Saving Jason (4 page)

W
hen Virgil Becker’s father ran his investment bank over the cliff, I was called upon to help his son pick up the pieces. Virgil now owed me large. The contract said he had to pay me whether I showed up or not, but I was old-school. I showed up.

“What are you working on?” Virgil asked.

“Penny stock trading. There’s a broker out in Stony Brook who’s been putting his clients into some microstocks. Compliance cleared it, but I didn’t like the way it smelled. I did some looking into it, and now I think it stinks.”

“See Aimee when we’re done. She can handle it.” He tapped a few keys on his computer. “I’ve got something else I want you to focus on.” The computer beeped at him—politely. “She’s expecting you.”

“Listen, Virgil, this thing with the penny stocks could be toxic.”

He wasn’t convinced. “How much money is involved?”

Commissions on the trades had run to just over two million dollars. I did some quick math. “Proceeds of around one hundred mil.”

He could tell that I wasn’t being entirely forthright. “How badly did the account get burned?”

That was the oddest thing about the trades—the clients were making money. “It’s complicated.”

“What’s the hit?”

“Actually, they’re up around ten percent. Two years running.”

“Well, that’s intriguing.” His delivery was deadpan.

Penny stocks did not produce steady returns. Each one was like a lottery ticket. And they paid off a lot less frequently.

“I know,” I said, “it sounds like I’m chasing moonbeams.” I took out
my cell phone and opened the file of photos. “But take a look at this before you make any quick decisions.” I quickly scanned through the shots I had taken of the trucks, looking for one that might best sell my point. One dark, hurried, often blurred picture after another. Either the flash had not gone off, or when it had, the resulting image showed nothing but starbursts of reflected light. If you squinted and used your imagination, you could see that they were pictures of trucks. They could also have been outtakes from some moody noir movie filmed at night in downtown Detroit. “Never mind,” I finished lamely. I vowed to look up how long I had before I could get a cell phone upgrade.

“Hand it over to Aimee.” It was an order, but he said it kindly.

“Aye, aye.” Aimee Devane was head of compliance for Becker Financial. We did not always play well together. She tended to treat me like the pet cobra—I was convenient for getting rid of rats and mice, but she would have preferred a cat.

“Now do I have your complete attention?” Virgil said it with a smile, but with just a bare hint of impatience.

“I’m with you,” I said. “What do you need?”

He checked his watch. “I have just a few minutes to bring you up to speed, then I have another meeting.”

“Sorry. The holdup is my fault.”

He waved a hand to change the subject. “You’ve no doubt heard the rumor going around that the firm is in play.”

I had not heard it, but then I was not a welcome member of the rumor circuit. Conversations tended to stop midsentence as I approached. My nickname on the trading floor was Darth Vader.

“Who’s the buyer?” I asked.

“That’s why I need you. Whoever it is, they are being very careful not to reveal themselves. Large blocks of shares trade, but the buyer is always a cloaked account. Offshore, or in the name of a trust or a law firm.”

There would be willing sellers out there, too. When the father’s
firm was broken up and Virgil took the reins of the remaining brokerage and investment banking businesses, many of the creditors and investors who had been scammed out of their savings by the father received shares in the new firm as partial compensation. Now that Virgil had turned the place around and made it a viable business, the stock price had recovered substantially. Those who had held on through the whole maelstrom were now being rewarded for their patience, having been made whole, or almost so, by the rebound. It was found money.

“No one’s approached you?” I asked.

“Not exactly. I had a rather clandestine meeting with a lawyer who claims to represent a consortium of buyers. I said I wasn’t interested in selling, but I’m always willing to listen. I suggested we have our bankers sit in on the next meeting.”

“What’d he say?”

“It spooked him. ‘No bankers,’ he said. ‘This is a private matter.’ It was the strangest pitch I’ve ever heard of. We were having dinner in a private room at the Waldorf, and he stood up and walked out between the salad and the entrée.”

“How much does the family own?”

Virgil’s family made the Borgias look normal. His older brother, James, known to his friends and enemies as Binks, had become a permanent resident in a rehab facility out in Sedona, Arizona, where it was easier to keep his heroin habit in check; their sister, Morgan, was serving time in a minimum-security facility in Rhode Island. The youngest brother, Wyatt, was an Aspy with limited interests. He lived with his mother on the family estate in Newport. The mother was a powerful and protective New England martriarch whose main caloric intake was high-end vodka.

