Tuesday, August 07, 2007

Dirty Little Secrets of the Record Biz

Hank Bordowitz has written: "Dirty Little Secrets of the Record Business: Why So Much Music You Hear Sucks".

Published this year, "Dirty Little Secrets..." is full of worthwhile information and lots of laughs, too (light and dark). The author synthesizes analyses of the many elements of what is a multi-tentacled story into a cogent, satisfying, whole. The book's provocative title may lead to wrong assumptions - that this is a sensational expose lacking veritas and offering bleakness rather than solutions. Not so, it's a plain-talking look at the "biz" written by someone who loves music. It deserves to be read by any and all who care about the subject.

"This is the book that any one who once did time in the music business wish we had written," says Hugo Burnham, drummer for the Gang of Four (who's also served as an artist manager and in major-label A&R). A mentor to me in this crazy business, Jack Ponti (songwriter, producer, manager and record exec) says: "Brilliantly written, insightful, a good history, and a great read."

Agreed. It's a great read.

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And you may ask yourself, "How did I get here?"

There's no short answer.

Before returning, in the late 1990s, to my primary passion in life, music, I enjoyed a lengthy career as an investigator. I exposed the culture of crime and corruption all over the world - mostly in Canada, my home and native land.

My last big case file was that of YBM Magnex International Inc. and its web of white collar, and Russian, organized crime. YBM, which claimed to be a marketer of industrial magnets, was valued at close to CDN $1 billion on the Toronto Stock Exchange when I began my research and writing. I revealed that, rather than being a tremendous corporate success, YBM was actually a giant fraud. A former Premier of the province of Ontario, a Vice-President of Canada's largest independent brokerage firm, and other prominent business players on YBM's board served, effectively, as fronts for profiteering and money-laundering by figures linked to the biggest and most dangerous Russian mafia networks.

There's not one common repository for all that I wrote about YBM Magnex. It's a big, sprawling story. Numerous essays were published in 1997/98 on a website that I took offline before this millenia. There were also quite a number of articles I penned for a Canadian trade publication called Canada Stockwatch. Finally, there was a multi-part feature that appeared in The Vancouver Sun newspaper.

Some of my reportage on YBM Magnex remains cached in cyberspace thanks to the Wayback Machine and archives of various financial forums (eg. Silicon Investor), newsgroups, and major media publications.

One finds years of coverage in newspapers and other media that followed my YBM reportage of '97/'98. The scandal - involving godfather Semion Mogilevich, "The Billion Dollar Don", and his network - spawned lawsuits, criminal charges, government regulatory hearings+ - all of which earned extensive, international, press coverage.







From 1986 until 1995, I researched and/or wrote, primarily, for print publications around the world - newspapers and magazines including a range of Canadian journals such as The Globe and Mail, The Financial Times, Equity - and others more distant including The Observer (London), The New York Times, The Washington Post, Forbes and Barron's. Though largely in print, I also worked in broadcast media - researching documentaries for the BBC, Channel 4 in the UK, ABC in Australia, ABC-TV and CNN in the U.S., and, home in Canada, for the CBC's Fifth Estate and CTV's W5 investigative tv programs.

From 1995 to 1998, I created one of the first, and most detailed, investigative journals on the internet. "Back in the day", this was more like posting a book online. My YBM Magnex web-text alone was over 50,000 words - and no flash, and no graphics. Just laborious HTML-tagged text.

Writing online now is much faster and more simple! Witness the fantastic growth of the online community, of bloggers, podcasters and more. When I first launched a blog in this new web-savvy age, a year or two back, it combined my interests - music and investigative research. After looking at one specific recording industry hoax, I decided that was enough - I didn't get back into music to talk about the endemic rot of the industry. I've seen and written enough of the 'dark side". Music, for me, is about beauty and honesty. That's become my preferred focus since about 1999.

For now, if you've a taste for stories like YBM Magnex, here's a page that contains a nice mix of items - a few by myself, and a few by other investigative writers. It's the reporter's equivalent of a mixed-tape or CD song-sampler: Russian Mafia

Here, below is the intro that appeared online in 1998 to:

The Magnex Files

- Eternal Russia. The soul of this country is so deep, the beauty it can create so powerful, perhaps unique in the world. But there is always that other dark, brooding, violent and greedy side that is never far from the surface.

Jennifer Gould -- Vodka, Tears, and Lenin's Angel

The strange case of YBM Magnex International, Inc. is the most extraordinary I've ever investigated. A study of YBM is extraordinary in that it so clearly reveals the essential nature of Canada's stock markets.

The articles on this web-page will, hopefully, shine some public light into corners of the most bizarre affair, and the case most graphically illustrative of the nurturing corporate culture, encountered in close to 20 years work, much of it exploring the dark underworld of Canada's junior financial markets.

The saga of YBM Magnex began to receive expansive coverage through such regional U.S. newspapers as The Bucks County Courier Times, The Philadelphia Inquirer and The Philadelphia Daily News in mid-May 1998. The first American print journal to give extensive national coverage to related subject matter was The Village Voice with its publication of Robert Friedman’s May 26 1998 cover story, “The Most Dangerous Mobster in the World”. However, word of the criminal activities of Russia's Semion Mogilevich (and the alleged use of Arigon/YBM as a money laundering conduit by the Russian mafia) was widely accessible long before May 1998 on the internet and in European print journals. As early as 1995/96 newspapers and magazines in Czechoslovakia, Hungary and countries formerly of the Soviet Union, carried details of such activities. By at least 1997 (and likely earlier) various news articles and police intelligence reports were accessible on-line to anyone with an internet connection.

On this, my own, web-site I began publishing analyses of the YBM Magnex scam in March 1998 (following the first stock market exposes of YBM which appeared in Canada Stockwatch). In April 1998 I alerted virtually all major Canadian media outlets to YBM’s Russian mafia links (including Mogilevich and another “godfather”, Sergei Mikhailov). The story gained international attention when dozens of U.S. federal agents raided YBM’s Newtown, Pennsylvania headquarters on May 13 1998. Within days of the raid, the YBM story (and the history of Mogilevich et al in the U.K.) appeared on television news, and in newspapers and magazines around the world - from London’s The Observer and The Financial Times to Hungary’s HVG and The Financial Post and The Globe and Mail in Canada.

In the mid-1980s, I'd received multiple Western Magazine Awards for my feature writing on scams and scammers. In May of 1999, David Baines, a reporter with The Vancouver Sun newspaper, and I received a National Newspaper Award - Canada’s top print journalism award) for our breaking coverage of the YBM-Russian mafia story.

In handing out the award, the NNA noted:

The Vancouver Sun’s David Baines, working with freelance securities investigator and writer Adrian du Plessis, unraveled the intriguing tale of YBM Magnex International Inc., the Canadian company that operated as a money laundering vehicle for the Russian mafia. The Sun began its early work on the company’s murky business dealings and links to organized crime even as investors were driving its share prices to record levels on the Toronto Stock Exchange. Judges called it a thoroughly comprehensive effort that combined extraordinary initiative, research, analysis and writing.”

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