She introduced herself. “I’m sorry to bother you, but you do look familiar. Are you with the firm?”
“Shareholder,” I said, folding my arms over the credentials hanging on my chest.
For the briefest moment, I was sure she was going to sit down next to me in my dim corner. She thought about it. I could not afford to be recognized by anyone. Not yet.
“What’s your prediction on today’s vote?” she said.
“They’re paving over the wetlands,” I said. “If they pave over all the wetlands, we won’t have any crabs and we’ll have to make our crab cakes with extruded fish paste. It’s un-American.”
There’s one—or more—at every public meeting. The certifiable crank, who may or may not be mad but is certainly angry. Angry about something and who is willing to talk about it at great length, usually in front of a microphone, if they can get near one.
It worked. “Sorry to bother you,” Rebecca said, moving away quickly.
Many of the shareholders made a pass by Virgil to shake his hand and make noises of support and encouragement before going off and finding a seat. And there were also some who avoided Virgil altogether. Tim Boyle, whom I had last seen on Bloomberg TV at the beginning of the week, was in the second row on the aisle. He had visited briefly with Virgil before sitting. The only shareholder that I knew personally was Ahmad Din. He managed a global equity fund. We had done business together in the past when he had asked for help hedging his foreign exchange risk. We had been friends. I had toasted him at his wedding.
I got up when I saw him come in and headed him off. I needed to be sure he wouldn’t out me if he saw me hiding in the corner. “How are the markets treating you, Ahmad?”
He showed no reaction. He saw me. He heard me. But it was as if I had not spoken. As though I didn’t exist. He walked by me and found a seat in the row behind Boyle. I was used to those snubs, and sympathized. My presence was a reminder of a broken trust. I went to jail and lost my career. He lost faith in a friend he had once valued—me. Maybe his pain was greater.
But I was no longer worried about him greeting me loudly across the room. I tried not to slink as I walked back to my seat.
At one minute to six, the few invited staff members came in and took seats in the farther reaches of the room. They were only there to make the crowd seem larger—and to applaud at the right moments. Senior executives filed in next and filled in the reserved seats in the front row on the opposite side of the room from Virgil and his family. Some of them gave him a wave or a smile as they went by, but none went over to chat or to shake his hand. Finally, the board members arrived and marched straight to the front of the room. Nealis was last. He was so wired, he practically glowed. There was a sudden tension in the room that had not been there a moment earlier. His pose as the reluctant replacement did not dispel the feeling that, in this small world, something momentous was about to happen.
Everyone took their seats and the sounds of murmured conversations and papers being rustled resolved into a taut silence.
Nealis opened the meeting with a joke. Something about golf and markets. It wasn’t a very good joke and he made a dog’s breakfast of it with his delivery. He had read the room all wrong. They weren’t there to laugh.
“I know this meeting is spartan by Wall Street standards. But we’re not here for ostentatious celebration. This is a solemn occasion. There are weighty matters before us. Champagne and rock stars would be inappropriate. All I can say, though, is stick with BFG. We’re going to get there.”
He had recovered. He introduced everyone on the stage before launching into the numbers. It was a formality only. Earnings, past and projected, had already been shared with the public. No one listened. They were all there for the results of the vote, the only information that had not yet been made public.
The shareholders were losing patience. People shifted in their seats, whispered to companions, or texted on their phones. Nealis pushed on, but it was all uphill slogging. It was not fun to watch. He gave himself a break.
“I’d like to introduce George Demarest, who can explain how we fared in fixed income this quarter. George?”
A tall, thin man unfolded himself from his seat in the front row, but voices from behind stopped him.
“Come on, Jim. Cut to the money shot.”
“Yeah, I’ve got three hours on the L.I.E. to look forward to after this.”
That brought out a chuckle from the rest of the crowd, as most of them also had summerhouses to get to. There may have been differences of opinion as to which way the vote should go, but there was unanimous agreement that it was time to just get to it and get it over with.
The fixed-income guy looked back at the shareholders and waited. Nealis could have helped him out but didn’t. He was nervous. It struck me. He knew about the margin calls. He knew he was in trouble. He wanted this over as badly as everyone else in the room, but he had to play out his role or risk exposure. So he did nothing and let Demarest spin in the wind.
Rather than mounting the stage and speaking from the podium, Demarest went to the microphone stand on the floor. “Nice to see you, boss,” he said to Virgil. “I’ll be brief.” He was brief, but the shareholders were impatient. He mentioned low yields on bonds, narrow margins, and that the Federal Reserve was soon going to be forced to raise rates again. No one cared. When he asked if there were any questions, there was only one.
“You want to tell us about the vote?”
“Sorry,” he said. “That’s well above my pay grade.” He retreated to his chair and folded his long frame back into it. I think he would have sat on the floor if he could have made himself less conspicuous.
Nealis was in a bad spot. If he gave in to the crowd and announced the results of the vote, without the full preamble, he risked looking weak at the very moment when he had to look most leader-like. A man with more self-confidence might have been able to get through the ordeal with a bit of self-deprecating humor. Virgil would have handled the situation. Nealis got pissy.
