"How much does this kind of building cost?" Chen asked.
An amazingly ill-mannered question. "The whole building?" said Martz evenly. "Tough to answer."
"I am having—I have apartment in Time Warner Center."
"Yes, I hear those are very good." Martz made sure he didn't appear to be mocking Chen. "The best in the city."
The elevator doors opened. The men filed out, one by one, carrying their briefcases.
Chen, surprised, looked back at Martz. "Who are these people?"
"Friends of mine."
"Yes, I see." But Chen had risen in his seat, sensing trouble.
And at that, in the moment that changed the tone of the evening, Martz leaned forward and ever so gently pushed him back down.
Chen froze.
"My friend," said Martz, "we have now arrived at the part of the evening that is most meaningful to me."
Chen sat quietly, senses alert, hands gripping both arms of the chair. His bodyguards were sitting around in the aforementioned Time Warner building, drinking beer and watching American cable TV, probably. He'd let Martz send a car for him and hadn't wanted his men to come along. A mistake, he seemed to understand now, a mistake that a genuinely rich man in America would never make.
Martz turned back to him. "Chen, you are here tonight for only one reason. Through my company I am a major investor in a small, very promising drug manufacturer called Good Pharma." He beckoned to the translator, a slim Chinese-American doctoral student at Columbia University, to come join them. The other men sat at a table near the elevator opening up laptop computers. "Start translating everything I say. I don't want any misunderstandings. I want him to get to know your voice and I want you to get to know his."
The translator greeted Chen with formality. Chen's eyes cut back and forth between Martz and the other man.
Martz resumed. "My friend Hua here has worked for me for eight years. He knows your regional accent. He will translate. You have recently been trading in Good Pharma, short selling it and driving the price down. And by you, I mean you and all the Chinese investors you advise. Very impressive, except that you did this using stolen information."
The translator repeated this.
"I am listening," Chen said in English, as if looking for a chance to negotiate.
"Tonight, you are going to call your fellow investors in China, one by one, and tell them to buy Good Pharma when it starts trading at ten a.m. local Shanghai time. They are going to buy in Shanghai, Beijing, Hong Kong, and everywhere else they do business."
"Why would they do that?"
"Because you will tell them to."
Chen shook his head. "That would not be enough."
"I suspect that you will make a convincing case."
"How?"
"Very simple. You will tell them that you have more inside information. Very good information that will make them a lot of money."
Chen said nothing.
"Hua will be sure that you tell them what you say you are telling them. In fact, we have a device here that creates a ten-second delay in spoken telephonic conversation. It was developed by radio stations for the purpose of blocking any accidental transmission of FCC-prohibited language." Martz pointed at the translator. "Got that? Did he understand that? This device is also used by unscrupulous traders to front-run major trades ordered over conventional telephone lines. It's illegal because it is so effective. Hua will listen to everything you say and if he feels that you aren't speaking exactly to them as we have instructed, then he'll hit a button on the unit and your voice will disappear.
"Furthermore, Mr. Phelps, one of the men at the table over there by the barbecue range, will be watching your voice on a stress analyzer, and if he feels that your voice sounds like you are lying, he will knock out the tones at the high end so that a stress analyzer on the other end, or the human ear, which in my opinion is just as good, will not hear any suspicious tones in your voice. Mr. Phelps had twenty-three years with the CIA and is well versed in these techniques. Mr. Phelps?" he called.
Phelps came and stood before Chen, with his hand out.
"You will now surrender your cell phones and electronic devices and so on."
Chen gave him two phones and a beeper.
"Please remain comfortable," Martz said. He got up to go see Elliot on the other side of the terrace.
"Everything okay?"
"Hi, Billy Martz. Yes, we're set up, more or less. I spent the day at the office getting everything ready." He had three screens open, powered off one of the waterproof exterior plugs that Connie used for her elliptical motion machine that she kept stored on the roof, spending
hours climbing a little closer to heaven or wherever it was his wife ultimately planned to arrive.
"You have all your power, all your communications?"
"Yes."
"Is it technically very difficult?"
"This technology has been around for a while now. You want tricky technology, go play around with stem cells."
"If you say so."
"Bill, you're turning into a fussy old man." Elliot smiled, patted him on the back. "You go do your thing and I'll do mine."
But he lingered, looking over all the equipment, amazed at how small it was, except for the large white transmission cone on a ten-foot telescoping tripod that had been hauled in and positioned earlier in the day. The key to a successful lift, Martz knew, now that almost everything electronic was traceable, was to move the communication not just from place to place, and from government jurisdiction to jurisdiction, but across technologies. Moving across each of these boundaries made it harder for any interested authorities to re-create the sequence of illegal communications. From what Martz understood, Elliot's men would, that evening, be communicating directly with a boat about one hundred feet offshore in New York Harbor. The mode was a digitally compressed and encrypted microwave beam, which required line-of-sight transmission and was effective only up to a few miles. Did not travel with the curvature of the earth. It couldn't be used on foggy or rainy nights, either. You shot it at a receiver the size of an umbrella, the beam a quarter inch wide. But it was absolutely untrackable. It was so good Citibank used one to shoot data from its famous headquarters on East Fifty-third Street to its back-office operations facility in Queens, built for that purpose in a line-of-site location on the other side of the East River. He watched the men go about their business. They'd spent hours checking and rechecking the transmission vector. The boat, papered with a Liberian registry, had a phone uplink to a private Dutch satellite network used only by shipping companies, and the data packets were in turn relayed and
downlinked to a Greek shipyard that was owned by Elliot. The yard was filled with rusty tankers needing overhaul, but the fiber-optic cables running under and around them were state of the art. With this arrangement, Elliot could speak more or less untraceably to anyone in the world. The many legs of the communication degraded the sound quality and added a little delay, but not too much, perhaps four seconds.
