The Prince of Risk (23 page)

M
ichael Grillo was making progress.

It was four-thirty in the afternoon and Grillo sat at a back table in BLT Steak at 57th and Park. Finishing his coffee, he cast an eye about the room. The lighting was dim, and a few diners were seated here and there. Jeb Washburn’s words about Palantir’s being a software program that accurately forecast future events stuck with him. Predictability was out. He would return to Balthazar when the job was over and done. Until then, he would alter his routine to make it unrecognizable—and unpredictable—to him, to Palantir, and to anyone else who might be watching. Satisfied that none of the remaining patrons was paying him any mind, he returned to his work. He was safe…for the moment.

Every investigation required a premise, a hypothesis around which you marshaled your evidence and built your case. Grillo’s premise was that the person who called himself Palantir had phoned Edward Astor on Friday morning. And further, that Astor had left the Exchange to take possession of some type of evidence—either written or other—from Palantir pertaining to his investigation.

And now the evidence.

Grillo examined the agenda in reverse chronology, beginning the past Friday and going back week by week. He pinned July 8, the Monday after the Independence Day weekend, as the date their investigation had begun. Prior to that date, Edward Astor met with Penelope Evans no more than three times a week. After the eighth, the two met at least seven times a week. Something was up.

Working on his smartphone, Grillo drew up the file he had obtained from his contact at the country’s largest phone carrier, listing all calls Edward Astor had placed and received over the past ninety days. He downloaded the file into an app he had developed himself that used a simple algorithm to analyze which numbers were called most and least frequently. In this instance, he was interested in a number that appeared for the first and perhaps only time on July 5 or 6.

The app kicked out three numbers. Two were for mobile phones in the New York area and the third for a landline in Miami. Grillo was disappointed to learn that none matched the number that had called Edward Astor last Friday morning.

The Miami number was registered to a medical products corporation in Key Biscayne. The call had lasted nine minutes. Grillo checked the firm’s website, confirming that it did in fact exist, then phoned the number. He was surprised when the firm’s CEO answered. Grillo represented himself as an FBI agent and established that the executive had met Astor at a business function and had called to learn the listing requirements for his firm. Grillo struck the number from his list.

The New York numbers belonged to a private individual named Anthony Vanzetti, with an address at 910 Fifth Avenue, and an entity titled Melsen Inc., billing address at 46th Street and Ninth Avenue. Grillo placed 922 Fifth somewhere near 73rd Street, which put it among some of the most expensive real estate in the city. He noted that the call had lasted three minutes. A Google search showed that Vanzetti was a big-shot i-banker who had been appointed on July 1 to the NYSE’s board of directors. While it was possible that Vanzetti might have launched Edward Astor on his investigation, it was more likely that he had called Astor simply to get acquainted. He certainly didn’t fit Jeb Washburn’s description of Palantir as a brilliant scientist who had done work for DARPA.

Grillo graded Vanzetti “doubtful.”

The last number appeared suspect from the outset. He found no mention of Melsen Inc. on the Net. Moreover, the billing address belonged to a UPS store, indicating the use of a rented mailbox. The call had lasted only twenty seconds, so short that it might have been a wrong number. Grillo dialed the number. A woman answered.

“Hi, this is Kristy.”

“Hello, this is John Stewart from the New York Stock Exchange. I’m calling in reference to Edward Astor.”

“Who?”

“Edward Astor. The former chief executive of the Exchange.”

“I think you have the wrong number. I don’t know anyone by that name.”

“I apologize, but our records indicate that someone from your company phoned Mr. Astor on July sixth of this year.”

“That’s impossible,” said the woman. “I only got this phone a week ago. Who is this again?”

“Never mind. The mistake is ours. Goodbye.”

Grillo wrote himself a memo to call his contact at the phone company and obtain more information about Melsen Inc. While carriers recycled numbers as a matter of necessity, it was common practice for them to wait at least six months before reassigning them.

Grillo slid back his chair and loosened his necktie. There were only two diners remaining, and the staff was preparing the tables for the evening rush. The room was too quiet. He needed noise to think. He preferred the constant activity and chatter that infused Balthazar with such brio.

The next order of business was to examine Astor’s credit card bills. Astor had used his Visa card most frequently. Grillo focused on the past Friday. There were charges to Yellow Cab for $10, Starbucks at Broadway and 42nd for $12, Bobby Van’s Steakhouse for $65, and Barnes and Noble on Fifth for $200. A $10 cab ride from the Stock Exchange would have taken him no more than 2 miles in any direction. The $12 at Starbucks was most likely for two people; likewise the meal at Bobby Van’s.

