Deal, and Steal: Deceptive Accounting, Deceitful CEOs, and
D. Quinn Mills
by Financial Times Prentice Hall; ISBN: 0131408046
320 pages (hardcover)
by Thomas A. Buckhoff
2005 - In the aftermath of seemingly unending corporate scandals
involving grossly misrepresented financial statements that
have resulted in over a trillion dollars in market losses,
investors are left wondering:
Who took our money? Did some people get very rich off
I thought the system was supposed to protect investors—why
I thought CEOs of companies were supposed to make money
only if their shareholders did, but it didn’t work
that way. Why not?
What has been going on in the market? Will it continue?
Do I want to be in the market? If not, what else can I
do to build a retirement nest egg? Is there a safe way
to do it? Whom can I trust?
Is there any way I can get any of my money back?
above questions provide the framework for this book, which
is recommended for anyone who wants to be fully informed
about the risks inherent to investing in the stock market.
Mills’ position on the above issues is captured in
the following excerpt:
mislead investors, executives in large firms had to develop
compliant boards of directors and accountants, and banks
prepared to support their efforts; then they had to do
deals that would look good in their financials and get
approval from auditors and boards for misleading financial
reports. Finally, they had to cash in their options before
the frauds and other misrepresentations were discovered.
Hence, the title of this book: Wheel, Deal, and Steal.
support the above proposition, Mills sprinkles the book
with quotes from prominent players in the market, such as
former SEC chairman Arthur Levitt, who declared: “America’s
investors have been ripped off as massively as a bank being
held up by a guy with a gun and a mask.” Mills includes
295 footnote references, for readers who wish to verify
the evidence presented.
fraud begins with CEO pay packages that include stock options,
which mean that if the market price of a share increases,
so does the CEO’s compensation. Thus, there is enormous
incentive to move the share price up by any means possible.
To move the share price up, CEOs exploited their enormous
power and influence to compromise the independence and integrity
of the entities that had oversight responsibilities over
The securities industry. In order to obtain lucrative
investment banking business from CEOs, stock analysts
at investment banks recommended companies’ shares
knowing that they were of little or no value.
Boards of directors. Board members curried favor
with CEOs by approving exorbitant pay packages in order
to retain their positions as directors. Moreover, most
publicly traded companies’ boards are chaired by
either the current or former CEO—a convenient arrangement!
Accountants. The major accounting firms now generate
more revenues from providing consulting services than
from auditing services.
firms, such as Arthur Andersen, compromised the quality
and integrity of their audits in order to obtain consulting
fees from audit clients—or simply to retain the audit
fees, which can total tens of millions of dollars.
proposed solution: weaken the power of the “imperial”
CEO and strengthen the independence of the securities industry,
boards of directors, and accountants.
the book provides valuable insight into the inner workings
of our financial markets, along with recommendations for
fixing some of its flaws. Personally, after reading this
book, I changed my retirement portfolio to be less dependent
on the stock market.
A. Buckhoff, PhD, CPA, CFE, is an associate professor
of forensic accounting at Georgia Southern University.
review is adapted with permission from The Business
Report & Journal of Savannah, Ga., June 13–19,