The Torso Murders

by Lee Perry

  Bea’s briefings were for FBI agents and contractors only; her first guest speaker was a professor from Cornell University who give a lecture on the history of the stock market. Catherine did pay attention to the long and boring account that began in twelfth century France, but by the second boring briefing she discovered the hours passed more quickly if she worked on code while listening to the deadly dull details. Representatives from central banks and major exchanges gave the lecturers that followed and all described, in sentences drowning in admiring adjectives, how new digital creations had completely transformed the global stock market. She understood that Wall Street was an important resource for companies to raise money for expansion, product development and the like, what eluded her was how, over hundreds of years, the market maintained its dominance as the ultimate barometer for what the economics professor called social mood. She failed to understand how something as seemingly intangible as social mood or consumer confidence could make a country’s economy either soar or crash and burn. Her eyes briefly flicked at the podium below as Bea introduced her newest guest lecturer.

  He gave a slight awkward bow at the smattering of applause, “Good morning.” His grin was boyish as he connected his tablet to the wide, curved wall screen, “Three months ago, at nine-thirty in the morning, a software executive pressed a button at the New York Stock Exchange, triggering a bell that signaled the start of the trading day. Milliseconds after the opening trade, buy and sell orders flew through the market's servers. The trades were unusual in that they came in small batches of one hundred shares and within three minutes, the trade volume had more than doubled from the previous week's average. Complex computer programs deployed by financial firms bought undervalued stocks, and that unusual market move drove prices down and sold overvalued stocks as their purchases drove prices up. The algorithms… and human traders were making a killing.

  Within minutes, a wave of urgent emails inundated the inboxes of the top officials at the Securities and Exchange Commission. On Wall Street, officials at the New York Stock Exchange scrambled to isolate the source of the peculiar trades. While all this was happening, in the offices of a midsize financial firm called SAEx,” he said, pronouncing it SAX, “the Superior Alternative Exchange, panic was spreading. A program that was supposed to be deactivated had instead gone rogue, blasting out trade orders that were costing SAEx nearly ten million dollars per minute, and no one knew how to shut it down. At this rate, the firm would be insolvent within an hour. SAEx’s horrified employees spent nearly an hour digging through nine sets of trading and routing software programs before they found the runaway code and neutralized it.

  By then it was shortly after ten o’clock, and officials from the New York Stock Exchange and the Financial Industry Regulatory Authority were gathering for an emergency conference call that didn't end until after four o’clock that afternoon.”

  Catherine had looked up from her tablet, intrigued by the young man’s delivery. He was Brandon Kimura, the CEO of TIEx, The Investor’s Exchange. Publically, for the most part, he was currently hailed as the ordinary investor’s savior, and privately among traders and investment firms, he was condemned as the destroyer of Wall Street.

  “In the years since the collapse of Lehman Brothers drove the global financial system to the brink,” he continued, “new technologies have changed Wall Street beyond recognition. Today’s markets are wilder, less transparent and more importantly,” he jabbed a finger at them, “faster than ever before. Stock exchanges can now execute trades in less than a half a millionth of a second. That’s more than a million times faster than the human mind can make a decision.

  Today, financial firms use sophisticated algorithms that fight for fractions of a penny. Designed by computer nerds and math geniuses, these programs exploit minute movements and long-term patterns in the markets, buying a stock at a dollar and selling it at one dollar and one-ten thousandth of a cent.” He quickly clicked up a panel on the screen showing the math, “Do this ten thousand times a second and the profits add up. Constantly moving into and out of securities for those minuscule slivers of profit, the traders at these exchanges end their day owning no stock, but they’re a whole lot richer… and that is what’s known as high-frequency trading.

  This rapid turnover has reduced the holding period of a stock; half a century ago, it was eight years; today it’s about five days. High-speed trading algorithms are now responsible for more than half of US trading. Computer programs send and cancel orders endlessly with the infinite goal to deceive and outrace each other, or sometimes just to slow each other down. They might also flood the market with bogus trade orders to throw off competitors, or covertly liquidate a large stock position in a manner that won’t provoke a price swing. Investing today is about buying and selling a company's stock within a matter of seconds. Today, it’s all about how fast you can buy or offload it, not how much the company is actually worth.”

