by David Lender
They prepared a barbecue behind the house that evening. François and Elaine seemed to do everything with Cynthia, Chloe and Renée hanging off them, clutching their legs, sitting in their laps or jumping up and down next to them. Little fingers poked the steaks and the vegetable kabobs awaiting the grill.
“These are times we need to savor, my friend,” LeClaire said to Richard, Chloe in his lap squeezing his nose, sticking her fingers into his cheeks. He saw Elaine smiling. LeClaire blew her a kiss. The picture of a happy man. LeClaire motioned to Elaine, handed Chloe to her. “Come on, Richard. Help me with the steaks.” Richard and LeClaire walked over to the stone fireplace, and LeClaire started putting the meat on the grill. Richard couldn’t see anything for him to do. He figured LeClaire just wanted to talk. “She’s a great girl,” LeClaire said, looking at Kathy, whose nose Chloe was now squeezing.
“Yeah. I’m thinking the same thing, and more.”
“We work hard, and we should, but for a purpose.”
“I agree,” Richard said.
“So get going before somebody else scoops her up.”
Sitting in front of the fireplace after dinner, Richard watched Kathy’s hair moving in the wind, silhouetted against the flames. He could almost sense how it felt as he imagined running his hands through it, stroking her head. “A walk?” Richard suggested to Kathy. It was already dark.
“Having fun?” Kathy said once they started toward the bay.
“Loving it.” Richard thinking Kathy’s mind seemed far off.
“Could have fooled me.”
“Yeah?”
“Yeah. You were so caught up in your Encyclopedia Britannica routine on the ferry, you didn’t seem to notice how beautiful this place is. Or anything else.”
“I figured you didn’t know Fire Island, what with spending your summers at your dad’s ancestral estate in South Hampton.”
“Your psyche’s still wearing a three-piece suit. Lighten up. Why so tense?”
“Maybe I’m working too hard.”
They entered the path to the Beach House and Club, roofed by an arch of bushes and trees, Richard caught up in the ambiance. He wanted to pick up their conversation from earlier, move it toward telling her how he felt about her. They walked slowly, arms brushing, Kathy now seeming approachable. “I guess I am wound a little tight. I’m working on a big Milner M&A deal, and this mole thing is nagging at me.”
He saw her tense, then put distance between them and wrap her arms around her as if she were cold. “You had me getting into the mood before you brought up the mole.”
“Then forget I said it.”
“I can’t. I wish you’d never stumbled onto him. But now it looks like something is going on.”
“There is, and it’s worse than you think. Years of trading, tons of deals, mostly Walker’s and some of Milner’s. And big money, with probably lots of people involved.”
Kathy pulled her arms in tighter, focused her gaze downward on the path. “And what are you going to do?”
“Nothing. Forget about it.”
Kathy snapped her head to look at him. “What? If you’re right you have an obligation to do something.”
“Look, maybe this is how it works on Wall Street. You said yourself this is a rough-and-tumble place. The Wild West.”
“They’re crooks! You have to expose them.”
“I blow the whistle without being sure, I could get fired.”
“Maybe worse than fired if you don’t. Milner’s CFO was murdered.”
It sent a bolt of shock through him but he went on as if she hadn’t said it. “You forget I’m still probational. And now I’ve got something to lose. I’m doing great, and I’m not doing anything to screw that up.”
“I can’t believe this. Where’s my farm boy now?”
“I’m running with the pack, learning from the top guys in the business.”
“Get your head out of your ass, you naive fool. If you don’t tell somebody, I will.”
Richard just looked at her, surprised. How did stuff just bubble up and erupt out of this woman?
Kathy said, “And don’t give me that sad-eyed, lovelorn look.”
Uncalled for. He felt a flash of anger. He said, “You’re really stuck in your hard-armored shell aren’t you? Glib, tough and cool. I try to get close to you and you push me away with talk about fast-tracking your career to be bigger than your dad. It’s like your mantra you retreat into…”
“Better be careful what you say…”
“Are you doing it for the thrill of the chase, to win, or to be somebody Daddy would approve of?”
