FORTUNE — For those of us who still read newspapers, the last few days have brought useful insights into how Wall Street really works. We learned, for instance, that the SEC fined the New York Stock Exchange a token $5 million over charges that certain NYSE customers had been given “improper early access to market data.” Shock! Horror! At the other end of the scale, a story out of London focused on a stock trader who allegedly created fictitious clients, then doctored documents and invented profits that turned into $2.3 billion of losses for his firm, the Swiss banking giant UBS.
If this stranger-than-fiction stuff is your cup of tea, you’re going to love Black Fridays, a novel by Michael Sears, a 44-year-old one-time actor who spent 20 years as a trader at Paine Webber, Jefferies and other firms. The book contains all of the above plus a drowning, a kidnapping, several murders, hard-nosed FBI agents, and a few features not found in the newspaper stories. Notably, it makes sense, features characters with redeeming qualities, and has a relatively happy ending.
The book gets off to a fast start. A former trader named Jason Stafford has just checked out of prison, having served two years for the kind of accounting hocus pocus that’s all too common on the Street. But Jason’s timing was bad. His firm was losing money when his missteps surfaced, and the feds needed a poster boy to send to jail to show the world they were on the case.
Back in New York, Jason finds things pretty much as he left them, except that his former wife and five-year-old son are gone. So are the funds he had stashed away before he went to jail, a bummer because the terms of his parole rule out active involvement in the stock market.
Just when it looks like the bottom is about to fall out, Jason gets a call from the CFO of Weld Securities. The SEC is looking into the activities of a young Weld trader who drowned in an apparent boating accident. Before he hands over the trader’s records, the CFO wants to be sure no one else at the firm is involved. He needs a consultant who knows all about trading scams.
You know the rest. Jason takes the assignment. As he digs into Weld’s trading records, he discovers one bad apple after another. Everyone is up to something that doesn’t smell right. There are client-paid trips to nearby casinos where everyone comes home a winner. There’s a small offshore hedge fund that makes more trades than its size would suggest. There are women and parties, a laptop with coded information and a rogue ex-cop. As Jason closes in on possible answers to the CFO’s questions, obstacles emerge. Some of his sources clam up, others vanish, and one gets hit by a train.
Black Fridays is a great read. It’s also a window into a fascinating slice of Wall Street. Jason’s success as a trader stemmed from the fact that he could see patterns in numbers, but every trader has a system of his own. Position traders rarely trade, Jason tells us. They sit pat for hours, days, and even weeks, waiting for the sea change that will produce a home run. Spread traders look for anomalies between markets, buying one security and simultaneously selling another. Day traders play the game by scalping, relying on “a combination of luck and an ability the read the psychology of the market, moment to moment.”
Back in his trading days, Jason took home his first $10 million bonus when his group made all the right moves and scored a $200 million profit on the 1999 euro conversion. His downfall came years later when he put the wrong date on a transaction ticket. The computer, assuming Jason knew what he was doing, assigned the trade to the following year. The error resulted in a big profit.
When Jason realized what had happened, his group was having a bad day, so he let it ride, figuring he’d fix things on a good day — which, of course, never came. This was followed by more misdated trades. Jason wound up in jail and his boss, who knew what was going on, resigned, leaving the firm with a severance package “big enough to buy a small country.”
There’s more to Black Fridays, lots more, including an unexpected and illuminating look at autism. Jason’s son never cried as a baby, was slow to walk, screamed at the slightest provocation and bit everyone in sight. Jason finds his son, who is living with his grandmother in Louisiana, locked in a room to keep from hurting himself, and brings him back to New York. Thus begins Jason’s — and our — education into what autistic children are like and how, with the proper care, love and attention, they can be eased into a mainstream existence.
Jason Jr. — he’s called the Kid — is fascinating. He knows everything about cars and regularly delivers in-depth reports on automotive studies he has seen or heard. He also has a strict dress code. On Fridays he will wear only black, which probably has something to do with the book’s title. Then again, maybe not. Black Fridays are what follow the Thursday night bacchanals that are part of the Wall Street scene.
Whatever. What’s important is that Black Fridays is a book you’ll enjoy and remember. On that score, Jason Stafford is reportedly at work on a new assignment that will be covered in an upcoming book. Stay tuned.
Our Weekly read column features Fortune staffers’ and contributors’ takes on recently published books about the business world and beyond. We’ve invited the entire Fortune family — from our writers and editors to our photo editors and designers — to weigh in on books of their choosing based on their individual tastes or curiosities. Lawrence A. Armour is deputy editor of custom content for Fortune
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More Weekly Reads
- Errol Morris’s A Wilderness of Error
- Kurt Andersen’s True Believers
- Hanna Rosin’s The End of Men
- David K. Randall’s Dreamland
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- Ken Bain’s What the Best College Students Do
