Bull Street (26 page)

Richard looked at Steinberg, then Jack. These guys were like stone; he couldn’t read them. He was starting to wonder:
Can I trust them?

Kathy and Richard took three successive cabs, looking out the back window all the way, before having one drop them at the Carlyle. Richard was beginning to worry about Kathy. She still hadn’t gotten the glassy look out of her eyes.

In the limo on the way downtown, Jack said to Mickey, “You thinking what I’m thinking?”

“Probably not.”

“I’m thinking we might be able to contain this thing if we get immunity for the firm.”

“Dream on. And even if we did, that’s not a total shield,” Mickey said. “The firm might be okay, but
we’d
get microwaved.”

“Yeah, but it’s a start. And we’re totally fried if we don’t get it.”

Mickey just looked out the window.

Jack was thinking,
Stay inside yourself, hold it together.
He said, “First off, we gotta kibosh this internal task force.”

Mickey looked at Jack like he was his dumb little brother. “No. We set it up so it does its job and comes up with nothing.”

“Ken Stern is no dummy.”

“I know. Dealing with that falls into your department.”

Jack thought about it for a moment. He nodded, then said, “If we keep our poise, we just might pull this off.”

Mickey said, “Like managing to step on all the stones walking across a stream. Like we always do.” Mickey said it looking out the window past Jack, that dreamy look he got in his eyes when he was thinking, eyes blinking.

Richard and Kathy ate a room-service dinner in Richard’s room at the Carlyle Hotel. They didn’t talk much. “So who do you think our mole is?” Richard asked afterward.

“Not me,” Kathy said.

Richard said, “I guess that eliminates at least two Walker employees.” She was sitting cross-legged on the bed, looking sleek and sexy. Richard was looking forward to getting his hands on her later. She must have guessed: she smirked at him. Richard went on, “Should we start eliminating others one by one or try to guess who he is?”

“Not Mickey or Jack,” Kathy said.

“You’re hallucinating,” Richard said. “I don’t see how we can rule out them yet.”

“Are you serious?” Kathy asked.

“Jack and Mickey are the firm’s biggest management shareholders.”

“That’s kinda cynical, babe,” Kathy said. “As the firm’s two most senior guys, they’d be concerned whether or not their pocketbooks were involved.”

“Don’t be a dope. This is Wall Street. And you already said you think they’re sleazebags.”

“Yes, but running an insider trading ring when you’re worth hundreds of millions?”

“A bunch of back-office clerks didn’t set this up.”

It stopped her. She thought a moment. “Do Toto’s email transcripts tell you anything new?” she asked.

“It’s just a bunch of trades. I got more out of the Excel spreadsheet I set up; at least you can sort that multiple ways.”

Kathy jumped up, pulled Richard’s memory stick with the Excel file on it out of her purse. She went over to the desk, plugged it into her laptop, and loaded the Excel file.

“What are you doing?” Richard said.

“Trying to figure out if there’s any sequence to the trades. I’m copying the data and breaking the original file into two. I’ll sort one by name of the institutions that GCG Paris passed trades out to. The other chronologically, listing side by side all the trades in each of the deals to see if there’s any common sequence.”

Richard took out his laptop and turned it on.

“Did we have all the confirmations coming back from the other institutions around the world to GCG Paris in the batch you FedExed me from Paris?” he asked. He had an idea.

Kathy said, “I think. But what will they show?”

Richard said, “I’m gonna check to see if we have confirmations coming back from any institutions that we don’t have any outbound emails to. That should tell us whether GCG Paris is fanning them all out, or whether there’s some other intermediate staging point.”

After about an hour they had three completed lists. They kept looking back and forth between them.

Kathy said, “Two of the Swiss banks, Credit Genéve and Stahl Fils & Cie, never showed up in outbound emails from GCG Paris. The same thing’s true of Peniche Industrial, a Chilean brokerage firm, and Siu Yan and Sai Ltd., the Hong Kong bank that seems to be executing trades from the Far East.”