Kathy stopped and thrust her arms downward, hands balled into fists. She stuck her chin out and said through her teeth, “I don’t need to listen to this from some hick who’s so crazy to star-fuck with Milner, Jack and Mickey that he’s blinded to the fact they’re all a bunch of sleazebags! If you’d open your eyes and get your priorities in line with your so-called values, you could use your brains to figure out what you really want. See if Wall Street is anything more to you than some ego trip out of being a doofus all your life!” She spun and walked off in the opposite direction.
When Richard got back to the LeClaire’s cottage, Kathy had already gone upstairs to bed. The next morning, she and Richard exchanged awkward formalities over breakfast, then stayed away from each other on the beach all day. They sat in separate sections on the ferry back to Long Island, Richard fuming over her words, regretting his and feeling like his heart was being crushed. When the ferry docked, he decided to catch up with Kathy and talk. His legs felt weak as he trotted down the gangplank. Before he reached the bottom he saw her hop into a cab and pull out. His heart was knocking.
Washington, D.C. The next morning, Croonquist spent an hour staring at the MarketWatch monitor on his desk. He ran programs to access the sources and identities of the firms initiating orders on the four stocks he’d come in early yesterday to analyze, and never got to.
At 9:15 he got up, stretched and sat down to review the sixty pages of output he’d printed. By 9:45 he assessed the situation. SPS Technologies’ stock price showed what was probably a normal move based on improving performance. Nothing unusual. His review of Jupiter Fabrics was similar. He decided to drop them both from his watch list. His analysis of Dasher Furniture showed definite signs of unusual buying from the Far East. Not worth bothering with. The Asian governments never cooperated in bringing anything to prosecution.
Tentron was a different story. Walker & Company’s steady buying had shown up since a month ago. In the previous weeks, heavy purchasing activity had picked up through two brokerage firms in London and three Swiss, Cayman Islands and Netherland Antilles banks. The pattern was unmistakable—methodical buying from those firms. Shaw, BeldenFirst, Stuart Halsey and Tucker Securities in the U.S. started the same systematic buying at about the same time. He turned to the keyboard and ran a few more subroutines. He could feel his pulse quicken as the columns appeared on the screen. Prior to a month ago, no buying had been exhibited by any of the European firms, and Walker had shown only modest trading activity indicative of routine customer orders. Yet Walker & Company had purchased for at least one customer over 4.6% of the stock in the last three weeks and the foreign firms had purchased a total of over 13% of the stock during a similar time period. Shaw, BeldenFirst, Stuart Halsey and Tucker Securities customers had accounted for another 7% on just as systematic a basis. If Croonquist was right, that meant that 25% of the stock had been accumulated over the last two months with the stock price moving more than five points, but, incredibly, no one making the mandatory 13D filing disclosing they owned more than 5%.
Croonquist dialed Mike Dolan, his friend at NSA.
“I was wondering when you’d call,” Dolan said. Croonquist felt anticipation, reached into the bag in his bottom drawer for some pistachios.
“You have something interesting?” Croonquist asked. So why couldn’t Dolan pick up the phone himself if he’d found somet
hing?
“A mountain of trading. Reports back and forth between New York and Paris.”
“Which stocks?” Croonquist asked.
“Code name MCS. It’s the same kind of activity we saw in those other half dozen stocks. Orders going from Walker & Company over to GCG in Paris. Then not much activity, and then a whole boatload of confirmations coming back.”
“Anything to anyplace else in Europe?” Croonquist asked.
“Nothing I’ve seen, although who knows where they went once they got to Paris? Some interesting chatter on the phone lines, though. You guys have audio capability in your Cray, or you need me to send you some tapes?”
Croonquist sat up straight in his chair. He think they were playing with Tinkertoys over here? He said, “Yeah, we can download the audio data as well, and we’ll play it back over here. I’d like to review everything. Then I’ve got a few ideas I want to check out. You in all week?”