“Like most of the top employees, I own some shares. Ninety percent of my pay is in stock. A much bigger block sits in a trust. Mother is the trustee—she set it up after putting up a sizable portion of the cash I needed to get the firm up and running again. The beneficiaries of the trust are the four siblings. The trustee votes the shares. There
may be ways around the restrictions that I don’t know. All told, however, it comes to less than a third of the outstanding float. Anyone making a play could end-run all of us, if they had enough capital.”

“It would be a lot easier if they had one or more of you on their side.”

“If it’s family, that makes it . . .” He paused, searching for the right word.

“Complicated?” I said.

“Venomous,” he replied.

T
here was a knock at the door and Virgil called out, “Come in, Jim. You’re right on time.”

A hint of aftershave preceded the man. Something manly. Old Spice. Bay rum. Kentucky bourbon. Something like that. He looked like he had just come from the gym, his hair still wet from the shower and slicked back like Pat Riley. He had a cocky smile that said,
We both know I’m faster, stronger, smarter, and more aggressive than you ever were or will be, but don’t hold it against me.

I stood up and prepared to leave, but Virgil stopped me. “Don’t go. I want you to meet the firm’s latest acquisition.” He was grinning with barely concealed pride.

The man faced me. If he was at all discomfited by being referred to as an asset, he gave no sign of it. He smiled warmly and extended his hand. I thought that he must not know my history or my current position. Those who did rarely smiled at me, warmly or otherwise.

“This is James Nealis,” Virgil said. “He’s come on board to oversee all of our investment banking. He’ll be focusing on biotech.”

“Jim,” he said. “Pleased to meet you.”

He definitely did not know who I was. We were even. I knew nothing about him. I should have. A hire at that level should have been vetted and I should have been part of the process. The head of all investment banking would be on a par, and if future circumstances warranted, a notch ahead of all other department heads. The position was tantamount to being second or third in the hierarchy. The fact that I had not been consulted grated. On the other hand, maybe my nose was out of joint about having to turn the penny stock kerfuffle
over to Aimee Devane. Either way, it wasn’t Nealis’s fault. I could, at least, be pleasant.

I shook his hand and welcomed him aboard. He was a man of medium height and build, with sharp green eyes. When he stopped smiling, his face became instantly unreadable. He would be a good poker player. Or negotiator.

We all sat down. I gave Virgil a quizzical look to signal that I wanted more information—especially why I hadn’t been included in looking at the new hire. Virgil smiled at me instead of answering.

“Jason works directly for me,” Virgil explained to Nealis. “He is my last line of defense. When legal and compliance can’t fix a problem, Jason often can. The firm would not have survived without him.”

He turned to me and continued. “Our people have done well in industrial biotech—white—but we’re lagging in the hot areas—agricultural and medical—green and red. I don’t expect us to be in position to take on Goldman Sachs anytime soon, but a few small successes will make a big difference here.” It was a nice speech from someone not given to making them.

Nealis surprised me. “I know what you do here, Jason. I’ve heard the talk. It’s great work. These times call for strict compliance and it’s good for Virgil to have someone he can trust who can work outside the normal channels. It’s too easy for a bureaucracy to accept the status quo. You’re the man to shake things up.”

I thanked him, though I felt like something important had just happened and I had slept through it.

“I’m still getting used to being overhead,” I said. On Wall Street, if you are not a producer you are an expense. “It’s good to see the firm attracting major talent.”

Nealis chuckled politely at my self-deprecating comment and smiled graciously at the compliment. “I’m looking forward to working with you,” he said. “My background is
math
also. We geeks need to stick together.”

I returned the polite chuckle. I had been a math major up until the point that I realized I was never going to be the next Rasmussen. I graduated a business major. If he knew that much about my background, he had done some deep research. He was more than a few steps ahead of me.

The speeches were over and I had work to do.

A
imee Devane had been hired during the bad old days when Virgil’s father was running his multibillion-dollar Ponzi scheme that supported his financial empire and a lavish lifestyle. The fact that she had survived the investigation and the ensuing purge said she was a formidable infighter—or that she was squeaky clean. Or both.

Compliance protected the firm, not the employees. Good compliance officers could be a manager’s best backup, finding and isolating problems before they became disasters. Bad ones behaved like mad-dog KGB agents. They earned nicknames from the trading desks like Dirty Harry and Popeye Doyle, names that they wore with misbegotten pride. It was a culture that tended to see the world in black-and-white terms and regarded all other employees as criminals, either active or not-yet-active. A sure sign of criminal activity was if a trader was making money—or losing it. I did not see the world that way.