“So there must be another link someplace,” Richard said. “The emails ordering and confirming trades are about a million shares off on each deal.”

“It’s just noise,” Kathy said.

“Each deal? That’s significant,” Richard said.

Kathy said, “So let’s assume your theory is right, that Walker New York is the start of the circle, the origination point and the final confirmation point, with GCG Paris as the primary relay point. So where’s the secondary staging point?”

Richard said, “We’ll need to juggle the trades again to see if we can find a mismatch on the outbound and inbound to each address. If we have a much higher amount of outbound to some place than inbound, it means it could be the staging point.” He sorted the data again. “It’s London,” Richard said.

Kathy said, “Another thing: these four institutions I mentioned earlier,” pointing to the screen, “two in Switzerland, one in Chile and one in Hong Kong sent some of their confirmations of trades directly back to New York.”

“So?”

“It has to be London,” Kathy said. “The total number of shares confirmed directly to New York from those four sources almost exactly matches the imbalance in confirmations from London itself versus the outbound orders sent to London.”

“I knew there was a reason I’m crazy about you.”

Kathy said, “So we have New York as the center of the ring, Paris as the main staging point and London as the secondary staging point. And we have banks in Switzerland, Chile and Hong Kong that seem to be getting accessed only through London.”

“You think that whoever’s staging things out from Paris doesn’t know about these four institutions being staged through London?” Richard asked.

“There’s so much data it would be almost impossible to keep track of it, unless they sorted it like we’ve done and figured the totals don’t match,” Kathy said. “Maybe it’s just to conceal the orders better.”

“Yeah, maybe, but I still think something’s fishy.”

Kathy laughed. “The whole thing’s fishy. And another thing strikes me. London, Paris, New York. You don’t need to be a genius to guess we’ve got crooks at Schoenfeld, GCG and Walker. A whole kettle of rotten fish.”

Richard knew it, too, but hearing it said aloud made it stink even more: no place was safe, everybody suspect.

Kathy stopped laughing. She said, “My God, I can’t believe you went to Jack and Mickey with this.”

“I went to LeClaire. He brought me to Jack and Mickey.”

“So? How can we trust anybody?”

“We’re switching hotels,” he said. “I don’t want anybody to know where we are. Not Jack, not Mickey, not anybody.”

N
EW
Y
ORK
C
ITY
.
I
T WAS
9:30 p.m. and the guy, Stern, still hadn’t come out to the South Street pier parking lot for his car. Preston waited underneath the FDR Drive onramp across South Street, behind the 55 Water Street building where Stern worked. Preston was used to waiting. He had all night. And if tonight wasn’t the night—just like the last two nights, when too many people were around—maybe it would be tomorrow night.

There he was. Preston hit his beeper, then watched as Stern crossed South Street. He saw the others get out of the van and follow him. Preston wore a suit and tie, so as not to put the guy off. He picked up his briefcase and walked out of the shadows as Stern approached.

“Hey, buddy, got a light?” Preston said, smiling and holding up a cigarette. He stepped into Stern’s path.

“No, sorry, I don’t smoke.”

Preston dropped his briefcase. “Damn,” he said and bent over as if to pick it up. When he saw the others were only a few steps behind Stern, Preston jumped up and shoved him in the chest, knocked him over backward into the others’ arms.

“Hey!” was all the guy had time to say before one of the others clamped a hand over his mouth.

Preston hit his beeper again, then heard the truck’s engine revving, then coming down South Street, shifting gears, faster.
Preston stepped back into the shadows beneath the onramp. He watched as the others dragged Stern to the street and threw him in front of the truck, only doing maybe fifty, but fast enough. The other guys scattered and Preston got the hell out of there.

Jack sat in front of Mickey’s desk, waiting for him to get off the phone. Jack could hardly believe how bad things had gotten, and how fast. “Challenging times,” was all Mickey said about it before he took his call.