“Yup,” Dolan said.
Croonquist hung up and dialed his head computer jock to download the NSA’s data onto the SEC’s Cray. While he waited for the guy to pick up the phone, Croonquist thought about what he had: hard data on order flow on what looked for sure to be a Milner deal, the same pattern as the homebuilding stocks. He was convinced that when he ran the NSA data through MarketWatch it would correlate: MCS would turn out to be Tentron. And he was sure the computer hacker and the phone taps would add input to help it all add up to something. It was coming together. And now Charlie Holden, his old partner, was in the mix. This was looking good.
New York City. Richard waited for Kathy at the Teavana across Water Street from the office. He hadn’t seen her all Monday and wanted to clear the air. He clenched and released his fists, not just anxious about smoothing over their argument; more at her reaction to the stupid things he’d said about the mole. And if Kathy knew what he’d been thinking that day at Milner’s about Jack’s skiing speech—that maybe missing gates was okay if nobody saw you, and if that’s how it worked he might let himself get talked into sending some emails for the mole—she might never get past it. Like she’d said on Fire Island: “Where’s my farm boy now?” He hoped he hadn’t lost her over the crap he’d spouted. He sat on a stool by the counter facing the windows, now sipping his green tea, the only customer. The sharp odor of bleach permeated the place; one of the crew was mopping up. Closing time.
Kathy walked in, looking strained, or impatient, he couldn’t tell. Her jaw was taught and her lips were thin lines.
Richard stood up. “Hi,” he said, “you want anything?”
“No, I’m good.” She motioned with her head toward the door. “Let’s just walk a little.”
They left, walked side by side. Kathy had her arms wrapped around her. Closed up.
Richard said, “I thought maybe we should break the ice. Sunday on the island was awkward.” He turned to her and smiled.
She was walking with her head tilted downward, eyes on the sidewalk straight ahead of her. “I…regret our argument.” She stopped on the sidewalk and looked into his eyes. “I want to know what you’re thinking.”
Richard decided to just show her. He pulled her to him and kissed her. She didn’t resist at first, then pulled her lips from his. She stood encircled in his arms, not moving away, her hands on his chest. She was looking into his eyes.
“No reaction?”
“Okay,” she said, “so you’re a good kisser.” Her eyes showed a hint of a mischievous smile, Richard thinking this was going better than it had at Point ‘O Woods.
Then she leaned back and her eyes went distant. She said, “I thought you wanted to talk.”
“I do. About us.”
She pulled away from him, stepped back. “I need to think more about this.”
“Quit thinking. What do you feel?”
She shook her head. “I don’t know.” Then her eyes narrowed and her jaw clenched. “And I’m still…” She paused, then said, “I need to go home.” She turned and walked down Water Street without looking back. Richard felt an ache in his chest and started after her, his breathing labored. Then he stopped. Don’t push her now. He watched her a moment, then started off in the opposite direction. He knew he was getting in deep enough that he needed to resolve this, but this wasn’t the moment. “Getting in.” Who am I kidding?
CHAPTER 6
NEW YORK CITY. “MAN, OH man,” Milner said aloud, sitting alone in his office, looking at his computer screen. All of the press reports—CNBC, Bloomberg, CNNMoney, Fortune, even those yahoos at Yahoo Finance—were universally negative on his Tentron bid. Tentron’s stock was trading at $41.50, well above his offer. That spoke volumes more than the press: market expects higher bid.
Sandy called him and said he was coming over. “You seen the press?” Milner said to him when he arrived.
“Like flies on dog shit.”
Milner sat back, hooked his hands behind his head. He said, “It’s odd, intentionally shooting myself in the foot. Against my instincts.”
“I agree. Why don’t you just get it over with and take out a full-page ad in the Journal that offers a $100 million reward to anybody that tops your bid.”
