Authors: Tom Connolly
Precisely at 10 a.m. brothers Tom Barrett, the president and CEO, and his brother Rob Barrett, the VP of World Wide Sales, were apprehended and brought in for questioning from their offices at Rocket Solar. Sid Rogers and Alice Kraft were similarly were picked up at their offices at Blackthorn Investments. It was only hours later after questioning that formal arrests were made.
Not “apprehended” but invited in for interviews by members of the task force at precisely the same time were a number of others tangentially involved in the case where no direct evidence yet tied them to profits from insider trading. These included Valerie Samson from Blackthorn who through Blackthorn initiated a “Buy” recommendation on Rocket Solar three days earlier and had calls back and forth to Edward Wheelwright at Brunswick Fund; Edward Wheelwright and Kishenlal Moira from the Brunswick Fund; and Parker Barnes, a private investor, each of whom had been identified by Leonard Crane as trading on insider information on Rocket Solar, but where the task force had yet to find trades in the stock at Brunswick or in the men’s accounts, and Winston Trout, who as head of a competitor solar company, Trout Solar, had numerous contacts with Edward Wheelwright, on the same dates that Wheelwright had talked with Val Samson and Alice Kraft from Blackthorn Investments. All the interviews took place in New York, except for Wheelwright and Samson, who were interviewed in Greenwich and for Parker Barnes who could not be located at his office or home.
While the task force had more than enough evidence for convictions against the Barrett’s and Rogers for profiting from insider trading and sufficient evidence against Alice Kraft for conspiracy to commit insider trading, they interviewed the others to see what else fell from the tree. They were searching for evidence against those being interviewed; failing that, they felt the interviewees may be able to shed more light on the investigation.
This unusual approach was taken to limit the damage that was about to happen to stockholders in Rocket Solar. The SEC had insisted that they needed to move at this time since the stock of Rocket Solar, partly due to the Valerie Samson recommendation and “Buy” rating, was rising and more investors were buying into it. The apprehensions were not made public, and the interviewees brought in for questioning were kept out of the limelight. During the day on Friday, Rocket Solar rose another $3 per share to $17. Friday, and over the weekend the task force had to move quickly, formally arrest those where the evidence was irrefutable, gain additional evidence against those who may have been participating in these schemes, and then announce the scheme publically. Some stories were bound to appear over the weekend as the apprehensions and interviews of those involved were drawing attention. Many innocent investors were about to lose thousands, even hundreds of thousands of dollars.
The surprise of the day was not to any new dimensions the investigation took but to the individuals themselves involved or not involved. For example, Valerie Samson and Edward Wheelwright had been on vacation time during the week, getting reacquainted with each other and their son. So it was no small surprise to Valerie that she had issued a “Buy” recommendation on Rocket Solar, something that she was easily able to refute while the investigators were at the Greenwich Police station with her, where they arranged space for the interview, simply by pulling up on line her final of the recommendation that said, “Sell.” This was further confirmed on the spot by a call to her boss who told of the pressure Sid Rogers was putting on Valerie for a “Buy” rating, which she refused to issue.
Edward Wheelwright was astounded that calls to him from Alice Kraft and Valerie Samson and his calls to Winston Trout were being construed as evidence of insider trading where nothing could be further from the truth. To back his version up, he cited proof that he fired Leonard Crane for cause, the cause being unethical behavior. Additionally, Alice Kraft confirmed that Wheelwright had called Samson, who got Kraft to stop any further attempts at insider trading. Kraft also told the officers that it was Wheelwright who had been very good in helping her understand her errors. Finally, the confirmation of no trades at all in Rocket Solar vindicated Wheelwright.