  Catherine could feel the tension that had built in the auditorium since Mr. Kimura began speaking, and she wondered how many of the agents and contractors attending these meetings had gone from being bored to death by their new assignment to living in fear of their own retirement accounts and stock portfolios.

  “Wall Street now lives in a brave new technological world, and the nation's watchdogs,” he ticked off the agencies on his fingers, “the Securities Exchange Commission, the Financial Industry Regulatory Authority and the Commodity Futures Trading Commission.” He chuckled, “There are more…” he waved a hand dismissively, “but I’m sure you have a list by now.” People laughed nervously and he grinned. “All these agencies are still behind the curve; time and again they demonstrate they are incapable of effectively monitoring, much less regulating, Wall Street. Remember back in 2008 when regulators realized, way too late, the danger of securitization? Well, it’s happening again, people… and the financial computer geeks are again way, way ahead of the game.”

  Millburn, NJ

  She playfully swept the petite form into her arms and tossed Catherine easily onto their bed, “Jenga!” She flopped down next to her, “I win!”

  “I know!” She swatted at her, “I got Jenga’d all over the place; you and Cam double-teamed me tonight.” She rolled onto her side, facing her, “That was fun; I never played Jenga as a kid.”

  “Me neither,” Jordan sat up and turned off the lamp on her nightstand, “I love it when Cam laughs that hard…”

  They scooted under the covers and Catherine snickered, “I know, I love those deep belly laughs.” She pressed close, “I was just glad he didn’t barf his dinner.”

  “Always a plus.”

  A comfortable silence fell between them until Jordan yawned and mumbled, “I forgot to ask you how Bea’s briefing went.”

  “Actually, it wasn’t bad today. The Cornell professor had the most boring delivery, the guys from the stock exchanges all think everything is just peachy and we should keep our meddling government hands off of everything…” She shifted her head back onto her pillow so she could look at her in the darkened room, “But this guy today, he explained high frequency trading by telling us a story that was…” she shrugged, “well, it was exciting. He gave us a blow by blow account of one of the flash crashes Bea tried to investigate.”

  “And?”

  “It was interesting. Some of these guys from the central banks have admitted there are problems with the high speed trading but then in the same breath kinda’ shrug their shoulders as if to say, but there’s nothing anybody can do about it. This guy, Brandon Kimura, used to work for a Canadian bank and really took a big risk by starting up his own exchange. I did a little research on him; people are calling his exchange the first honest exchange for investors because he figured out a way to slow down the digital market.”

  “But why does slowing it down make it better?”

  “Because it makes the stock market fair, if traders can’t get a heads up about buy or sell prices ahead of the investor the predatory c
omponent is eliminated.”

  “And that’s good for investors?”

  “Oh yes, good for investors, good for retirement and pension programs, and good for businesses too.”

  “That’s good, but it still sounds boring.”

  Catherine chuckled low in her chest and pressed close again, “Wanna’ do something that’s not boring?”

  Jordan slid her arms around the slender form and pulled her close, “Why Doctor Bernard, whatever did you have in mind?”

  Jersey City, NJ

  She looked over her shoulder at the laptop that lay in an evidence bag on the backseat, “It’s possible he has something hidden online I just haven’t found yet.”

  Jordan shook her head, “I don’t know, it looks like his life was as clean as his car and townhouse. If this isn’t organized crime then it either has to be a co-worker or pissed-off customer. The warrant covers everything he worked on at the exchange.”

  “Will it cover making them let me see their algorithms?”

  “No, but if they’ve wiped his workstation out of a proprietary sense of company privacy then I’ll be able to lower the boom on them for impeding a murder investigation and maybe you’ll accidentally find something… I have a warrant in my bag for that too.” She looked briefly from the road ahead and flashed a smile, “We can’t help it if the victim hid company code in his files… maybe you’ll get lucky...”

