King of Swords (Assassin series #1) (41 page)

“Damn it. They’re doing it again,” Steven muttered to himself. “The stock’s up again on no news – it’s like the market’s completely ignoring reality.”

“Honey, what’s up now?” a sleepy female voice called from upstairs.

“Nothing. I’m just watching junk being sold like it was platinum, and losing money each tick up.”

“Don’t get too worked up,” she said. “I’m going back to sleep. Wake me up around eight, and don’t forget to turn off the coffee machine or it’ll boil down.”

Steven focused on the screens. On the right were three windows with tables of numbers blinking and changing constantly. On the left was the familiar format of the Internet message boards. Overlaid were several open browser windows with websites partially displayed.

All the windows and screens had the same symbol on them.

APDT. Allied Pharmaceutical Development.

Not exactly a household name; a Milwaukee-based conglomerate that specialized in early stage biotechnology development – one of thousands of entities that made up the landscape of publicly traded companies in the U.S. markets.

And Steven’s current object of fascination and frustration.

*****

Across the continent, the same symbol was displayed on another set of computer screens twenty-four stories above Wall Street, in a lavishly appointed office with a panoramic view of the New York skyline.

“Take it up another few bucks, and then let’s dump it and take out the stop losses.” The voice belonged to a man in his late fifties hunched over a speakerphone, his grey, curly hair framing an artificially tanned, heavily-lined face. “Knock out at least twenty percent and run it into the ground before we start covering…”

Nicholas Griffen was also not a household name, and yet he’d achieved a certain notoriety on Wall Street – an infamous trader, investment banker and financier who specialized in biotech. He managed a $1+ billion domestic venture fund that invested exclusively in early to mid-stage biotechnology stocks, and was also the director of an offshore fund based in the Caribbean.

Griffen’s technique was to make money promoting companies, and then create volatility, swinging the stocks up and down by related-party trading and passing out insider tips – profiting from both the increases and decreases in price. He’d be long on a company, holding options and shares whose value increased significantly when the hype started on the stock, and then when his network of media cronies and pet analysts created a frenzy of buying and speculation resulting in triple or quadruple-digit percentage gains, he’d contrive a media event that would tunnel the company's share price. Of course he’d have sold all his long positions at or near the top, and gone short to profit again from the fall – and once he’d panicked the market, he’d reap even larger gains on the trip down.

Shorting stocks involved borrowing shares from a broker and then selling them, in the expectation of being able to buy them back and return them to the broker later, when the price was lower. It was a bet on a price decline, where the value of the short sale increased as the price of the stock fell.

Griffen had long ago discovered that the economics of manipulation and destruction, of pumping prices up artificially then driving prices down, were far better than those of trying to choose winning companies and buying their shares, waiting for the world to discover their merits. It was much easier to create a mania over a company’s massive price increases and hugely profitable potential, and then panic the crowd by screaming fire in the crowded theater, profiting from the ensuing chaos via short selling. In the ensuing panic, investors sold first, and asked questions later. And the more pronounced the fall, the more panicked they became, generally.

Griffen’s group was expert at using his network of media sources to create a bubble in a stock by hyping a company with marginal or no real technology or value, and then using a deluge of unlimited selling to panic a market, thereby destroying the company’s market cap. The term for it was pump and dump – it was illegal, but the regulators rarely if ever enforced the rules, so what the hell. Only an idiot would drive fifty-five if there were no cops around. And Griffen was no idiot.

He knew from experience the market was a zero sum game – and for him to make a fortune, investors on the other side of the bet had to lose. That’s just how it worked. Zero sum. The trick was to ensure you were on the winning side.

The second line rang.

“Griffen – what?” he barked at the box.

“They’re nixing any more shorting until we deliver the slug from last week on Allied. Said this afternoon’s a non-starter; the regulators are in today and they’re looking over shoulders,” advised the calm, unemotional voice.

“Is there any room to wiggle?” Griffen inquired.