Grillo put together a picture of Astor leaving the Exchange at 9:30 a.m., taking a cab to meet Palantir at a Starbucks in Times Square, then returning to the Exchange to brief Penelope Evans over lunch at Bobby Van’s. It was something, but not enough.

The final charge of the day was for $225 at a restaurant in Oyster Bay. Astor appeared to have laid low all Saturday, making only one credit card purchase: a round-trip air ticket to Washington, D.C., departing the following morning.

Grillo called his contact at the credit card company and requested that he drill down on Astor’s Friday charges and supply the exact times the card had been used. He put down his phone and fished in his pocket for a cigarette. He had a feeling about the phone registered to Melsen Inc. The short duration of the call combined with the use of the UPS dropbox and his inability to find the number’s previous owner appealed to his instinct for larceny. He called his contact at the phone company.

“One more thing,” he said.

“Isn’t it always?”

Grillo read off the number and requested all relevant information about the owner, the mode of payment, the date of first service, and, most important, a list of all calls made to and from the number in the past three months.

“That’s going to cost extra.”

“I already doubled the price. This one’s on the house.”

“No, babe, it isn’t.”

Grillo caught a note of anxiety in the woman’s voice. “Something you want to tell me?”

Her answer was a whisper. “You’re not the only one interested in this number. Some of the big boys were snooping around before you.”

“The Bureau?”

“Bigger. The NSA put a priority warrant on this number a year ago.”

Jeb Washburn had mentioned that Palantir had worked with the National Security Agency. It was standard practice for the agency to monitor calls made by contractors and employees. A priority warrant was something else, reserved for a select list of high-value targets.

“You win,” he said. “Two grand do the trick?”

“Only because I like you.”

“I need it in an hour.”

“Already on the way, babe. And Mike,” she added, “don’t call back.”

Grillo hung up the phone. A minute later the message was in his secure e-mail and he was perusing a long list of phone numbers, names, and addresses.

He drank the rest of his coffee and breathed a sigh of relief.

Now they were getting somewhere.

“W
hat the hell happened to you?”

As always, Marv Shank seemed to intuit the exact moment of Astor’s arrival. He stood by reception and flanked Astor as he walked down the corridor.

“Don’t ask.”

Shank grabbed his arm to stop his progress. “I’m asking.”

Astor wrenched himself free. “I saw the close. What have we got?”

Shank clenched his jaw, his eyes looking this way and that, anger oozing from every sweaty inch of him. “Lawyers in conference room one,” he managed after a painful second. “Brad Zarek’s in conference room two and he’s about to have a coronary.”

“Did he bring his mitt?”

“What mitt?”

“Forget it. What about Reventlow?”

“In your office.”

“And?”

“He’s smiling like the cat who swallowed the canary.”

Astor stopped short of the end of the corridor and stepped into the CFO’s office. “Give me the lowdown.”

Comstock’s chief financial officer was a blond, whippet-thin woman named Mandy Price who had forsaken a husband and family for a career and running marathons. A chart on her wall showed that so far she’d run eight races that year, and it was still July. “Total exposure is six hundred million.”

“Cash on hand?”

“Fifty.”

“So we’re five-fifty short.”

“That’s correct. There’s three billion left in the fund—all long equities—but most positions are negative or treading water. If you sell, you’ll take a hit.”

“How bad?”

“On top of the two billion you lost on the yuan contracts and the five-fifty to meet the margin requirements? Does it matter?”

Astor did the math in his head. He’d be down to two billion and change out of five in the space of one afternoon. A loss of over 50 percent. He smiled. “Thanks for the news. You had me worried for a second.”

Astor left the office and crossed the trading floor. He made a point not to look at anyone. From the corner of his eye, he noted Goodchild and Longfellow flying out of their chairs, already mouthing explanations. He raised a hand in their direction. His expression said the rest.
Don’t even think of getting any closer.
The two Brits wisely retreated to the safety of the trading desk.

