Lenny was later pulled out of a coma-like sleep by a bizarre noise. He fumbled around in the fog of his brain and searched with his bleary eyes around a room he did not recognize for the source of it, but then it stopped. Where the hell am I? he thought, rubbing his face and eyes trying to wake up. Then that noise came back. He saw it was coming from a cell phone on the night stand so he grabbed it and answered “Hello.”
“You must have really been out of it,” said the voice on the line.
“Still am,” responded Lenny.
“You have just under an hour to get ready for the meeting,” said the voice.
“Meeting?”
“Go take a shower. I will be there in half an hour.”
“OK. Vlad?”
“Good. Your synapses are beginning to fire again. Glad I'm not there as I think it would be a frightening sight.”
“At least I know where I am now. I'll get a soda out of the vending machine to wake up, then take a shower.”
“Just be done with the shower before I get there. I haven't seen you since we were kids and don't want you answering the door in a towel like you were expecting some prostitute.”
Lenny laughed and hung up.
Vladimir's comment struck home at least partially. Lenny found some pants to put on before wandering the hall looking for a soda machine. He also managed to find his room key before walking out of the room. That would just be perfect, he thought. I know about three words of German and none of them would help me get the hotel staff to unlock my door.
Lenny finished his shower and got dressed. He was sitting at the table in the other room his suite came with going through the documents he brought with him. The hotel had a business center downstairs so they would be able to write up some official looking letter and print it out on the company letterhead he had brought with him. Then there was a knock at the door.
They had not seen each other since they were about 9 or 10, but Lenny had not expected the sight of Vlad in a wheelchair.
“Greetings, Lenny.”
“Hello Vlad. Please forgive me, but you said nothing about being in a wheelchair over the years.”
“Wasn't much point. I am what I am and do what I do. I just get shot at less now. The food should be here inside of 15 minutes. I checked downstairs before coming up in the elevator.”
“When do you expect the others?”
“Knowing them, following the scent of food and Vodka up the elevator to this room.”
Lenny laughed. “At least we will have something in common.”
“So, you have been doing many of these plays?”
“Never one this big. Well, that's not true. Never one where I had this much cash to throw at it. I've had a lot of plays which returned far more, but never had half a billion to throw into them. Probably a good thing or I would be in jail and unable to visit you, cousin.”
Now it was Vladimir's turn to laugh. “In Russia I can help keep you out of prison. You should consider moving there.”
“I couldn't have run my company remotely before now.”
“And now you can?”
“I have one guy working for me who is a natural at this. He isn't far from being able to fill my shoes. In truth, he came up with the information which allowed for this play and designed much of the play. As long as he could reach me by phone from time to time I could reside anywhere.”
“Then why don't you move?”
“My wife would divorce me in a heartbeat if I mentioned taking her away from her favorite American shopping malls for more than a month. Then I couldn't afford to live in a cave.”
Both men laughed.
“Thankfully, my occupation kept me from engaging in the most dangerous of habits.”
“You don't realize how dangerous it is until you are already married and starting to really make money. Then it is just too late to get out.”
Another knock on the door interrupted the conversation. The joke became a reality at that point. Standing behind the room service cart were four men. One of them was obviously a hotel worker and Lenny assumed the others were the ones he was to meet. “Gentlemen! Come in.” He stood aside and gestured them all through.
Lenny shook hands then removed his briefcase from the table as the hotel worker began setting up the table for the meal. Once the table was set and the hotel worker tipped with a $20 bill, Vladimir began the introductions.
“Gentlemen, this is my cousin Lenny from America. He is bringing some almost legitimate work to you.”
The other men chuckled at such an introduction.
“Lenny, this is Dimitri and his two assistants. I must apologize for not knowing their names.”
Lenny shook Dimitri's hand and Dimitri took over. “On my left is Boris and my right is Gleb.” Once again the hand shaking continued.
“Let's all sit and eat,” said Lenny. “I don't know what Vladimir ordered for us, but I'm sure I paid for it, so eat heartily.”
More laughter filled the room. Things were relaxing between the men. During the meal Dimitri asked, “So tell me Lenny, what is it your company actually does?”
“Well, given that you are friends of Vladimir, I will tell you the truth. On the surface we are simply industry analysts. While we do invest some money for others, we are not a licensed investing firm. At least we don't have the kind of license and regulation which would be required to open regular mutual funds. In truth, what we do is find information at least three days in advance, then act on it. We will not use information if it doesn't have at least a three-day lead time.”
“And in your country this is not considered legal?”