I worked for Virgil and investigated the gray areas. There were plenty. Not every misstep is a crime. And not every trader who makes a mistake deserves to be drawn and quartered. In the end, the game is about taking risks and making money, and traders need to know they have the latitude to take those risks and the confidence that management will back them up.

But the pendulum had swung the other way since the mortgage scams of the pre-crash era. When bubbles burst, they rarely hurt the most egregious offenders. A lot of bad actors had survived unscathed, but the industry as a whole had suffered. Compliance was now the fastest growing department in the firm—and the same applied for all our competitors. Aimee Devane held the reins. If she wanted to shut
down a department or branch office, it was gone, with no appeal. I’d been told that she was fair, but all I’d ever seen was tough.

Her department was on the other side of the executive floor at Becker Financial. I walked past the elevator bank and through a double set of doors. Cubicles made a maze of the space with a line of tiny offices against the opposite wall. I threaded my way through until I reached Aimee’s secretary, a harried-looking lifer with gray hair tied back in a tight bun and a chain holding her glasses. I announced myself and tried to make myself look patient and in no particular hurry.

Aimee didn’t keep me waiting; that wasn’t her way. She may have been cold and tough, but she was also much too sensible to put on an act.

“Have a seat, Stafford. What’ve you got?”

Aimee was also very attractive. That day, she was wearing a pale green suit with an even paler silk blouse. They were a great match for her blazing red hair and hazel eyes. I had heard that she studied muay Thai, commonly called Thai kickboxing, and competed regularly. If the purpose was to help her stay in shape, I would say it was working.

“Penny stocks,” I said.

“Every stock trade under ten dollars a share is pulled and reviewed for price to the market, markup, and suitability to the client. Nothing—I repeat,
nothing
—gets by my people.”

“‘Suitability’?”

“Only sophisticated investors get to play in penny stocks. Even then we watch the action. If the position drops by twenty percent, the broker gets a call from my office.”

“Suppose the client was making money? Every time. Every trade. And clearing a ten percent profit regularly over the last two years. Would that raise any flags?”

She cocked her head. “That wouldn’t necessarily show a flag in our system.”

“But you agree it sounds suspicious.”

“Odd, maybe. Suspicious? I don’t know.”

I nodded. “Worth looking at?”

“This sounds familiar. This wouldn’t be the young gun out in C-3, would it?”

C-3 was the branch code for Stony Brook, Long Island. “That’s the one.”

“Yeah, we looked at him, maybe six months ago. Maybe less. The client is an FA, so no foul. Not our problem.”

“FA? Financial advisor?”

“They can trade anything they like. We just execute for them. They take all responsibility for their clients. Becker Financial is only on the hook if they’re playing on margin. That’s a credit call, not a regulatory issue. My people cleared them.”

“It doesn’t bother you that all the stocks they trade in are related somehow?”

Her eyes flicked to her computer monitor and back. “You’ve got five minutes. Convince me.”

I told her that I had pulled all the old documents relating to the IPOs—initial public offerings—of the companies involved. There were two different bankers involved, both small firms that had gone belly-up—one during the recent crash, the other back in the tech crash of 2000.

She shook her head dismissively. “They’re microstocks, right? How many players are there focusing on that market? Can’t be many.”

“My five minutes isn’t up yet,” I said.

She actually smiled. “My office, my clock.”

“Rose Holdings,” I said. “They all have long-term leases with the same entity.”

She gave a half squint. “Who?” Her expression was clear to read. I was stretching.

“Rose Holdings. There is no record of any such company in New York State. Except for the deed on one piece of property.”

“You have seconds left,” she said.

“Okay, but why would every single one of those companies maintain
a fleet of their trucks in the same warehouse? A warehouse that doubles as a chop shop out in Suffolk County.” I kept the bison to myself. I thought a mention might hurt my credibility.

“So, it’s more than odd. It might even rank as suspicious. But it’s nothing to do with us. Call the police, if it’s really bugging you.”

I wouldn’t. I didn’t know what I would do, but I really had nothing more than a feeling of vague unease.

She flipped her hands over and raised both eyebrows. I got the message. I had brought her nothing, and she had nothing more to say.

“Thanks anyway,” I said.

“Come back anytime,” she answered. I didn’t think she meant it, though.