Confessions of a Wall Street Insider

by Michael Kimelman

  “That’s the end of that,” Makol had barked, snatching the phone from me in mid-sentence, and asked if I wanted to talk. I didn’t. He tried one last attempt to coerce me into cooperating by stating with a mocking smile, “You know your friend Dave Plate is down the hall coming clean on everyone.” The fact that he thought Dave Plate and I were friends confused me even further but I opted not to correct him. And that had been it between the two of us.

  Now here he was again. It was the same man. The trauma of that day had blurred his face into my memory, like he was some ghoul in a nightmare.

  Was this a coincidence? Was there some chance that he lived around here and was out for a bagel himself? No. The world did not work that way. Especially the world of FBI agents.

  I stood up and started to move to the door, but he was already in his car and driving away. My first reaction was anger. Stalk my family? Follow me here and menace me in front of my wife and little kids? But soon the adrenaline and anger slowed and I could feel my twin sensations, fear and nausea, returning to their familiar positions at the fore.

  So this was what it was going to be. The implication was clear. They could follow me anywhere, harass me and my family. And it would not stop unless I cooperated or pled out.

  “Are you all right?” Lisa asked. “Who was it?”

  I had my best poker face on, but the frustration was hard to hide. My stomach felt like it was bubbling and burning, and my hand was shaking.

  “No one,” I lied. “Thought it was someone else.”

  Lisa stared right at me—I didn’t fool her for a second—but she clearly did not want to dig any deeper in front of the kids. I sat back down, looked at my children, and tried to hold back the waves of fear.

  In mid-December, just over a month after my arrest, we hesitantly headed to a holiday party hosted by our friends the Wilcotts in Purchase, New York. With the exception of a Larchmont Temple fundraiser in November, it was the first real party we’d attended since my name and face had been plastered across the newspapers. The Temple fundraiser only partially counted, because Lisa catered the event. It was a gig. She spent most of the time managing the kitchen staff and tasting the hors d’oeuvres as they came out of the oven, not mingling. I’d been left to stumble around solo, in a vodka-induced daze, an accidental celebrity regarded with a mix of curiosity and pity by those who didn’t know me—and with genuine concern by those who did.

  The Wilcott holiday party would be the first real party since it had all happened. Lisa was nervous, to say the least, and I knew the floor of her closet would resemble backstage at the end of a fashion show by the time she had found something suitable to wear. In anticipation, I had “edited” her calendar to a 7 p.m. start time, buying us an extra hour for cursing and crying during the “I have no good clothes” portion of the evening. I was comfortably numb, courtesy of the half a Klonopin I had chewed earlier. The general effects had worn off, but my emotional nerve endings were still pleasantly dulled. My hope was for Vitamin K’s “flattening” effect to last until I could tap my good buddy, vodka, to take over and escort me for the night’s heavy lifting. Fortunately, the guest list was a benign mix of strangers that didn’t know me and good college friends that really knew me.

  We arrived at the big and beautiful house in Purchase. Once through the door I made sure Lisa’s coat was hung up before informing her that I was planning on blitzkrieging the bar. I asked if I could get her something.

  “Diet Coke,” she called.

  I made my way to the bar, through a bevy of thin, perfectly dressed young women, and a mix of preppy and scruffy men. Everyone was in their thirties like us. Everyone seemed placid, content with the place they had found in life. This was the self-satisfied celebrating their satisfaction.

  I bumped into George Gettleman, a friend from Lafayette a few years younger than me. We said hello. A little small talk later, and he was going straight for my case.

  “Mike, come on, man!” he said, shaking his head. “Don’t you watch The Wire? What the fuck?”

  He thought I was a fool for having failed to notice the noose tightening.

  “Saw an early episode or two, loved it, but never sat down and watched the whole thing.”

  “It’s so fucking good,” he said. Would’ve made a helluva lesson for you. First season DVD for $49.99 would have saved you, what, $500K you had to put up for bail.”

