OFF THE SHELF
A Trader Who Swerved, and Crashed
By BRYAN BURROUGH
Published: June 30, 2012
THE first third of “Octopus,” Guy Lawson’s new book on the 2005 collapse of the Bayou Group hedge fund, is what you might expect: an engrossing tale of the rise of Samuel Israel III, a cocaine-snorting crook who started his firm in the basement of his Westchester County home. If the rest were simply the story of Mr. Israel’s inevitable fall, it would still be a darn good read.
But on Page 139, “Octopus” — to be published next week by Crown — takes a startling 90-degree turn into Crazy Town. By this point, in 2004, Mr. Israel, a trader whose main talent involved front-running the stock picks of far smarter men, has secretly run Bayou into a $117 million hole. He needs a fast hundred million or two to stave off collapse.
It is then, during a trip to London, that a mysterious stranger takes Mr. Israel, and the reader, on a bizarre journey down a multibillion-dollar rabbit hole. What follows is surely one of the oddest Wall Street tales I’ve read in 30 years, and it’s what transforms “Octopus” from a good book into a special one.
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