“Gentlemen, may I remind you that we are all speaking publicly. We have the press with us today.” Besides Livy and the reporter, there were two other women shareholders in the room. None of them looked happy about being ignored.
The young woman from Bloomberg held up a hand at chest height and waved to the traders. It was the perfect gesture. It told the shareholders that, though she was merely an observer, she had already chosen her side. She was there to hear the results of the vote, too.
Tim Boyle stood up. “This is your show, Jim. Play it your way. But the only thing that anyone in this room cares about is the result of that vote. You’re doing yourself no favors by stalling.”
“I’m not stalling. I’m trying to keep to the agenda.”
“You’re the boss. Change the agenda.” Boyle sat down.
There was Nealis’s opening. He had the brains to see it. The only way to keep control of the meeting was to give the audience what it wanted. If he had agreed at the first signs of resistance, he might have been able to carry it off with dignity. But he’d held out, and acquiescence now wasn’t the high road—it was the lifeline.
“All right! All right!” He was the one with the microphone and standing on the stage, but he still felt the need to shout down the opposition. “At least allow me to go over the events that got us to this point.”
The crowd got quieter. They’d won and could afford to be magnanimous. To a point.
“Earlier this year the firm discovered that we had a compliance problem. Virgil Becker, the man who brought the firm back from the brink, was arrested and had to take a leave of absence. I took over and have tried to run things as he would have wished.”
He looked out at the group and waited for the polite applause the line warranted. He didn’t get it—not even from his supporters.
“Sometime later I was approached by two
of the board members, who expressed their desire that Virgil be allowed to retire and that I take over on a permanent basis. They wanted my okay before taking the matter to the full board.”
This was ancient history. He was losing them again. But this time they were angry. People were glaring daggers at the stage. The cell phones had all been put away. Nealis had their attention, but it wasn’t the way he wanted it.
“I demurred,” he said.
Nice word, I thought, for treason.
“They insisted, and we finally agreed that the matter was too important not to have the full backing of the shareholders. The results were tabulated earlier this week for all shareholders of record as of this date. I will now turn it over to our chief counsel.”
He stepped away from the microphone. He couldn’t help himself. He smiled.
The lawyer felt the crowd’s impatience. He didn’t waste any time. He strode up to the mic and announced, “The matter put before the shareholders is that the board will immediately accept the resignation of the chairman and CEO, Virgil Becker, and replace him with James Nealis.” He looked down at Virgil sadly. “The resolution is passed by a margin of thirty-two votes with ninety-six percent of shareholders voting either aye or nay, and no abstentions.”
I jumped up. “Question for you, counselor.”
The reaction was muted. I thought that most of the crowd was surprised, but not shocked. A loss for Virgil had always been a possibility.
Nealis saw me for the first time. His eyes bulged.
“Yes? The man in the back with the Yankees cap. Please state your name and give me your question.”
“Jason Stafford. Are you in possession of a list of all beneficial shareholders?”
“Please step to the microphone and repeat your question,” the lawyer said.
“No!” Nealis yelled. “This man was not invited to this meeting. Security! Where’s security?”
I strode quickly to the microphone and repeated the question. “Do you have the list of all true shareholders who voted in this election?”
Nealis may have suspected where I was going, but he was a step behind. “You don’t have to answer his questions,” he said to the lawyer.
“Let him answer!” someone yelled from behind me.
“Just answer me this,” I said. “Is it the same list that was used for entry to the meeting this evening?”
The lawyer was facing an angry, vocal crowd and thought he had just been lobbed a floating-softball question. “Yes, that is the same list. I have a copy that Mr. Nealis provided me earlier today.”
“Thank you.” I turned away and texted Brady.
All yours.
The doors in back of us opened and the room filled with policemen. Uniformed NYPD, U.S. Marshals in light windbreakers, and FBI in suits and ties. A uniformed sergeant with a bullhorn was telling everyone to remain calm and to stay in their seats.
The crowd was in shock. No one spoke or moved.
There was a pause, and in walked Wallace Ashton Blackmore, U.S. Attorney for the Southern District of New York, and the man who most wanted to be the next mayor of the city. He was flanked by four AUSAs and followed by a stream of television camera crews. Big lights on dollies followed them. The room was crowded and lit up like Yankee Stadium. And Blackmore stood on the pitcher’s mound.
“James Nealis?” he called out.
Nealis was stunned. “I’m James Nealis,” he said.
“You are under arrest, Mr. Nealis. Please cooperate with these policemen. They will read you your rights.”
“This is ridiculous. What am I being charged with?”
“We’ll start with securities fraud and defrauding the investors in Becker Financial with regard to this vote. Take him away.”
Blackmore turned to the cameras and began answering reporters’ questions.
78
Virgil and I spent most of Saturday in the office going through Nealis’s email. We needed to identify any senior staff who, because of their misguided support of Nealis and his campaign, might be happier working somewhere else. It was an ugly job, but necessary.