“Not even close. Nearly everybody does it, but when you get caught you tend to end up paying huge fines, or going to prison. You may have seen the news reports about Martha Stewart?”
The men nodded.
“It is highly profitable though,” chimed in Boris. “A three-day lead gives one time to spread trades across many accounts to avoid detection.”
“Exactly why we need the information at least three days in advance. In the matter of the current play I came to talk with you about we have had the information months in advance. We have already done several plays and more than doubled our assets. There are several big plays yet to be had with this information, but we cannot put all of the cash into it via our normal channels without getting caught. It is simply too much money. Like trying to hide an ocean liner in a bathtub.”
All of the men chuckled at that one.
Gleb finally entered the conversation saying, “We tend to be very good at taking people's money.”
Now everybody laughed heartily.
“What is the nature of this play as you call it?”
“We have known for many months that First Global Bank was in the process of off-shoring all of their data centers. While the cost savings has helped their stock some, they are going to run afoul of banking regulations when they off-shore the last two data centers. That time is approaching. At that point they will lose their FDIC insurance and most likely be taken over by the government to be liquidated or forced to bring operations back into the U.S. That play is a ways down the road though.”
The other men at the table weren't that interested until the final sentence. Now they were all paying attention.
“You might have noticed some stock movement for Pytho Corporation lately.”
Dimitri nodded.
“We were a big part of that movement. We found out some time last quarter that Pytho was about to roll-out a new software product for a niche market. We made our buy while they were low, then sent out the leak about the new software product. I assume you have also heard that leak?”
Dimitri nodded again.
“Do you know what the niche is?”
Dimitri shook his head.
“Banking”
The other two gentlemen sat more forward now and began to pay closer attention.
“The first client they have signed is First Global. They have just
completed or are about to complete the roll-out of this software to all French banking operations. As Pytho delivers other countries it will be rolled out to them. We don't have hard estimates yet, but they should complete roll-out to everywhere inside of six months. At some point soon Pytho will announce the new software product and some time shortly after that First Global will announce how much money they intend to save using it.”
“Just how much money will they be saving?”
“Using a third-party product allows them to terminate all IT staff in every country except for a token few kept around for whatever reason. It also lets them get rid of all the other computer systems. My own estimate is that they will reduce operational costs by at least $10 million per year. France alone will save them nearly $2 million per year.”
There was silence and some glances. It was obvious to the men that Lenny was laying it all on the line. They could refuse to invest the money for him and use this knowledge for their own profit if they wanted.
“What would you have of us?”
“I need to set up some kind of investment arrangement with you, get some money in your hands as quickly as possible, then have you start buying an awful lot of First Global. I will tell you when to dump it. I will also tell you when to start selling short.”
“You have no interest in making more money from Pytho Corporation?”
“I've already made over $8 per share from it in 72 hours. Yes, it will go up some more after the announcement, but not enough to warrant my attention at this time. First Global is currently trending down thanks to other financials and is now below where it was before I did the first play. That is where the money is to be made. Once they announce the use of Pytho software, the rest of the industry will find out about $10 million per year in cost savings. Coupled with the dramatic drop in data center costs, plus the profitable sale of a few data centers their stock will be up another $20 per share after they announce this quarter's numbers. I'll be getting out once it crosses the $18 bump threshold.”
“And you wish to start shorting as soon as you are out?”
“I'll contact you and tell you when to start shorting, if I decide to make that play. We will be shorting Pytho Corporation and Big Four Consulting, but some other country may force me to walk away from the First Global shorting.”
Even Vladimir was paying attention now.
“We haven't finished our research yet with respect to the insurance requirements and restrictions put forth by other countries. In the U.S. there is a restriction that all workers with significant access to a bank's computer system must go through government background and security checks. When the data center is in a different country and not owned by the bank, it is quite hard to enforce the background checks and/or do them well. There may be another country on the list with the same restriction. First Global is converting the foreign countries first because they have the highest cost of operation and least positive impact on the bottom line. I know for a fact the announcement will come soon and that the French migration isn't going to cause this problem. I will get to make the first play. The others will happen if no other country gets in the way, and if that happens the others just won't be as big of a play.”
There was silence in the room now. Dimitri was looking directly at Lenny contemplating. Finally Dimitri spoke. “You don't mind us and our clients riding along on this big play?”
“They can ride along, but they cannot ride along big unless you can spread the trades across hundreds if not thousands of trading accounts held by individuals. Too much money being put into this will alert suspicion before it is time. Once you notify me that all of my money has been invested I will put out the rumor that First Global is the first client of Pytho's software. After that they can ride with as much as they want. The rumor will spread like wild fire.”