More like shoveling into a gale force wind. In the last few months, Washington Mutual goes bust and the Fed brokers a sale to J.P. Morgan. Wachovia goes bust and the Fed brokers a sale to Wells Fargo. Bear Stearns goes bust and the Fed brokers a sale to J.P. Morgan. Fannie Mae and Freddie Mac go bust and the Feds take them over. Lehman just goes bust. Next, the Fed sticks over 100 billion into AIG to keep it from going bust. Then, Merrill Lynch, afraid of going bust, sells itself to BofA and the Dow is now 40% off its peak.

The way the last months had gone, Jack wasn’t sure he wanted to see how the next few days would go. Then, after all that, Milner finally gets off his ass to get Tentron done, and it looks like that will keep Walker afloat. But now this mole trading thing hits the fan.
Jeez.
Talk about bad timing. Mickey and him would have to do some fancy ham-and-egging to claw their way out of this one. Problem was, you had to have something to start with. Right now, if only they had some ham they could have some ham and eggs if only they had some eggs.

When Mickey got off the phone, Jack said, “The police are calling Ken Stern’s death suspicious. They’re doing forensics.”

Mickey looked at Jack like he was retarded. “Did you expect anything else?”

Jack shifted in his chair, said, “Toto made any progress on immunity?”

Mickey shook his head. “Holden isn’t budging. In fact, now he’s saying he’s going to charge Blum—when he finds him.”

Jack said, “I’ve thought about how we firewall this thing.”

Mickey looked up. “It’s like any deal. We need some negotiating leverage with the Feds. And a sweetener. Then we trade for our immunity.”

“Right. What if they had the mole, or thought they did?”

“The only way that works is if we hand them their case in a way that they’ve got everybody involved, neatly packaged. Or at least looks like it. Enough to get their headlines.”

“So we make it look like the mole is the only one at Walker.”

“Charlie Holden will never buy that,” Mickey said, staring at Jack, eyes blinking.

“Alright, so the mole and a few more who helped him out, and it stops there. They think they’ve got the mole now—Blum.”

“You’re not serious.”

Jack said, “Let’s just say they’ve got so much on Blum he can’t talk his way out of it, and so he has to cut a deal, or we make it worth his while to cut one.”

Mickey gave Jack one of his impatient looks, glanced over at one of his screens, then back at Jack. “Blum’s clean. And he’s a straight arrow. Do you want to be the one to offer him money to pretend he’s dirty so he can save all our asses? Even if Blum agreed, he doesn’t know enough to make it work. And even if the Feds stretch what they’ve got on Blum, it won’t stick once he’s got a good defense lawyer.”

“So what’re you thinking?”

“That we need to serve up the Feds a little something they wouldn’t be able to get any other way.”

Jack didn’t say anything, just watched Mickey.

“Something that will make it stick,” Mickey said.

That Mickey, always figuring things out. Jack sat back while Mickey started explaining.

Richard was sitting in their hotel room at the Waldorf Astoria, switching the TV from Bloomberg to CNN to CNBC. Kathy had gone for a newspaper. The Dow was now down 5% for the day, the financial stocks had fallen off a cliff, and the newswires were talking about another federal bailout for Citigroup. The credit markets had ground to a halt and 20% layoffs were happening all over the Street. Two years of B-school, made it to the Street by a hair, work my ass off, finally making it and this happens.
What a mess.
And even worse, this mole thing had him hiding out from the Feds and now even his own firm. His cell phone rang, gave him a start. He looked at the number on the caller ID: Jack.
The mole? Or just Jack.

“Hi, Jack.”

“Hey,” Jack said, sounding like nothing had happened. “You okay?”

“Yeah. Bored.” Richard now feeling uncomfortable.

“Then I’m about to make your day. Jim Baldwin called Mickey at home last night and asked for a meeting. Sounds like maybe Nick Williams is ready to do a deal with Milner on Tentron. You interested in coming?”

“Of course. You heard anything from Toto?” Richard listening for any inflection in Jack’s voice.

