Arthur Levitt made the individual investor his passion during his eight-year term as chairman of the Securities and Exchange Commission. Taking the post after 25 years on Wall Street, he knew that investors were almost totally in the dark about how the stock markets worked and felt compelled to educate consumers about the long-standing collusive practices that cost investors millions each year. Now the ultimate insider continues his cause in Take on the Street: What Wall Street and Corporate America Don’t Want You to Know, What You Can Do to Fight Back, a startling behind-the-scenes book for anyone who has felt intimidated or baffled by Wall Street.
Levitt’s cautionary advice on mutual funds, analysts’ recommendations and financial statements boils down to a simple lesson: Ignorant investors are being bilked for every possible nickel, so the more you know, the better you’ll be armed to protect your precious savings. For example, Levitt advises you to fire your broker if you have less than $50,000 to invest, and no matter who handles your money, always ask: How are you getting paid? Much of the book details Levitt’s political and corporate battles as SEC chairman, and many of those same issues returned to the spotlight in 2002 with corporate meltdowns like Enron and WorldCom. Levitt recounts the controversial Regulation Fair Disclosure decision, which required companies to release important information to everyone at the same time, and the push for independent auditors and stock options accounting. Levitt calls his decision to back down on a 1994 proposal that would have forced companies to account for stock options on their financial statements the single biggest mistake of his career with the SEC. Hindsight may be 20/20, but for future investors, Levitt’s eye-opening revelations are sure to make navigating the minefield of hidden potholes on Wall Street a little easier.