  “So you’re expecting trouble?”

  Jordan lifted a shoulder in a half shrug, “Given what I’ve read about the stock exchange culture so far I thought I’d better cover my bases so I can save time if The Powers That Be feel their panties twisting in a knot.” Catherine chuckled and she pulled the bureau car into the underground parking garage. “Still trying to get a look at the code these exchanges use?”

  “Yeah,” she sighed, “at the moment Bea’s group is arguing over whether high frequency trading is worse than dark pools.”

  Jordan parked and they got out, “You mentioned dark pools before…”

  “It’s a private trading forum used by financial institutions…”

  “Like banks.”

  “Yes, like banks and private brokerages that trade stocks away from the public.”

  “Who do they sell to?”

  “Their own customers, their investors love it because their transactions won’t affect the market. But if no one outside the pool can see the trade, the prices, then there’s no transparency.”

  “And investors can get screwed.”

  “Precisely.”

  They took the elevator to the sixth floor of the Getchell Exchange. The doors opened to a lavish reception area, and Jordan smiled at the expensively coiffed and dressed young woman behind the gleaming glass desk.

  “Hello,” she greeted them austerely, “how may I help you?”

  “Hello,” Jordan smiled pleasantly and flashed her badge wallet, “a Mister Matthew Peterson is expecting us.”

  The young woman’s face paled when she saw Jordan’s FBI badge and ID, but she recovered quickly and pressing a button on her multiline phone, pressed a finger against the earpiece in her ear and murmured, “Mister Peterson, the FBI is here to see you.”

  Jordan slung the bag from her shoulder and dropped it on the glass desk, rummaging within for the first warrant. The receptionist flashed a disdainful look and Jordan gave her a small reassuring smile and wink. Catherine noted the exchange and suppressed the urge to snicker; she loved people’s reactions to Jordan’s badge and she looked past the receptionist and through the glass wall behind her. Her view was limited to a sea of cubicles and she watched as a tall man in a suit suddenly appeared in the hallway, heading toward them.

  He pushed his way through the glass door and extended his hand, “Hello, I’m Matt Peterson, Vice President of Sales…”

  “I’m Special Agent Jordan Hawkins,” she shook his hand and gestured to Catherine, “And this is my associate, Doctor Catherine Bernard.”

  He reluctantly shook her hand and his eyes narrowed, “An associate in what capacity?” He looked from Catherine to Jordan and she groaned inwardly.

  “In a digital capacity, Mister Peterson.” She handed him the warrant, “This gives us access to everything our murder victim, your employee Paul McConnell, ever worked on.” She gestured past him, “Shall we?”

  He eyed the subpoena suspiciously before taking it from her and opened the glass door again, “After you.”

  He led them to Paul McConnell’s cubicle and Catherine sat at the dead man’s desk and noted the computer was already running, “Your workstations are never powered down?” She turned to him and Jordan felt a red flag snap when he looked away.

  “I think most of the employees here do not shut them down, no.”

  “Hmm,” Jordan nodded thoughtfully, “now that is surprising,” she said, her tone dripping with sarcasm, “considering how long Mister McConnell’s been missing.” There was a file box on his desk and she pointed at it, “And what’s in there?”

  “His personal belongings,” he shifted uncomfortably, “We didn’t know what to do with them and thought you’d take the box.”

  “Thanks, but I’ll still need to check his desk drawers.” She looked past him, scanning the large room, “And I need to speak to Lester Morris.”

  “I’m Lester…” A young man popped up from the cubicle behind them.

  She held up her badge wallet, “I’m Agent Hawkins… you contacted Mister McConnell’s parents?”

  “Yes.” Lester Morris appeared to be in his late twenties, early thirties, “I didn’t think anything for the first couple days ‘cuz he’d taken a long weekend before.”

  “Was that a common practice for him?”