“Not now. Maybe tomorrow, once the shop’s back to normal.”

Griffen sighed. “All right. Puts a crimp in today – but them’s the breaks. Let’s talk tonight…”

He punched the other line back into active status. “Change of plans. Start covering the shorts. Pick up a few thousand, sell off a few hundred from the Pac Ex, walk the ask down and then see if anyone bites. Rinse and repeat. Get us whole for the day.”

“No
problemo
, boss.”

Terminating the call, he watched as the stock price slowly fell, went back up a few cents, swooned again, went up again. He considered his performance that of a virtuoso musician, and he delighted in being the stock-gaming equivalent of a maestro…in a long tradition of master manipulators who’d worked on Wall Street for the last hundred years.

This was his province, his world. He was in his element with the ticks on the screen, representing tens of millions of dollars to be made or lost.

Griffen was one of a rare group of financial movers and shakers who were largely above any regulatory or law enforcement probes – small token fish were occasionally nabbed, but the real money jockeys were untouchable. On the contrary, he received preferential treatment from the SEC, which came in handy when he needed help with a particularly troublesome stock. There was nothing like a trading halt or an investigation to crater a company, at least long enough for him to make a few bucks.

He was sharp, smooth, refined, and completely amoral. And most importantly, he was rich.

*****

Emil spoke into the specially configured phone in a soft, emotionless voice. The phone’s encryption technology ensured prying or eavesdropping ears would decipher nothing but a screeching data stream, using Department of Defense-level scrambling.

“It really is perfect. Given our level of financial commitment to the opposition party, we could easily get them twice as much as they need this year.”

Emil Weingard worked within a rarified division of the government’s clandestine machine, responsible for making things happen in deniable ways. Officially he was in the Information Operations Center/Analysis Group, but his real role was much more important than that. He was a fixer, and had gained notoriety at West Point by writing his thesis on a highly autonomous strategy for running covert missions, coupled with some intriguing alternative mechanisms for funding them. He was recruited shortly thereafter.

His job was to procure large amounts of cash for delicate projects that were essential to national security – projects that Congress wouldn’t necessarily approve of. He currently had two active deals, one of which involved the continued support of an anti-establishment dissident group in Iran, and another which involved untraceable support for a splinter faction in the German government.

Emil fancied himself a secret agent of sorts, but deep in his heart he knew he was a banker. The irony that he’d conceptualized a self-sufficient team approach to clandestine operations and had wound up being the bean counter wasn’t lost on him, but he was pragmatic. After the disastrous revelations of Iran Contra, the more sensitive agencies couldn’t afford any embarrassments and the only way to compartmentalize and seal off the risk was by using a tightly limited approach to the problem. Emil had come up with his team’s funding sources, which later became the standard for most of the other teams. How many others, he didn’t know – and ‘Need to know’ was still the guiding principle.

Right now he was on the phone with his man in Istanbul, who interfaced with the Iranian contact every few months. Another payment into a numbered account in Austria was required at the end of the quarter, and the man in Turkey wanted to ensure they were game-on.

They were.

They always were when Emil was running the money.

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Griffen pored over the pile of computer printouts stacked a foot thick on his scarred mahogany desk; a relic from the 1920s rumored to have been the infamous short seller Jesse Livermore's, that he’d acquired for twenty thousand dollars when he’d opened his offices. Its battered presence was a constant reminder of the history of Wall Street, and the brutality of the market’s whims. Fortunes had been made and lost in hours during frenzies, and Griffen, more than most, understood that you had to be driving the frenzies in order to come out on the winning side. To do so meant rigorous determination, exhaustive research, and most importantly, the ability to control what information made it into the marketplace, as well as the timing of its dissemination. He who controlled the printing presses controlled destiny, and Griffen bought ink by the barrel. He created reality, and his associates in the media parroted his spin without question. That's the way the markets had worked since the stock exchange was built, and he'd merely refined a time-honored tradition and applied it to his own specialized segment.

