A Book Review of The Caesars Palace Coup: How a Billionaire Brawl Over the Famous Casino Exposed the Power and Greed of Wall Street (2021)
"Many shall be restored that now are fallen, and many shall fall that now are in honor." - Horace—Ars Poetica.
Thug (noun): "a violent, aggressive person, especially one who is a criminal." - Merriam-Webster Dictionary
Around 2009, I was a junior staff member at a major global investment bank and earned a big early promotion. After the promotion, I was invited to attend a special meeting. The firm's executive leaders met once a year in person at headquarters in New York for an all-day strategy session. It was basically a multi-hour debate about the future of the firm. I was to take notes.
On the top floor of a Manhattan skyscraper, the executives sat around the perimeter of a large, square conference table with its center cut out, allowing attendees to face each other across the open middle. From my perch at a side table next to the group, it was riveting to be a fly on the wall as the bank’s leaders plotted a way forward after the Global Financial Crisis. Most executives in the room that day, already at the pinnacle of Wall Street, have since moved on to lead other firms. One moment from that day stuck in my mind.
The group was discussing what to do about Goldman Sachs. Goldman was its rival in all things, and at the time, skated through the meltdown on Wall Street without as much trouble as competitors and with a lot of additional wealth.
In the room that day with me, one of the executives — a quietly intense, cerebral man with a sphinxlike demeanor not known for showing even an ounce of emotion — summed up his perspective on Goldman in a few unexpected words: "They are thugs. They are shrewd thugs, but make no mistake, they are thugs."
He then turned to me with a cold stare — the first time I'd even been glanced at all day — and said, "Don't write that down." Everyone else laughed. He did not.
I've thought about that moment often since then. The principal competitor to Goldman, who was no slouch at extracting wealth from markets, said what The New York Times, The Wall Street Journal, the Financial Times, and others wouldn't say so plainly. In a few years, the broader world would embrace that thuggish view of Goldman. And you can read about it in brilliant detail in books like Billion Dollar Whale (2018) (affiliate link) or in recent stories about its embattled CEO. Since then, Goldman's luster and stock market valuation have somewhat faded, sparked by ill-conceived and ill-executed strategic choices.
Reading between the lines in the business press daily then, I was less surprised with his opinion of Goldman than that he, a man almost immune to hyperbole and glib speech, said it so matter of factly. Perhaps it's helpful to remember the history and original meaning of the word "thug," i.e., before it was warmly used in rap songs as a sign of endearment or coldly repurposed as a racist figure of speech toward Black Americans. The term "thug" traces its origins to the Hindi word "ṭhag," which signifies a "swindler" or "deceiver." Historically linked to the Thuggee cult in India, known for their heinous acts of robbery and murder, the word was later adopted into the English language, evolving to its contemporary meaning of a violent or aggressive individual.
The way the word "thug" was used that day was the traditional dictionary meaning based on this historical context. However, the violence suggested was not physical but financial. He was not encouraging the firm to become thugs like their rival but to be wary of them.
I share this reflection not because the book in question is about Goldman. But because it's about another Wall Street firm that in the same period of American history looked like it could not lose, yet also found sharp rebukes in boardrooms and courtrooms and a partial comeuppance afterward: Apollo Global Management.
It seems you would have to be a poor reader, ignorant, or maybe an avowed thief to finish The Caesars Palace Coup (affiliate link) and not conclude that Apollo was a thievish organization. The book’s authors are the well-regarded journalists Max Frumes and Sujeet Indap. It is about how Apollo, a private equity firm, used a gargantuan amount of debt to overpay massively for the Las Vegas-based Caesar casino and entertainment complex on the brink of the Financial Crisis. Then, while facing default, tried to rob their creditors of their rights to take possession of the property. Some of those creditors fought back. The creditors’ lawyers summed up their perspective on Apollo in a 200-page legal filing from which Frumes and Indap quote and then spend the rest of the book essentially confirming. In that filing, Apollo is described as having perpetuated "unimaginably brazen looting and corporate abuse" that "devised a scheme to cheat creditors of their rightful recoveries." Moreover, "the fox has not only been put in charge of the hen house; it has barricaded the door and has even paid itself a salary."
Yikes. But also, excellent writing for a 200-page legal filing. More importantly, yikes.
Was Apollo shrewd? Not really. They come across as aggressive and relentlessly conniving but not that smart. Nor do their advisors. The book is essentially about ethically shifty wealthy businessmen trying to intimidate other wealthy businessmen through highly paid lawyers and advisors but finding out the quality of lawyers and advisors is often divorced from the size of their paychecks. Take this scene for example: There's one part about three-quarters of the way through the book where we learn a top executive at Houlihan Lokey, a preeminent firm in the field of corporate restructuring, under oath admitted he had no idea what the term "intrinsic value" meant and had never heard of Benjamin Graham and David Dodd or the book Security Analysis (affiliate link). If you don't know what I'm talking about, that's totally okay. You probably are one of my many non-finance friends or never worked on Wall Street and will still get a holiday card from me. But if you did work on Wall Street and rose to become the head of a powerful restructuring firm and don't know this — yikes.
If a book on this topic sparks your curiosity, I'd also recommend The Code of Capital: How the Law Creates Wealth and Inequality (2019) by Katharina Pistor (affiliate link). She provides helpful historical and analytical lenses about how private interests and public legal systems enable the creation and preservation of power. The philosophical treatise of her book aligns well with the anecdotes, interviews, and evidence that propel the narrative in Frumes and Indap’s story.
What is permissible in the world and passes as power and the law isn’t handed down from Olympus. It often isn’t even created by humanity’s wisest souls. It’s typically hacked together behind closed doors by people, too often men, using iterative relationship games, F.O.M.O., questionable interpretations of fine print, and social proof to intimidate other people into joining — or at least not interrupting — their schemes. Every now and then, however, we see the rare counter-power of fearless, truly great thinkers make hay of those shenanigans. This book tells such a story.
Godfrey M. Bakuli is the Founder of Pioneer Strategy Group (PSG), which offers expert strategic advice and actionable execution plans to R&D and marketing leaders looking to identify, de-risk, and launch innovative business ventures. He is also the Founder and Managing Partner of The Mutoro Group, an investment firm employing a patient, disciplined, and rational approach to fundamental value investing. If you’d like to learn more about Pioneer Strategy Group, please email us at info@pioneerstrategy.co or through the link below.