  “Actually, it was $250K for bail, George, but when you’re right, you’re right.”

  It was the best, most direct piece of advice I would receive all night.

  I spent the rest of the night parrying and dodging that peculiarly American cocktail party question, “So, what do you do?”

  “Do? Me? I’m awaiting trial on a federal securities fraud case.”

  “No, really?”

  I also had “I’m unemployed.” Or “I’m retired.” Or “I’m in between things.”

  It was late 2009, so the unemployed/in-between gigs line didn’t even draw a measure of surprise or sympathy. The stigma of losing one’s job had been erased. Even the chosen, the I-bankers and the biglaw lawyers, had felt the blade. For the first time in generations, the guarantee that so many at this kind of cocktail party felt, of being rich and beautiful (or at least rich) for life, had been voided.

  “I’m retired” got the best responses. “Best” meaning, of course, funniest for me. Coming from a thirty-seven-year-old male, it usually engendered a brief hint of shock, followed by some degree of anger and jealousy. For the men especially, it came off as a challenge to their manhood that I might have already reached the finish line. The flustered couple, politely excusing themselves, would promptly seek out our host and hostess and ask for the straight talk about me. When they found out the truth, that I was actually heading towards an extended federal vacation, their features visibly softened with genuine relief.

  I tired quickly, however, of talking about myself. And I was certainly not interested in anyone else’s life. Hey, mine was shit—and nothing was going to change that at this point—but I didn’t need to know about anybody else’s. So mostly, I just kept drinking.

  Toward the end of the night, I wasn’t quite numb, but had finally reached a comfortable state in which I could mentally watch the rest of the party from afar. My bed started calling. I hoped we would leave soon, and that Lisa would count it a small but meaningful psychic victory for the two of us. A return to normalcy. I hoped she had been able to talk to the friends she hadn’t spoken to in a while, and relegate, if only for a few hours, the sick scent of depression that seemed to dominate every waking moment in our house. (She was still busy with work, but I was starting to notice she was making excuses not to leave the house. This concerned me. I could understand that it felt safer at home—far from the unsmiling neighbors and questions, no matter how well-intentioned—but it was also not hard to see how staying indoors all the time could lead to a very bad place.)

  I wandered over to the fireplace—it was in a small den right next to the main gathering—and looked at some of the pictures on the mantel. Family photos of beautiful children. Perfect teeth, even. An embarrassing surplus of smiles. Happiness blazed from left to right on top of our friends’ fireplace. It seemed real. It did not feel fake. This pictures might actually be who those people were, I thought. And how the fuck should that make someone like me feel? I had photos of smiling kids inside my house too. But what did I have to be happy about?

  My college buddy Dino wandered in. Dino and I had been through dozens of adventures together, both in college and after. One year during spring break in Jamaica, he was kidnapped after a Ziggy Marley concert. In a brazen act of drunken stupidity, I pursued the snatch car down a dark, muddy road with my friend Keith. When it stopped for a moment, I opened the back door, threw a beer in the face of the driver, and pulled Dino out while punching the passenger that was holding onto him.

  Dino was one of my closest friends, knew me better than most. I liked, if not loved him.

/>   “How ya doing, man?” he asked with a forced smile. I could tell that he was trying to keep the mood light, but also that he wanted to know where my head was. This wasn’t bullshit. Dino cared.

  “Great,” I told him with my best Nicholson circa The Shining smile. “Can you keep a secret?”

  “Yeah, of course,” he said, bracing, not knowing quite what to expect.

  “I’m going to kill myself tonight,” I deadpanned.

  “Really?” he said.

  “No,” I said.

  He broke out in laughter—deep, Viking-like bellows—and I couldn’t help but join him. It felt good to laugh. Cathartic. I wasn’t actually going to kill myself. There were, actually, worse things. That elusive truth revealed itself, if only for the tiniest of instants.