“Yeah, but it’s not resolved. Holden won’t agree to a deal without the SEC being involved. He also says we aren’t offering them anything they don’t already have. Might take a few days. You may need those Groucho Marx glasses after all.”

“I’ll figure something out.”

“Be at Milner’s at noon for a strategy session. Williams and his advisers show up at one. See you there, tiger.”

Richard sensed a flutter in his stomach, a tingle in his fingers. He had some things he wanted to discuss with Milner, alone, and this meeting gave him a perfect reason to be there.

But Jack was acting too casual. Walker’s General Counsel gets killed by a truck after Toto insists he set up an internal task force to investigate the mole thing. And Jack never mentions it. This was getting scarier by the minute.

“Who was that?” Kathy asked from the doorway.

“Jack.”

Kathy clenched her jaw. “Does he know we’re here?”

“No. At least I don’t see how he could. He called about a meeting at Milner’s office on Tentron.”

“You’re not going are you?”

“Yeah. I think Milner may be a way out of this mess.”

Kathy took a few steps toward him, her eyes narrowed, said, “You can’t be serious. It could be a trap.”

“I can’t just sit around. And I need to get to Milner at some point anyhow. What can happen to me with lots of people around for a big meeting?”

Milner sat in his office, looking up Park Avenue. He checked his LCD screen. Tentron was trading at $41.50. He glanced down at
his watch: 11:15 a.m. Sandy had asked for a meeting. Stephanie buzzed the intercom. “Mr. Sharts is on the way up.”

“I take it you heard about Ken Stern?” Milner asked before Sandy even sat down.

Sandy didn’t answer, just gave him a grave look and a nod.

“That’s part of what I wanted to talk to you about. This is out of control. You should go to the police, and the Feds.”

“And that’s the good news, I assume.”

“You decide. The other reason I came over is that my partner in Washington got wind that Charlie Green, the SEC Chairman, was briefed on a major pending insider trading case.”

Milner nodded, then sat very still.

Sandy went on, “Once the Chairman gets briefed it’s hard to keep a lid on it. They usually make a move shortly after that.”

“Shortly could mean weeks, couldn’t it?”

Sandy just stared back at him.

“And so you think they’re ready to…” Milner’s voice trailed off. He couldn’t think of the right word. Pounce? Spring? They sounded so dramatic.

“I don’t know for sure,” Sandy said. “But I can’t understand why you’re still screwing around with some deal. Start talking or start running.”

Milner leaned back in his chair. “Anything else?”

Sandy shook his head.

“Okay, message received. Thanks. I have a meeting coming up. I’ll call you later.” He watched Sandy turn and leave. Sandy had a point: why
was
he still screwing around with this deal? Then he felt his throat constrict. He had some uncomfortable, if not inevitable decisions to make.

At Gale’s Uniforms on 86
^th
and Lex, Richard bought a dark gray pair of coveralls big enough to fit over his suit. He also bought a gray baseball cap with “Otis” in big letters on the front, and a soft duffel bag large enough to hold his briefcase. He stood in uniform outside Grand Central where he could see the lobby of the Helmsley Building across 45
^th
Street. At 11:55 Richard saw Jack, Steinberg and LeClaire walk into the lobby. At 12:45 he saw Nick Williams and his advisors arrive for the 1:00 p.m. meeting. He walked into the building at 1:45.

By the time he changed out of the coveralls in Milner’s men’s room, the meeting was already breaking up in Milner’s mezzanine floor conference room. Everyone was shaking hands, smiling, slapping backs. They obviously had a deal.

Now Richard’s heart was pounding, not from nervousness. This was gonna be it: the hell with a $6 billion deal, one he helped hatch and was a player in. He was here to save his ass.

After everyone came downstairs to the main floor and most of them left, LeClaire, Jack and Mickey stood around near the elevators, chatting. Then LeClaire waved good-bye to Richard and got into the elevator. Jack walked over to Richard. Jack was wearing a we-just-did-a-deal smirk. Richard’s guard was up.