“You have no objection to some of our clients taking a small gain with Pytho on its way up after the announcement?”
“That information is out there, do with it what you will, I can only handle so many angles of this at once.”
Again Dimitri nodded. “And you are looking to put half a million in play?”
“Half a billion” responded Lenny. “That is why I need someone who can spread the trades around. If all of that hits from one place on one day it will attract too much attention. When it comes time to do the shorting there will probably be three quarters of a billion sitting in the account that will allow for a lot of shorting credit.”
“We have quite a few customers we advise privately. Being able to bleed them the Pytho story and being able to tell them when to get out would make them very happy. If they can make $8 per share in a week, they are more than happy. We have some old people we do investing for. They don't have a lot of tolerance for risk since this is all they have. That kind of turn around will go a long way to making their lives easier. Call me soft, but when I find a small score like that I run it for them. Most need more than a 6% return to survive.”
“Then they should be very happy. When I tell you to start shorting First Global you should take half of their profit from that trade and use it to back some short sells, it will net them a much larger return and be almost the same risk level.”
“Assuming we get to make that play.”
“Yes, of course.”
“Until then, you have the short hop of Pytho, then the major bump of First Global. Even if some country does out First Global before we can play it, we should still get to play Big Four Consulting in full.”
“You did not inform us as to the play with them.”
“They own a big piece of the company providing the off-shore data center services. They are also the ones who sold the idea to the board at First Global. They are the ones assisting with the roll-out of Pytho software at First Global. The only play for them is a shred, and it doesn't matter who blows the whistle on First Global to make it happen. Of course, it will be better if they wait until the U.S. data centers have all been migrated. The shred will have a lot more effect when it comes with congressional hearings and criminal indictments.”
Vladimir had believed himself the only one in the family with this gift until that moment. Lenny obviously had the same ability, just far less desire when it came to dodging bullets.
Prior to coming here Vladimir had received several emails from Hans. He knew for a fact Big Four Consulting was basically running the operation in India for data center migrations. He had not heard who the client was other than it was a large bank from the U.S. that handled close to one-third of the world's finances thanks to all of its recent acquisitions. There was no way he could tell them how he got that information. He had taken it out of a message he found in the “sent items” box of the trainer's email system.
“It is good you don't need to make the shredding play on First Global to be happy with your return,” Vladimir finally offered. “They may tumble hard for other reasons.”
Now everyone was paying attention to Vladimir.
“One of the data centers to which they have been relocating is being canvassed by al-Qaeda. We don't know what, when, how or even if, but we do know the where.”
“And you are unable to tell us who the we is?” asked Dimitri.
“Naturally. I have not figured out what they intend to gain by any attack on the data center. The bank has twin data centers and fault-tolerant data storage. If one location goes down, the other will simply handle all of the transactions. Worst case, some of the tellers will need to log in again. Bombing just one location won't do any more than kill a handful of people. A bus bombing kills more and affects more.”
“At any rate, it will not affect the other shorting opportunity. Big Four Consulting has had a significant revenue increase since the migration project began. I expect they will have a larger revenue increase when they announce their new quarterly numbers due to participating in the sale of this software and its roll-out. That will push their stock up. Once First Global gets nailed for violating federal regulations b
y migrating the data centers it will be a short matter of time before Big Four is fingered as the one doing the sale. Their stock will free fall while they are under investigation. That's an easy $20 per share play, but I start getting out around $15 unless they free fall so fast they are well past a $15 per share loss before I can get the orders in to cover shorts.”
“So, you are asking us to facilitate some trades for you based upon your instructions. We are free to ride along on those instructions as long as we don't get too greedy causing all of us to be put under investigation. At some point in the near future you will want most of your money back. Correct?”
“Actually, if you are up for it I have one more task for you.”
“Go on.”
“Quite some time ago I had a law firm set up an off-shore company in a country which doesn't have an extradition treaty with the U.S. I don't trust what they did, so haven't done much with it. I would like you to set up an off-shore trading company for me in a country which has no extradition treaties with the U.S. Most of the money should be put into that company rather than sent back to me.”
“Russia does not have extradition treaties with United States. Setting up a company will take a month or so. We will have our people do it. Do you mind if it is in the same office building as one of our locations? We have offices in Moscow and the Ukraine capital, Kyyiv. If you want to keep costs down Kyyiv will be your location.”
“No, that would be fine. I would want an actual office with air conditioning, Internet, the usual business tools. Would need a couple actual offices in the office space itself. I may send someone there to train some staff so it doesn't look like just a shell.”
Infinite Exposure Page 23