Kish Moira admitted that Crane and Barnes had come to see him and wanted to buy hundreds of thousands of shares of Rocket Solar, and after Crane and Barnes had left, he decided to talk with Wheelwright. It was then that he learned why Crane had been let go. He explained to the investigators that, while he and Wheelwright were partners, Wheelwright handled the people end of things and he handled the technical. On investments he told them they made joint decisions, particularly the brothers’ investments. The reason he had gone to Wheelwright in this case is that from what Crane had been saying to Barnes in front of him it sounded like a bad deal, like Crane had some type of insider information. Wheelwright explained what had been going on and together they invested Barnes’ money in Trout Solar, a trust the brothers had given Edward and Kish, to make the right investments, no matter what.
Sidney Rogers initially denied all charges. Throughout the day his story changed several times, and new information was called in. When confronted by the wire taps, his own e-mail between the Barrett brothers, double confirmation by Samson and her boss that it was Rogers who initiated the “Buy” recommendation on Rocket Solar, and records of hundreds of thousands of shares of Rocket Solar bought and partly sold by him, Rogers was ready to confess to his part of the entire scheme for some leniency.
“And in return, what help can you provide so we understand how this all began?” Jack Kent asked.
“I can tell you exactly what and how the Barretts were doing what they were doing.”
“Explain.”
“And for this I will get?”
“Consideration as a cooperating defendant.”
“Meaning no jail time?”
“Far from it. You will be going to jail for a very long time. Just not as long as you might otherwise.”
“Forget it.”
Jack Kent said, “Well you might have saved yourself ten years, since we know exactly what the Barretts were up to. Now you’ll have to do the complete twenty-five years. Valerie Samson was able to give us a complete rundown on the orders from the Chinese solar manufacturers, their out of date technology, how Rocket would announce the orders after you did all your buying, and how you and the Barretts would be out of the stock in six months when the orders were confirmed as no good.”
“That’s all bullshit,” Rogers screamed.
“You must have really pissed Samson off by changing her recommendation. She actually gave us tapes of your last couple of conversations. Threatening a lady is not a good idea.”
“Yeah, well she also was willing to deal on that 92nd Y. She would give the recommendation if my wife got her kid in.”
“Yes, we have that on tape as well. It looks to us like she didn’t act on the position you were able to secure. Looks like your wife may have to resign from the board there. That place sure gets a lot of attention from you financial types trying to get your kids in there,” Kent concluded, unable to resist the jab.
By 9 p.m. Friday night, Tom and Rob Barrett had been read their rights and arrested for securities fraud. Similarly, Sid Rogers was arrested for securities fraud and profiting illegally from insider trading. Leonard Crane was formally arrested for attempting to aid insider trading. He was not charged with insider trading and would not profit from any trades he made since the markets were closed, and his various accounts held several hundred thousand shares that would be under water come Monday. Alice Kraft was not charged and was listed as a cooperating witness.
Wheelwright, Moira, and Samson, after a full day of questioning that went well into the night, were thanked for their cooperation and asked to give signed statements as cooperating witnesses, which they did.
In the car, on the way back to their home, Valerie said to Eddie, “A couple of Saturdays ago I had an opportunity I wanted to talk with you about. Do you remember?”
“When we met over at Tod’s Point? I thought that was just a ruse.”
“A ruse? For what?”
“You know, to get back together,” he said and then winced as she whacked him in the gut as he drove.
“You conceited bastard. Did you think I couldn’t live without you?” she laughed.
“Yes, because I could not live without you. It seemed a perfect way to get us together.”
“Well I’m glad it worked out, but that wasn’t the reason.”
“So what was the opportunity that was so important?”
“Never mind.”
“Seriously, what was it?”
“I forgot.”
“Val?”
“I was going to suggest me joining Brunswick Fund to do research.”
“Really?”
“Was.”
“It’s a great idea. The thought of the powerful McGuire brain and the beautiful McGuire girl beside me all day. We’d need a private office.”
“Where does your mind go? Anyway, that was the idea. After today I think I will be very content being Mrs. Wheelwright, the mother of our son.”
“An even better idea.”
Wheelwright called Kish Moira from his cell phone as they pulled into their driveway. “How’d it go, Kish?”