But this was not all that Elliot did, not by any means. After all, anyone with a few million bucks and an antisocial personality could set up an untraceable mix-tech, global com-link. Mr. bin Laden, for example, among other miscreants. Elliot's real value, and the reason he was effectively paid millions of dollars for what amounted to perhaps seven or eight hours of service, was that he made things happen that otherwise could not; he provided capital and the smarts to leverage it to the greatest possible illegal effect. He and his tiny band of infidels had researched several thousand stock price surge patterns and painstakingly built a proprietary trading program that followed the documented natural arc of these surges using best-fit modeling within a field of scattershot data points. He then started to buy the stock in question and drive up the price, of course. But that was not all; once Elliot's trading gambit began, he didn't just slavishly recapitulate the curve with simplistic buying and occasional selling; instead he created it organically, he
birthed
it, which was to say that he used several thousand linked trading platforms that he empowered with randomizing block-size choosers and let run autonomously, giving the platforms a buy bias but also letting them react in real time and differentially to spontaneous market information. This meant that he allowed some of his trading platforms to make "bad" decisions, very much the way real flesh-and-blood traders did, getting in or out of a market surge too early or late. He also employed a mix of the patterns typically utilized by day traders, retail brokerages, private wealth managers, investment banks, and big institutional players such as pension fund managers and mutual fund companies. His platforms traded not just with and against all the legitimate traders in the market but blindly against each
other as well. The result was not a simulation of a real stock surge but a real-life, real-time rise that was, from a statistical point of view, utterly legitimate.
The trick was to induce enough other legitimate traders to buy with sufficient speed and volume that Elliot's platform trades were hidden within the general movement of the stock. He started a little trading fire, hoped it caught, then added gasoline to it. Which was also to say that were the SEC to examine the general trade data, it would be hard-pressed to filter out and reveal Elliot's platforms. It was that sophisticated. Which, again, was also to say he'd probably bought some wee black-market SEC software, when rarely available, and studied it closely.
Elliot had an excellent record. Never exposed or investigated. And he was picky as hell. Had turned Martz down a few times. In general his bias was toward industries or companies that were experiencing a lot of market volatility. Tweaking his model continuously, Elliot stealthily moved around among New York, London, Frankfurt, Paris, Tokyo, Milan, Shanghai, Johannesburg, Melbourne. Each exchange or bourse had its own wrinkles, of course, its own trading rules, national holidays, weather seasons, electoral cycles, and sporting events. Best time to do a British lift? When the World Cup was playing on the same weekend as the Wimbledon finals. Trading volume always light on that summer Friday morning in late June or early July. Best time in Japan? During the Japanese World Series with a typhoon predicted for Tokyo. And so on. The stock had to have a story that made the restoration of its price somewhat plausible. Couldn't be in a dying industry, couldn't be in a takeover battle, for trading patterns around those were heavily scrutinized. Couldn't involve weapons systems, a personal belief of his, and couldn't directly enrich any of a select group of people, including Rupert Murdoch, Donald Rumsfeld, or George Soros. Elliot had a
few
standards. If necessary, he was able to trade one stock simultaneously across multiple exchanges, his trading patterns customized by location. It made for mind-boggling computer research and programming ability. It also meant that Elliot performed only two or three lifts a year and no more. He didn't want to get caught, after all.
Although he was brought in to work for others, Elliot watched the rising stock price with his own goal in mind, which was to get out gradually before the top was reached. In essence, this concept was paradoxical, because every sell order put downward pressure on the price. The trick was to front-run the market's natural conclusion of the short-term, secular rise in the stock's price. Buy less and sell more simultaneously. By the time the stock had topped, Elliot had sold his shares back into the very same heated demand he had created, booked jaw-dropping short-term profits, and initiated a secondary, obfuscatory buy-and-sell pattern of trading, very often one that maintained an artificially high price that was itself 5 or 10 percent below the stock's high. This rear-guard action often resulted in minor short-term losses that shaved at the major gains yet confirmed and publicly ratified the overall movement of the stock. The whole game could take two or even three days to play out, but the essential gambit would transpire in the next five or six hours.
And then I can relax, Martz thought, and go get my prostate biopsied. Once the Good Pharma stock rose near his break-even point, his own trading specialists would reduce his holdings in it, leaving him if not in the black then having suffered a loss of only a few percentage points—good enough, under the circumstances. He was down about $107 million; if he could get back $80 or $85 million of that, he'd consider himself whole and make back the difference another way.
All of this sounded very good in theory. But it still came down to two men, Tom Reilly and Chen. They would need to get started soon, given when the markets opened on the other side of the world. He returned to where Chen was sitting.
Chen rose. "I am going to leave now."
Martz said, "You don't want to do that."
"Why?"
"Because you'll be arrested for illegal stock market transactions before you can leave the United States."
Chen smiled. "I am a Chinese citizen."
"So?"
"My government would not allow it."
"Chen," said Martz, sitting down next to him, "the Chinese government arrests foreigners every day in China, as you know. It's a concept they understand well. We do it, too. There are a lot of people who are very antagonistic toward China's rogue behavior. Mostly conservative politicians. Your arrest would be a matter of personal satisfaction to them. I can arrange for them to praise this event on the floor of the United States Senate. Fast. In a day or two. I'm a very well-connected guy, Chen. I contribute to all their reelection committees."