  “I love you, man,” Dino said and gave me a hug.

  Lisa and I left soon thereafter. We said a quick goodbye to the hosts and our friends and quietly walked out the front door, the celebration still raging loudly behind us. After the thumping tunes of the party, the silent, cold walk to the car felt vastly magnified by the widening gulf between us.

  The party had been pure fiction. This stark winter chill was our reality. Everyone else’s lives around us were progressing; promotions and bonuses, kids’ milestones and achievements, five-star vacations and romantic getaways. But Lisa and I were stuck in neutral, with a sword dangling inches above our heads. Two people stuck together at the hip, yet as if we were moving further and further apart. Instead of leaning on one other for support, there was only blame and anger, disappointment with our present condition, and fear for our future.

  We went to Lisa’s dad’s place in Florida for Christmas. I thought the Sunshine State might offer an escape from feeling hunted, but I was sorely mistaken. When you’re a finance guy and your father-in-law is Michael Moskow, he knows what’s up with you before you do.

  And he wasn’t the only one. Marc Bender from Millennium was there with his in-laws. Marc, with the wavy black hair, nerdy build, and the fastest fingers ever to touch a Blackberry, narrowly dodged a bullet by not giving us money. Izzy Englender would have served his head on a platter had Millennium’s name been dragged into this after their mutual find timing scandal a few years earlier. Marc’s face registered shock when he laid eyes on me. Rather than play social dodgeball for a week, I decided to walk right over and say a very polite hello. He glanced around nervously—as if looking for FBI agents on my tail—as we exchanged strained pleasantries. Marc asked only the minimum required:

  “How are you?” and “Who do you know here?”

  I responded with a diplomatic, “I’m doing okay, all things considered.”

  He wished me a halting good luck.

  I understood, then, that I was toxic. Cursed. Anyone who worked anywhere near my industry would not want to be seen associating with me. Whatever I had, they thought they might catch it.

  As I left Marc and walked out of the room, I fought the urge to lift my shirt and proclaim: “Look, ma! No wire!”

  My nights were still spent drunk, alone, and despondent. During the days, I promised not to let my depression affect the kids’ vacation, and we played like crazy, filling our time with sports, swimming, and sandcastle-building. I was acutely aware that these memories might have to last me a while.

  While I was in Florida, Sommer had a second meeting with Brodsky and Fish, the Assistant US Attorneys, to try to convince them, once again, that I was an extra in this case—a dolphin roped in to the Fed’s enormous and indiscriminate tuna net. His pitch was: Why not let the SEC put him before a jury and try him? It’s a lower standard of conviction because it’s civil (preponderance of the evidence, i.e. 51 percent, versus beyond a reasonable doubt for criminal—think 85 to 90 percent). It made perfect sense to me, but it was a pipe dream. The US Attorney’s Office would never voluntarily sacrifice the limelight and kick a high profile case over to the SEC. Additionally, they would never risk the SEC compromising their larger case against Zvi and Raj. It might have produced a more equitable outcome, but careers and, more importantly, prospects for glory were on the line here, so you couldn’t expect much.

  The day of Sommer’s meeting, I must have checked my phone more than a hundred times. The call finally came as we were pulling up in the driveway after a day of swimming and fishing. My heart was in my throat. Would I get a rose from the Bachelorette?

  “Can you talk?” Sommer asked.

  Was he serious?

  No, I’m busy watching Kim and Kourtney take NY. Call me back in an hour.

  I wanted to scream in the phone: “Of course I can fucking talk! I’ve been holding my breath for five fucking hours!”

  Instead, I took a long, deep breath.

  “Yeah, I can talk. How’d it go?”