  “No,” he scoffed, shrugging, “he liked work, but Paul was popular with girls, you know?” He looked away and shook his head.

  “So when was the last time you saw him?”

  “Two Friday nights before last,” he said, his eyes beginning to brim, “most of us go out after work and celebrate the end of a good week.”

  “And where did you go?”

  “The Devils’ Due.” He indicated the general direction with his chin, “It’s a bar a couple of blocks from here.”

  “Excuse me.” Catherine interrupted softly.

  Jordan turned to her, “Yes?”

  “It would appear the hard drive has been scrubbed.”

  Jordan looked from her to their escort; her brow arched, “And is that standard procedure when one of your employees has been murdered?”

  Peterson looked both uncomfortable and annoyed, “We had no idea what happened to him at that point, he left on a payday… employees have left with no notice before. If he left to work for a competitor we needed to make sure he couldn’t access his workstation remotely.”

  Jordan turned back to Lester, “This is quite a paranoid industry you work in.”

  “You have no idea…” He snorted and when he caught the disapproving glare of his Vice President of Sales, he hooked a thumb over his shoulder, “I’d better get back to work.”

  “I just wanted to let you know,” Catherine dug a flash drive from her jacket pocket and inserted it in a USB port, “before I retrieve the data…” Her voice faded as her fingers once again flew over the dead man’s keyboard.

  “Hey now, hold on a minute!” Peterson stepped forward, “You cannot directly access our primary servers!”

  Jordan had pulled out her second warrant, “This is a murder investigation, Mister Peterson,” She held it in front of him, preventing him from entering the cubicle, “and this warrant gives us the authority to access any and all the information we need to find Mister McConnell’s killer.” She smiled pleasantly, noting privately how sweat beaded on his upper lip. “Take the warrant so you can show it to your supervisor.”

  He took it from her and placed it on top of the first one she gave him. “L-look…” He stammered.

  “All done.” Catherine said brightly.

  “Re
ally?” Jordan turned back to her.

  “Yep, I sent the recovered data to the FBI.” She stood, “I’m done here.”

  New York City, NY

  “There’s just nothing…” She shrugged and dropped her hands on her desk, “he didn’t even have any company software hidden away for me to play with.” She sighed and leaned back in her seat, “Although I guess a trader would have little reason to have access to that.”

  Jordan had pulled everything out of the box of personal items recovered from Paul McConnell’s desk and she quickly stacked everything back inside, “Trying to find something for Bea’s project?”

  “Yes, she can’t make them show us their code, but it would have been nice to have a peek.”

  “He had an impressive string of ex-girlfriends,” she grunted softly, lifting the file box and shoved it under her desk, “but all his emails make it clear they were just convenient hook-ups.” She sighed expressively, “And he kept nothing in his cubicle except pens, a calendar, and a few porn magazines and DVD’s.”

  “Really? Porn… at work?” Jordan gave her a look. “Oh yeah…” She blushed, “I forget how guys are at work. It would have been easier if he had stashed away notes from a stalker or something, huh?”

  Jordan snorted, “It would’ve.”

  Paul McConnell did what most people did, he kept a folder in his work email full of user names and passwords for everything he did online; personal email accounts, social media and sites he regularly made purchases from and Catherine had neatly arranged his work, private and social lives in a chronological stream of data on her screen. “You’d think he’d have been more careful.” She scanned the files one more time, “He kept a folder for all the times he was hacked and what passwords he used so he wouldn’t use them again.” She frowned, “And then he kept them and all his current ones online… how dumb is that?”

  “Well,” Jordan sighed, shrugging, “that probably happens more than you’d think.” She craned her neck, feeling the vertebrae pop and leaned back in her chair, closing her eyes, “McConnell pulled in more than three million last year, including bonuses. I’d say that’s pretty damn good for a twenty-seven year old stock trader. He had ordinary credit card debt, a nice townhouse in the suburbs… Nothing indicates he was into gambling. Nothing suggests he was involved with organized crime.”