“Fine, they thanked me, had me sign a statement on what I told them. How about you?”
“Yes, same thing.”
“Eddie, thanks. That was a brilliant move not to follow Lenny and Parker into Rocket Solar.”
“We want to get ahead, Kish, but not that way. Your instincts were right in bringing the transaction to me so we could discuss it. That’s why we’re a great team.”
“Brothers till the end.”
“I’ll see you at the church tomorrow; I’ll get a car to bring you out.”
“Big day for Winny. I’ll bet he doesn’t sleep all night.”
“After today, neither will we. Good night, Kish.”
“Night, Eddie.”
“You guys make me sick with this brother shit.” Valerie said sticking a finger down her throat.
Chapter 72
At 2 a.m. on the day Winston Trout was to wed, he and his six Brunswick friends were abed. But only one slept in his own bed.
In the mansion, Ball Hall, the fluffy white Snowman of his childhood sat on the dresser next to Sebastian Ball’s empty bed. This night Sebastian was in bed with Jane Lane, wife of the Arizona environmental commissioner, who Ball had been calling on to get a large solar farm approved for the Arizona desert.
And young Mr. Wheelwright was not in his usual bed with Santa Alba but back home, in the guesthouse. Lying silently, contentedly naked next to him was the former future, now future again, Mrs. Wheelwright, Valerie Samson.
Kish Moira lay uncomfortably, not in his home in Murray Hill, not in his bed, but on a couch in his office. Sugar plum fairies were not in his dreams; what jumped over the fences in the meadow were not sheep. Millions of Rocket Solar panels were lined up, row after row, for miles in the Arizona desert, attached to the Western Grid. The lines ran alongside the path of the Colorado River, and as the river filled the pipes of homes in Los Angeles, the lines in the grid brought in the power for the homes. When the power went into the homes, they all burst into flames. Hundreds of thousands of homes in Southern California all on fire, a great conflagration sent walls of flames into the hot, dry valleys. Kish was jolted awake. He lay fully clothed, sweating in the dark on the couch. Four days earlier he had worked all evening reviewing the executions of the day’s trades in Trout Solar. Earlier, he knew Edward would be upset for the risks he proposed taking in Rocket Solar, but after talking with Parker Barnes and Lenny Crane two days before, he agreed to buy all the shares Parker wanted. Parker gave him checks for four million dollars in eight transactions from Barnes Construction to his personal account in the Brunswick Fund. Kish didn’t understand the reason for separate checks of five hundred thousand dollars each, but Parker was always doing things a little differently anyway. Kish, after listening to Barnes and Crane made a determination that the information they possessed about Rocket Solar was not insider information since it was twice removed from the source, decided to match their five million with five million from the fund. Throughout the day he held back from purchasing one million shares in the solar company. The stock’s volume was rising to three times its daily average, and the stock price had moved up three dollars. They could still be in early, Kish thought, and would make a killing. Something though told him to review all of this with Edward Wheelwright before pulling the triggers. Wheelwright realized his own mistake in not keeping Kish up to speed on why he fired Crane and what he knew about Rocket Solar. After a brief discussion, Kish got it, and both agreed to do the transactions, but not in Rocket Solar, in Trout Solar. Kish fell back to sleep, exhausted from the questioning by the SEC over potential insider trades of Rocket Solar, not one of which Brunswick Fund made. He promised to say a prayer of thanks at Winston’s wedding to whichever God had watched out for him and Eddie.
Chunk’s sister, the beauteous washer woman of San Blas, slept a sleep of joy, the strong arms of the warrior Tray Johnson around her, in her modest home in Coamo.
The groom to be, one Winston Trout, was focused on every detail of the wedding and went so late he took the guest apartment above the Stamford Yacht Club where the reception would occur the following day. And in the guest room next to him was not his bride to be but her father. He worked side by side with his son-in-law-to-be. They had become fast friends, and James Albright treasured the man who would be his daughter’s husband.