We found three certifiable rats. Virgil called them individually and asked for their resignations, effective immediately. A senior banker was playing golf with friends out at Shinnecock Hills in Southampton. Virgil caught him as they were setting out for the back nine. The second, also a banker, expected the call—he was one of the golfing foursome and had just watched his buddy get the axe. The head of IT was on his boat, fishing for stripers near Gardiners Island. None of the men squawked.
“I have some spots to fill. Any thoughts?”
“It’s a tough time of year to get anyone worthwhile to jump ship,” I said.
Virgil waved his hand as though erasing the thought. “That depends on price, doesn’t it? I’ll spend what’s needed. I’ll also have two board seats open in the near future. Would you be interested?”
“No, thank you. I’m not a politician. Has Aimee’s position been filled?”
“Her number two is ‘acting chief.’ I don’t really know him.”
“I have a suggestion. Let him stay acting for now and bring in a guy I know to back him up. A year from now, you’ll know which one you want running compliance for you.”
“Who is this?”
“His name is Hal Morris. You can trust him. I do. He risked his life for me and the Kid, so I owe him. He knows nothing about securities or compliance, but he’s smart. He’ll learn.”
“Fine. You handle it.”
I would have someone in compliance I knew I could trust. Someone who would have my back if I ever needed it. And Hal would be intimidating enough to be very good at the job.
“I’m leaving,” Virgil said. “See you tonight?”
“I wouldn’t miss it.”
79
Rather than subject Skeli, seven and a half months pregnant and insistent upon wearing spike heels to Virgil’s victory party, to the vagaries of a New York City cab ride, I paid for a limo for the evening. The car picked us up at the Ansonia and the driver was patient and polite as I detailed exactly how I wanted him to drive—both route and velocity—to Park Avenue. Skeli found my concern on her behalf both annoying and entertaining.
“You are very sweet,” she cooed, “but I’m pregnant, not disabled.”
“I’m treating my anxiety, which does not recognize that you are in far better shape than I am.”
“I’m thirty weeks and counting. I’ll be careful.”
The party was a small one by Becker standards. There couldn’t have been more than a hundred guests in the living room, on the deck, or circulating on the roof garden. We made a polite circuit before Virgil’s wife swept Skeli from me and steered her to a comfortable chair in the living room.
The carpet was white, the leather-covered furniture was white, the walls were white. The only color in the room came from two Roy Lichtensteins on the far wall—both pictures of the same blond woman, one weeping, the other smiling.
Skeli slipped off the shoes and hid her bare feet under the ottoman. Virgil’s wife saw her and smiled.
“You go talk to your cronies,” she said to me. “Wanda and I are going to have a chat about babies, and you men always get so antsy when the subject comes up.”
“Before I go, what can I get you?” I asked Skeli. “A plate of canapés? Caviar? Real food? They’re grilling steaks outside.”
“Just some water,” Skeli said.
“Still or sparkling?”
“Still. If I burp, I’m liable to pop out a baby.”
Trays passed by with little morsels of exquisitely designed food, flutes of champagne, and wineglasses filled with red, white, rose, and sparkling water. I took one of the latter and headed for the kitchen to get Skeli a tumbler of tap water, when I noticed across the room that a handsome, tuxedoed young waiter
was already presenting her with one. Sparkling water in hand, I went back outside and made another pass through the rooftop garden, looking for someone who might talk to me. There were more of them than I expected. The story of my part in rescuing Virgil and the firm at the meeting had spread.
Livy was holding court out on the deck, seated in a wicker throne. She lifted a large glass of clear liquid when she saw me. “Mr. Stafford, the hero of the hour!”
“No heroes here, Livy.” Heroes didn’t crash the market—a story that I hoped would always remain secret.
“Nonsense. Tell us of your ordeal in the desert.”
I looked around at the expectant faces surrounding us. Some of those people had snubbed me or whispered behind my back or laughed at bad jokes at my expense. Now I was their hero.
“Maybe another time,” I said.
“You must come and visit with us in Newport again. Wyatt so enjoys your visits.”
I agreed that I would and excused myself.
I found Larry and Brady sitting across from each other on white metal filigreed lawn chairs. Each had a glass of something amber. A bowl of crushed ice and a decanter sat on a small table between them.
“Greetings. You two look like you’re becoming good buddies. What’s in the carafe?”
“It’s a handcrafted, limited-edition Kentucky bourbon that Virgil insisted we try,” Larry said.
“How is it?”
“Ask me again in an hour or so.” He poured himself another shot and dropped a single small ice chip into the glass. “It seems to improve with quantity.”
“We are deliberating,” Brady said. “Care to join us?”
I pulled up another chair. “I’ll sit with you, but I’m not drinking ’til the baby’s born.”
“It’s a night to celebrate,” Brady said.
I raised my glass of expensive seltzer. “I agree. How was your day?”
Saving Jason Page 32
