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"Junk" Explains Wall Street Corruption Better than Most Newspapers Do
Written by Ayad Akhtar, directed by Doug Hughes.
Lincoln Center theater at the Vivian Beaumont, 165 West 65 Street, New York City.
Opened Oct 12, 2017; closed Jan 7, 2018.
Steven Pasquale as Robert Merkin. Photo by T. Charles Erickson.
I have been doing investigative journalism about financial and corporate corruption for 20 years. Ayad Akhtar's play is right on the mark.
It is based on the story of the corrupt junk bond trader Michael Milken. He got confederates to manipulate stocks so he could take over companies to loot and destroy them. It was a scandal of the 1980s. Too bad the market corruption he revealed never stopped.
But Akhtar gives you an excellent play-by-play. Better than what you might read in the press. Doug Hughes direction is a bit TV potboiler, but he nails it. So do the actors.
The Milken character is Robert Merkin (Steven Pasquale). He uses "creative financing" (junk bonds) to take over companies to "make them grow." It’s the "Merkin magic," to impose cuts, fire workers and loot the companies.
Merkin uses cash flow based on collateral of the companies he takes over. It’s a racket. Like the steel mill in Allegany, PA, he loads with debt and strips of assets. Surprise, the company collapses.
Teresa Avia Lim as the journalist and Michael Siberry as Leo Tresler, the investor. Photo by T. Charles Erickson.
The scam is being investigated by a Wall Street Journal reporter, Judy Chen (Teresa Avia Lim). Somehow, she doesn't nail him.
Savvy investor Israel Peterman (Matthew Rauch) has money in the Merkin deals. He, in his 60s to her 30s, hits on her: "Ever dated a man who flew you around on a private jet?" (He is a screamer; I don't like that about him either.)
Connected to all of this is a crooked stock broker (Ted Koch) who uses insider information to make big bets. He is a big fan of short selling. That is when a trader sells shares he doesn’t own and, under the rules, must buy them in the market and deliver them in two days. He says, "Nobody understands this shit. Nobody cares about it."
Because sellers sell shares they do not own and never deliver to buyers. That is called naked short selling. The stock price goes down, the company can't get loans and credit, other businesses won't deal with it. You haven't read about this in the papers? Oh really? Corrupt? You better believe it.
It's ignored by the SEC, whose regulations are full of loopholes. Why? Who do you think runs the SEC and the stock market? Is there a revolving door? Of course!
Wife Amy Merkin (Miriam Silverman) tells her husband to stop, says that the system is rigged for the old guard. It's true they don't ever get caught or jailed. She is worried about him.
Henry Stram, lawyer, and Rick Holmes as his client Thomas Everson, photo T. Charles Erickson.
There is also a good-guy, Thomas Everson (Rick Holmes), owner of a family steel mill that helped build the local town and pays workers fair wages. Where will that naïveté get him? Merkin will target him, take out a loan against his company. Then use short selling to destroy it! And he must contend with a mole who is selling him out to the Merkin group, which will later hire her.
Some 900 mill workers' jobs are destroyed. Big red furnace flames will die. Anybody care? Then, Chen the journalist writes a book. But you will see that it’s easy to buy such people off.
Akhtar shows how U.S. attorneys Rudi Giuliani and Preet Bharara used the scandals to promote themselves without targeting the real villains.
This play, presented as fiction and reaching an audience different than the financial pages, is an entertaining, important primer on how the system works.
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