Striding barefoot through the fields of his farm in the Adirondacks, S.
B. Lewis, known as Sandy, is talking without pause, gesturing this way
and that in a soft summer rain.
That Mr. Lewis is in a rage is not unusual. A few days earlier, he had
watched as the computerized stock trading of Knight Capital ran amok.
“If Knight blows, six firms follow, and the whole corrupt thing goes
up,” he said. “Predator banks and hedge funds run the market for their
pleasure — there’s no rational structure, nothing!”
He is just warming up. News reports have revealed a world he knows
intimately. Goldman Sachs pays vast fines to avoid prosecution for
mortgage securities fraud. Barclays manipulates interest rates. The
Senate exposes HSBC as a racketeering enterprise, laundering money for
drug cartels. Banks are laden with bad assets.
And Wall Street, Washington, the press corps, everyone sits and stares like so many dumb cows.
“The complicity on Wall Street is sickness!” Mr. Lewis says. He fixes
you with his laser stare. “If you think the big firms are being honest” —
his tone slides streetwise — “well, sweetheart, go think something
else!”
The temptation is to dismiss Mr. Lewis, 73, as a crank, except he once
ruled as an eccentric genius of arbitrage, with a preternatural feel for
the tectonic movements of the markets. He has railed for decades about
venalities now on daily display. Rude truth is his currency.
He knows Wall Street’s heights. He helped hire Michael R. Bloomberg, and
he invested the money of two former Securities and Exchange Commission
chairmen, making a fortune in the 1980s. And he knows its depths, since
he pleaded guilty to stock manipulation in 1989, and was barred from the Street.
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