“Sanford F. Sharts, I’m surprised at you. Stooping to sarcasm.”
“You’re bringing out the worst in me, playing around with the public markets, risking both of our hides if the SEC finds out you’ve made a frivolous offer. That it’s to buy you time to figure out what to do about the shit you’ve stepped in.”
“It’s no different than bidding for something you don’t really want in a charity auction. Coaxing some jerk you can’t stand into the bidding, then running the price up on him so your favorite cause gets a higher price.”
“Since when is Walker your favorite cause?”
That stopped Milner. “Point taken.”
“Sitting around isn’t going to solve the core problem. Are you going to cop a plea or run?”
Well, that about summed it up. No hiding from Uncle Sandy. “I don’t know yet. I’m still trying to decide.”
“Just don’t get too cute. Remember you’ve got a fuse burning, and you don’t know how long it is.”
About ten minutes after Sandy left, Jack called and asked for a meeting. Milner said sure. It was like A Christmas Carol. He wondered when the next ghost would visit.
A half hour later when Jack got there, he didn’t even waste time grinning and preening himself before saying, “What’s going on with this half-assed bid?”
“Not much if you believe the press.”
“Quit screwing around. What’re you doing?”
“I’m trying to buy a company.”
“Doesn’t look that way to me.”
“No? I’ve spent a million bucks in fees and committed to six billion in financing. What does that look like to you?”
“At forty bucks a share? A wet fart. We’ve got a ton of capital at risk on this one. And not only that, we need the profits to shore up the firm, what with the losses we’re taking from this credit market meltdown.”
“So now I’m responsible for helping you address macroeconomics?”
“Don’t fuck with me. After you called him, Sir Reginald doubled down his position. Jeez, we own over 25% of the stock. If you pull out or blow it the stock will drop like a stone. It could bankrupt Walker. I’m not gonna let that happen.”
“You gonna dictate my deal tactics now?”
Jack just stared at him. Milner didn’t know if Jack was thinking of what to say next or was just trying to be intimidating.
Milner said, “Maybe you oughtta go back downtown and take care of your business, leave me alone up here to take care of mine.” Milner felt like he’d won a round when Jack left. But he hadn’t forgotten what Sandy said. And seeing Jack seething like that reminded him of what happened to Chuck.
Washington, D.C. Croonquist was tired. Why wouldn’t he be? He’d been working his ass off on this presentation to Charlie Green for two straight weeks. Franklin Stone from
Litigation would attend, now an ally whose support he could count on. Phil Johnson in Surveillance, his old boss would also be there, and was on board. Green was still pressing for a big bust, but lately Charlie’s mood depended on the direction the political winds were blowing on Capitol Hill that week. So Croonquist wasn’t sure how today would go.
At 8:59, Green entered the room, nodded and took his seat at the end of the table. Croonquist felt a flutter in his chest. He nodded to Starsky to dim the lights, cleared his throat and rose.
He clicked to the first PowerPoint slide. “As you can see here, we’re focusing on the stock of just one company, Tentron Corporation, as a potential enforcement action, but there is a pattern that exists from at least one previous transaction we monitored involving Southwest Homes. The similarities in trading provide evidence that the individuals we’re targeting are functioning as a group.” He clicked to the next slide.
“What you see here are selections from a series of emails over a two-month period regarding the common stock and listed stock options of a group of six homebuilders just before the announcement of the Southwest Homes initial public offering. The emails are between Walker & Company’s New York office and GCG’s Paris office. As you see here, the initial buy orders went out from Walker’s New York office and the confirmations started coming in a day or two later.” He looked up to see if Green was with him. Green looked bored.
Croonquist clicked successively through four slides, moving it along. “What you can see here is that orders started getting handed out to various Swiss banks as well.”
“I never heard of any of these banks,” Green said.
“They aren’t majors like UBS and Swiss Bank, but they’re all substantial in size, none with less than five billion dollars in total assets,” Croonquist said. Green nodded.
