Black and White on Wall Street by Joseph Jett, with Sabra Chartrand. William Morrow, 387 pages, $25.
Remember Joseph Jett? He occupies a curious place in this decade’s pantheon of scandalous black American men. His 15 minutes of infamy occurred in April 1994, about two and a half years after Clarence Thomas’ confirmation hearings and two months before O.J. Simpson’s Bronco chase.
A 36-year-old bond trader at Kidder Peabody & Company, Mr. Jett was accused of defrauding his firm of $350 million. When I first read of Mr. Jett and saw a photo of him–with his bemused smirk and huge, James Baldwin eyes–I felt a perverse pride that a young buppie might be as bold a crook as Ivan Boesky or Michael Milken; and a sense of relief that here, for once, was a scandal about a black man that had nothing to do with sex. How wrong I was.
After five years and three grueling investigations, Mr. Jett has never been convicted of fraud. Moreover, his downfall offers a chilling case study of how machismo and sexual paranoia work in the financial community. At the center of his autobiography–co-written with Sabra Chartrand–is the story of what happens when some Wall Street traders renowned as Big Swinging Dicks find, in their midst, a Big Swinging Black Dick.
It’s the same with any my-side-of-the-story exposé–open Mr. Jett’s book and up pops the question: Is it credible? Quite.
Unlike a lot of memoirists, Orlando Joseph Jett (evidently, no one ever nicknamed him O.J.) does not present himself as a role model. His self-portrait reveals a man who is arrogant, avaricious, vindictive and status-obsessed, contemptuous of the poor and bereft of any sense of altruism or a social conscience. He is, in short, the quintessential Wall Street trader.
He was reared in Ohio, the son of a grimly driven entrepreneur who believed that the “only hope” for African-Americans “was in economic independence.” If the junior Mr. Jett has one salient conviction, it is that his race should be insignificant. “I’d chosen Wall Street as a career,” he writes, “precisely to avoid being judged by the color of my skin. Wall Street is a meritocracy–all anyone cares about … is the bottom line. How much money you make. Color, gender and age don’t matter when it comes to profit.”
Born in 1958, in the heyday of the civil rights movement, Mr. Jett grew up to believe that “affirmative action is living on your knees.” After earning two degrees at Massachusetts Institute of Technology and attending Harvard Business School, Mr. Jett lashed out at a minority recruiter from Shearson Lehman: “We’re always running around trying to find some white person to like us. It doesn’t matter. Let them hate. If I have the ability, I’ll still overcome.”
Indeed, Mr. Jett, in his professional life, never set out to win any Mr. Congeniality Awards. After turbulent stints at Morgan Stanley and First Boston, he joined Kidder Peabody as a trader of U.S. Government bonds. “I didn’t care about winning friends,” he declares. “I wasn’t about to accommodate anyone, to compromise my methods or objectives.” At Kidder, the central relationship of the book emerges, the one between Mr. Jett and his boss, Ed Cerullo, the embodiment of Wall Street’s macho social code. Athletic and ultra-competitive, Mr. Cerullo, interviewing Mr. Jett for the job, asked if he worked out and boasted of the laps he swam twice a day. Every winter, Kidder’s top traders were invited to Mr. Cerullo’s estate in Vail,Colo., to test their manhood on treacherous ski slopes.
Mr. Jett was wary of his boss from the start, but their relationship took a turn for the weird when Mr. Cerullo fired Mustafa Chike-Obi–Mr. Jett’s only high-ranking black colleague–for sexual harassment. Mr. Cerullo privately “warned” Mr. Jett about fraternizing with white females in the office. “The Kidder culture,” said Mr. Cerullo, “is particularly sensitive to issues involving black male sexuality and black male sexual aggressiveness.”
From that day on, Mr. Cerullo regularly hauled Mr. Jett into his office to inquire about the nature of his associations with certain white women. Even when Mr. Jett was seen going out to lunch with a white woman who did not work at Kidder, Mr. Cerullo lectured him: “I get reports about what you do,” Mr. Cerullo said. “If people cannot control their sexual aggressiveness, then I have to do something about it.”
A twisted variation on the Othello-Iago dynamic took hold, with Mr. Jett cast as the vulnerable Moor tormented by his crony’s insinuations. The bizarre thing is that there’s no Desdemona here. Mr. Cerullo’s insinuations are all about Mr. Jett, who consistently proclaimed himself innocent of any office dalliance: “I’m not trying to date her,” he said of one white colleague, in a typical defense. “I have no interest in her.” Instead of quitting or suing for discrimination, Mr. Jett attempted to neuter himself socially: “When a woman said hello in passing, I responded with a zombielike expression and a mantra: ‘Discipline must be maintained!’ and walked away.… I refused any interaction with the white women in the office.”
Yet, as Mr. Jett became more successful–earning $34 million in 1993 and being named Kidder Peabody’s Man of the Year–Mr. Cerullo’s warnings became more hysterical. Mr. Jett believes he was simply looking for a reason to fire a rival: “He wanted to get rid of me as soon as possible, and trumped-up charges of sex harassment probably looked like a tidy way to do that.”
Mr. Jett simultaneously sucked up to Mr. Cerullo and plotted to overthrow him. His fatal error, as he tells it, was getting involved in Mr. Cerullo’s scheme to wrest Kidder from its parent, the General Electric Company. In order to attract a buyer for the firm, “Cerullo was adamant that Kidder grow.” But G.E. had tight restrictions on how much Kidder could spend. “So we spent more than G.E. allowed,” Mr. Jett writes, “and then had to trick G.E. into believing that we operated within their guidelines.”
The details of this scam can be mind-boggling. “My explanations of my trading strategy sounded complicated and confusing even to me,” Mr. Jett admits. He calls it a shell game and insists that plenty of top guns at Kidder–first and foremost, Ed Cerullo–were in on it. But when the shell game resulted in a $350 million loss and G.E. was looking for someone to blame, guess which Big Swinger ended up on the chopping block?
Mr. Cerullo and the others claimed ignorance, and Joseph Jett was isolated, set up as a “rogue trader.” Summarily fired, excoriated in the media, he found himself under investigation by the Federal Bureau of Investigations, the Securities and Exchange Commission and the National Association of Securities Dealers.
The inquisitions soon turned to allegations about Mr. Jett’s sex life. The S.E.C. files on the case read like a G-rated Starr Report. Instead of fellatio and sex-toy cigars, the files chronicle “rumors” heard by a group of white male Kidder employees about Mr. Jett’s alleged affairs with white Kidder females. In a typically sizzling incident, while watching a movie with a blond colleague–outside the office–Mr. Jett “placed his hand on her knee.”
Ultimately, Mr. Jett was exonerated by both the F.B.I. and the N.A.S.D. The S.E.C. did not find him guilty of securities fraud but nailed him for juggling Kidder’s books. In the memoir’s final chapter, we find Mr. Jett working mainly as a manual laborer, for cash and food stamps. He owes an $8.4 million penalty to the S.E.C. and millions more in legal fees. Ed Cerullo, meanwhile, was allowed to resign from Kidder Peabody with a slap on the wrist and a $7 million severance package. Score one for Iago.
If it is impossible to like Joseph Jett, it is easy to pity him. He put his faith in the myth of the American meritocracy and wound up an embittered fall guy. He learned, rather late in life, that even in this oh-so-enlightened age of ours, America is not so much color-blind as blinded by color.