Astor slowed before entering his office. After leaving Cherry Hill, he’d stopped first at his physician’s office. The knife had missed all major veins but had taken a chunk out of his bone and possibly damaged the muscle. The doctor wanted him to check into a hospital for surgery then and there. Astor settled for twenty stitches, a shot of Demerol, and a promise to reconsider if the pain became too severe. Afterward he’d passed by his home for a shower and a fresh set of clothes. He did not once consider visiting Janet McVeigh. If Alex felt it was so important, she could tell her herself.

Astor checked that his necktie was knotted satisfactorily. He was sweating and in discomfort, and he’d barely slept in two days. It was not how he would have preferred to go into the most important meeting in his company’s history. Check that. The most important meeting in his career.

He glanced to his right. The conference rooms stood adjacent to his office, and he glimpsed his lawyer from Skadden seated calmly at a table. In the next room, Brad Zarek was pacing back and forth, his cell phone pressed to his ear as if sustaining his life’s breath. Both could wait.

Astor entered his office. “Septimus. Good of you to come.”

“I’m surprised you let me in, let alone called,” said Septimus Reventlow.

Reventlow’s grip was dry and too loose, his perpetual smile saying that he was anything but bothered both to have been so rudely dismissed the day before and to have been called back on such short notice.

“So, Bobby, interesting times.” Reventlow’s habit was to speak softly to draw the other man into his sphere, force him to listen closely.

“Keeps the heart beating nicely.”

Reventlow laughed.

“Let’s sit,” said Astor.

“Your arm. Do tell.”

“Accident at home. Nothing serious. Anyway, thanks for coming on such short notice. I wanted to revisit your investment in our Comstock Astor fund.”

“You declined.”

“I’d like you to reconsider.”

“Yesterday you wouldn’t touch my money with a ten-foot pole.”

“The situation has changed since then.”

“The piece in the
Times
suggests your position in the yuan is dangerously overexposed.”

“Time will tell if we’re overexposed. It’s not a question of if the Chinese will devalue, but when.”

“Unfortunately, it’s the when that concerns me now. I already have a hundred million in the fund. If you’re underwater, I’d like to know it before committing anything further.”

“We are facing a margin call, but that’s nothing new. We have the means to meet our requirement, but rather than liquidate any of the fund’s other positions, we want to seek an injection of capital that will allow us,
and you,
to profit when the yuan changes course.”

“If it changes course.”

“
When
it changes course.”

“How much additional capital were you seeking?”

“You were proposing three hundred million. On top of that, I’ll guarantee your participation in all of our future funds.”

“I have another idea.”

Astor kept a tight smile on his face. “I’m listening.”

“Three hundred million for a twenty percent ownership stake in your firm. You can use the money as you see fit. Meet the margin call or even start another fund.”

“The firm isn’t for sale.”

“Let’s not be hasty.”

“I’m not. The first rule I made when I started Comstock was to run it alone. No partners. Ever.”

“I’m prepared to go higher. Five hundred.”

“You flatter me. But as I said, the firm isn’t for sale. I’m looking for additional investors, that’s all.”

A shadow crossed Reventlow’s face. The perpetual smile hardened to a frown. He stood and took a step toward the door. “To be honest, Bobby, word on the street is that without a lifeline, you’re going under. I don’t think you’re in any position to turn me down. In fact, I think your lawyers might say that you have a fiduciary responsibility to your investors to take the money. To do otherwise would be criminal.”

“Is that a threat?”

The shadow left Reventlow’s face. He laughed. The perpetual smile returned, and once more he was the picture of the urbane, cosmopolitan gentleman. “You are a funny guy,” he said. “I’ll think about the investment. I need to ask around. We wouldn’t want to put three hundred million dollars into your fund only to lose it all a few days later.”

“Call me whenever you’re ready.”

“I believe you need an answer by three p.m. tomorrow. After that, a wire wouldn’t hit your account before the market closes at four-thirty. Comstock would be in default. Technically, you’d be bankrupt.” Reventlow seemed to find the idea amusing, though it would cost him all or part of the $100 million already invested. “I’ll see myself out.”

Astor walked with him to the door and wished him goodbye. Shank was in conference room one with the firm’s attorney, Frank Arcano. Astor joined them but did not sit at the table.

“And so?” asked Shank.

“He wants to buy a piece of the firm.”

“What did you tell him?”

“The firm isn’t for sale. Not now or ever.”

“So we’re screwed.”

“He’s considering his investment.”

“What kind of idiot would put his money into the fund now?” asked Shank.

“I would,” said Astor.

Shank sank in his chair. “I work for a crazy man.”