He absorbed the row of figures, mentally digesting the balance sheet and preparing a rationalization that would paint black as white, and make a loser into a winner. It would take some massaging to prepare a story where the endless bleeding of cash in this company's history could be sold to the rubes as having built a foundation for limitless success in the near future, but if anyone could make it happen, Griffen could. He was a master of putting lipstick on pigs, and convincing hapless investors that this time was indeed completely different.

In the only clear corner of the scarred table-top a forgotten cigar smoldered in a heavy onyx ashtray. The office, even though well-ventilated, had a perennial odor of leather, cigar smoke, and agitation. It was the smell of the market – the smell of money.

Griffen kept long hours, driven by a love of the action involved in fiddling the system. There was never enough time to accomplish everything, never moments where he could let down his guard – and the challenge of staying on top kept him energized and motivated.

He’d triumphed in a world where only the most cunning and nimble survived. He’d amassed a fortune building manias and then collapsing them.

Unlike many traditional venture capital funds, Griffen’s investment group was nothing more than a large pool of cash which traded however he felt appropriate. A big attraction of his fund was that nobody asked where all the money came from; there were no annoying disclosures to make, no boxes to check, no forms to complete. Even in a world of Patriot Acts, reduced rights, and financial transparency, Griffen enjoyed complete secrecy in most of his affairs. That had always been the lure for him – as a young man, he’d seen a lot of possibility in Wall Street’s selective lack of regulation. He remembered it like it was yesterday.

A Yale graduate, he’d paid his dues by spending eight years as an analyst, and then later as a trader with one of the big brokerages, hating every second of it while building a network of contacts. In the late seventies he quit and launched his eponymous fund, partnering with a childhood friend from New Jersey.

Griffen had pitched several Italian union pension funds and waste management groups on a neat way to invest the deluge of cash pouring in from the surge in demand for their services; as well as from the expansion of cocaine and heroin trafficking on the eastern seaboard. The groups had been receptive to creating a veneer of respectability, and were enthusiastic in their response to his proposition; their money got laundered via his venture capital and stock trading activities and they saw a good return on the newly sanitized loot. It was a win for all involved.

With those early investors he’d found his first serious money, and from that point things accelerated as the newly respectable investors told their friends about their smart new investment advisor. Griffen soon had a runaway success, and was oversubscribed from his first formal funding raise. In time, legitimate clients were attracted by his spectacular results; and over the years, the Street forgot the hints of his questionable beginnings.

Building on his initial relationships, Griffen became a ‘go to’ guy for shady figures wanting an in on Wall Street biotechnology action. His door always open to the fringe players and the dirty money – a specialty that rewarded him handsomely. His unique customer mix and their powerful contacts shielded him from intrusion by the authorities, enabling him to refine his pump and dump game to a fine art.

Create a bubble, then pop it, and only
he
knew when it would collapse. It was simple, effective, and highly lucrative, albeit illegal and unethical. Then again, all great fortunes had great crimes at their root, and Griffen was simply using the same techniques the stock manipulators of the Roaring Twenties had used to build dynastic wealth. Just as icons like Joe Kennedy had created manias in worthless companies, then once the public was enraptured with their shares, kicked the chair out from under them and made millions as the stocks plummeted, so too did Griffen. Human nature hadn't changed much in a few generations, and the same techniques worked, again and again. Only an idiot obeyed the laws, especially when the regulators were asleep at the wheel and virtually never enforced them. He was comfortable that he was a criminal – actually reveled in the knowledge, truth be told. All the wealthiest of the Wall Street mob were gangsters at heart, in spite of the tripe the industry’s PR machine put out day after day. It was just far more lucrative to carry a cell phone and a calculator than a machine gun, these days. Everyone at the top knew how the game was played. Big gains required big balls, and often meant crossing lines that lesser mortals were barred from even considering breaching. That was the game, and he was very, very good at it.