  “Now these things are never definitive,” Sommer said. “It’s more about interpretation … reading the other side. Even if they were convinced that we made a compelling case that you don’t belong here, they would still have to go ‘up the chain,’ so to speak, and run this by their supervisors … who would then eventually have to go up to the head of the criminal division and to the US Attorney, Preet Bharara himself. In a case this high profile, these guys at the bottom, the guys prosecuting the case, can’t make a move without checking all the way up the line.”

  Holy shit, was I going free? Was Sommer actually telling me he thought he’d convinced them not to indict and now they have to go talk to their bosses?

  “It works the same the other way as well,” he continued.

  Okay, there was the caveat.

  You idiot! I wanted to shout at myself. Why allow yourself to get excited, even for a moment?

  “How’s that?” I asked.

  “Well, if Brodsky and Fish are resistant, I am going to let them know that WE intend to go up the chain, and WE will want to make the same pitch to their supervisor, a man named Marc Berger, head of the financial crimes division. If he’s not willing to listen, then we go to Ray Lauria, head of the entire criminal division. And finally, to Preet himself.”

  “So these guys weren’t listening?” I darted to the conclusion. Enough foreplay, I’m about to explode here. Let me know what the fuck happened.

  “I didn’t say that,” Sommers countered, a slight crack in his voice. “I’m just setting the table for you to understand how the process works. I was a little more forward today. I didn’t want them to just sit back like they did last time and not offer a word. This is a give and take. You know this helps them make their case, if they decide to take you to trial, because we’re giving them a preview of the defense strategy we plan on utilizing at trial. Without the element of surprise, they can spend the next nine months trying to find witnesses and tasking investigators to debunk our approach.”

  “I gotcha. We’re opening the kimono.”

  “A little bit, yes,” Sommer said. “So you’ll recall that at the last meeting, we laid out our story and they basically took notes. This meeting, I started by asking them their thoughts about the last meeting. What did their superiors say about it, and so forth? They said they went over all the evidence, everything we told them last time, and while they agreed that your case was dramatically different from all of the others involved, they still felt they had enough evidence, even if some of it is circumstantial.”

  “SOME of it?” I shouted, struggling to keep my voice below a bellow. “Give me one piece that’s not circumstantial! What direct evidence do they have?”

  “That was the very question I posed to them,” Sommer replied. “I said, ‘Guys, if you can give me one piece of direct evidence that my client had Material Non-Public Information when he traded 3Com, I will get up from this meeting, stop wasting your time, and leave right now. One piece, and we’re through today. You won’t hear peep from me about a DP or dropping the case again.’”

  “Right, so what did they say?” I asked.

  I liked that Sommer was finally—finally!—putting their feet to the fire. Took
a deep breath, wondering what they had done next.

  “It was crickets, Mike. They didn’t say a word. I have to say, even I was surprised. Now, before you get too excited, this doesn’t mean that they don’t have direct evidence.”

  “They don’t. I’m telling you.”

  “I know. But with all due respect, Mike, I would rather hear it from the US Attorneys prosecuting the case than from you. They’re the ones that have to make this case and meet the burden of proof. We don’t have to prove you are innocent; they have to prove, beyond a reasonable doubt, mind you, that you are guilty. And either they don’t have it, or the other more troubling option is, they are not disclosing whatever they have … keeping their kimono closed, so to speak.”

  “Nice give and take. We give. They take.”

  “Sometimes that’s how it works, Mike. Anyway, again, either they don’t have any direct evidence or they are not sharing what they have. It might be the latter. They did say there are other witnesses and more discovery they plan on producing next week. Any idea who that might be?”

  “Another witness? A cooperator? No idea. Could be anyone. I didn’t know most of these guys so there could be others.”

  “Remember, Mike. Even if they don’t have direct evidence, they can still make a successful case on circumstantial evidence. That’s the way some insider trading cases were made in the ‘80s.”

  “Right,” I said. “But doesn’t it say something when you have two years of body wires and wiretaps and the best you can say is ‘circumstantially they traded around the same?’ And every other person in this case has massive, direct wiretap evidence against them?”