bin Salman went from a little-known prince to the ruler of Saudi Arabia's economy, its oil company and its sovereign wealth fund. The story of Vision 2030, the Aramco listing, the Ritz-Carlton detentions and the Khashoggi killing, and of the bankers, consultants and investors who courted him.

The story of Navinder Singh Sarao, a West London trader who made tens of millions of dollars from his parents' house by spoofing the E-mini S&P 500 futures market, and who US prosecutors later linked to the crash of May 6, 2010. Bloomberg's Liam Vaughan uses the case to explain how electronic markets, high-frequency traders and regulators actually work.

Two Wall Street Journal reporters tell how Jho Low, a young Malaysian with a gift for networking, used the state fund 1MDB and Goldman Sachs bond deals to siphon billions into yachts, art, parties and The Wolf of Wall Street. It is the definitive account of the 1MDB scandal and a study of how banks, auditors and regulators let it happen.

Nick Bilton reconstructs how Ross Ulbricht, a 26-year-old libertarian, built the Silk Road, a dark-web drug market paid in bitcoin, and how rival federal agents, two of them corrupt, raced to unmask him. A true-crime story that doubles as an early case study in crypto payments, anonymity and the limits of both.

A former Bank of England regulatory economist and bank analyst sorts financial fraud into four basic types: the long firm, counterfeiting, control fraud and market crimes. He shows how each one exploits the trust that makes commerce cheap. Funny and analytical, it teaches finance readers to think like auditors and to see why every fraud eventually has to grow, or collapse.

Two Wall Street Journal reporters reconstruct the rise and collapse of Abraaj Group, the Dubai private equity firm whose founder, Arif Naqvi, raised money from the Gates Foundation, the World Bank's IFC and Western governments by promising profits and poverty relief at once. It is a case study in how an impact story can disarm due diligence.

A three-generation history of the Sackler family, from Arthur Sackler's pioneering drug advertising to Purdue Pharma's marketing of OxyContin and the legal maneuvers that protected the family fortune. For finance readers, it is a study in how a private, family-controlled company priced in legal risk, captured regulators and kept its name on museum walls for decades.

New York Times business investigations editor David Enrich traces how Deutsche Bank's push to become a Wall Street power produced two decades of scandal, from Libor rigging and Russian mirror trades to more than $2 billion in loans to Donald Trump. It is a case study in what happens when a bank's growth outruns its controls.

A Wall Street Journal energy reporter traces how Pacific Gas and Electric went from building California's power system to pleading guilty to 84 counts of involuntary manslaughter after its equipment started the 2018 Camp Fire. Utility investors and credit analysts get a detailed case study of deferred maintenance, regulatory failure and climate risk.

Two Bloomberg reporters reconstruct the 2011 attack on the tanker Brillante Virtuoso in the Gulf of Aden, the car-bomb murder of the surveyor investigating it, and the insurance fraud behind both. A true-crime story that doubles as a look at how shipping, marine insurance and the Lloyd's market can be gamed, and how rarely anyone pays for it.

Two Fortune reporters, one of whom had publicly questioned Enron's valuation months before its collapse, tell how Ken Lay, Jeff Skilling and Andy Fastow turned a Houston pipeline company into a trading giant propped up by mark-to-market accounting and off-balance-sheet partnerships. It is the definitive account of Enron and a primer on how earnings can be manufactured.

The New York Times reporter who led the paper's Madoff coverage tells how Bernie Madoff built a respected trading firm, ran a Ponzi scheme for decades and lost his victims about $65 billion on paper. Drawing on prison interviews with Madoff and more than 100 sources, it is the standard account of the fraud, the feeder funds and regulators who missed it, and the legal fight over who pays.

A Mississippi business reporter's account of WorldCom, from Bernie Ebbers's takeover of a small long-distance reseller in 1985 to the accounting fraud that ended in the largest bankruptcy in US history in 2002. It is strongest on the people and the small-town culture that let a deal-driven telecom giant hide billions in expenses.

The Financial Times reporter who exposed Wirecard tells how a German payments company inflated its business through partners in Asia, reached the DAX, and spent years attacking the journalists and short sellers who doubted it, until €1.9 billion turned out not to exist in June 2020. A first-hand account of a fraud that auditors and regulators missed.

Bloomberg investigative reporter Zeke Faux followed the money through the 2021 crypto boom, from Tether's opaque reserves and Sam Bankman-Fried's Bahamas penthouse to scam compounds in Cambodia. The result is a funny, skeptical field guide to how speculative manias draw in fraud, and to the warning signs that were visible all along.

An actor with an economics degree and a tech journalist set out to learn whether crypto was a scam and spend the book showing that it was. Built on interviews with Sam Bankman-Fried, Alex Mashinsky and Brock Pierce, it is a skeptic's field report on the 2020-2022 bubble and a clear guide to the leverage, hype and stablecoin games behind the crash.

The story of John Ackah Blay-Miezah, a Ghanaian con man who spent the 1970s and 1980s selling investors shares in a nonexistent fortune supposedly hidden in Swiss banks by Kwame Nkrumah. Yeebo's prize-winning account shows how a plausible story, official cover and greed for outsized returns kept an advance-fee fraud alive for two decades.

A 166-year-old Swiss bank ran out of trust before it ran out of capital, and former Wall Street Journal financial editor Duncan Mavin shows how. From Nazi gold and secret accounts to Archegos and the 2023 forced sale to UBS, it is a concise record of how weak risk controls, empire-building and a long run of scandals can destroy a global bank.

A former dealer's memoir of his friend Inigo Philbrick, the London and Miami art dealer jailed for an $86 million fraud, doubles as a field guide to art as a financial asset. It shows how fractional stakes, art-backed loans and private resales let one dealer sell more than 100 percent of a painting, and why an opaque, lightly regulated market let him do it for years.

The 1970s arson wave that burned the Bronx is usually blamed on tenants. Historian Bench Ansfield follows the money instead: insurance priced and sold so badly that a building could be worth more burned than standing. It is a sharp study of moral hazard, mispriced risk and an insurance industry that made its money investing premiums, with lessons for today's climate-risk insurance markets.

Former New York Times pharma reporter Gardiner Harris takes apart Johnson & Johnson's reputation product by product, from baby powder and Tylenol to Risperdal, Duragesic and metal hip implants. For investors it is a long case study in how a blue-chip brand can hide legal and regulatory liabilities for decades, and what that does to the value of corporate trust.

Michael Lewis spent about a year shadowing Sam Bankman-Fried before and after FTX collapsed in November 2022, and this is his portrait of the Jane Street trader turned crypto billionaire. It is a close-up study of a strange mind and a firm with almost no controls, and the most debated book of Lewis's career for how much benefit of the doubt it gives its subject.