Via Ben Smith at Politico, Ira Stoll, at The Future of Capitalism, reviews Christine Ward’s Confidence Game: How a Hedge Fund Manager Called Wall Street’s Bluff and explains how hedge fund manager William Ackman shook the Municipal Bond Insurance Association’s money tree with a little assistance from Marty Peretz, Eliot Spitzer, and Barney Frank. Money quotes (a few of them):
For public companies, the threat of getting Mr. Ackman and Mr. Peretz and their friends at the SEC, the New York attorney general’s office, and the House financial services committee on your case should provide plenty of incentive to manage your affairs super-carefully, if any such incentive were needed. And for private companies, the threat of being targeted by short-sellers and the regulators and press they bring in tow provides some argument for avoiding a public listing altogether.
As for those who have abiding faith in government regulation, beware. While the SEC was ignoring Bernie Madoff, it was busy investigating the allegations of Mr. Peretz’s friend Mr. Ackman, or at least coaching him that if he really wanted SEC action the key to it would be a front-page New York Times article. It’s not exactly the impartial rule of law as envisioned in a typical civics textbook.
