A few seconds later I refuted my own argument. SKC paid retainers to every law firm in New York City, a strategy designed to thwart angry advisers. No lawyer could take my case. The good ones were boxed out by conflict-of-interest protocol.
As I brushed my teeth I considered Kelemen and then Romanov. I asked myself, over and over, sometimes aloud and sometimes in silence, “Why did Charlie care?”
The link between the two won’t save my job.
That was when a wicked, wonderful burst of clarity hit me from nowhere. The idea offered hope. It was too late to call Halek. I called anyway. His answering machine picked up. “Do your thing at the beep.”
“Shit,” I said, and hung up.
Charlie cared, all right. Not just a little. I bet MRI Capital consumed his every waking moment. Now it was consuming mine.
CHAPTER FIFTY-ONE
“Hey, it’s me.”
“Nice message on my answering machine last night.”
“Yeah, sorry.”
“Let’s see,” Cliff Halek said into the receiver, “you’ve fled the country, and now you’re calling from a safe house in Rio.”
There was no humor in his voice, no levity whatsoever. I knew better. “Cute. I need your help.”
“No shit,” he declared.
“Cliff—” I started.
He cut me off with words blasting from his lips the way pinballs ricochet off electric bumpers. “Zola called. We’re meeting later this morning.” Tilt. “We’re setting up procedures for your equity portfolios. No changes without my approval.” Tilt. “Why didn’t you return my calls yesterday? What’s happening now?” Tilt. “Zola didn’t know much, and Kurtz didn’t say jack.”
“Thanks for running the portfolios,” I said, knowing my clients would be safe. “You spoke with Kurtz?”
“For thirty seconds,” Cliff answered. “He thinks you stole a bunch of money. He’s scared of column-six risk.”
Cliff was referring to the front page of
The Wall Street Journal
, where for
years the sixth column had featured stories about Enron, Tyco, and World-Com. It served as the epicenter for articles about bad business behavior.
“Kurtz is an ass,” I countered, “and he’s wrong about me.”
“The lawyers got to him,” Cliff continued. “Right now, he won’t take a leak without their green light.”
“Will you check something for me?” I asked brusquely.
“Will it make me an accessory?” he shot back, half joking. I noted the concern in Halek’s voice, not for himself, but for my career.
There’s the problem
, I reflected in silence.
It’s the taint of Charlie Kelemen. SKC will wash its hands of me, of anything to do with a Ponzi scheme.
“Are you in front of a Bloomberg, Cliff?”
“Of course.”
“Pull up Rugged Computers. The ticker is R-C-O-M.”
“Okay. R-C-O-M, equity, go,” he announced like a sportscaster delivering play-by-play commentary for Bloomberg keystrokes. “Now what?”
“Go to the ‘Ticket Writing and Holders’ section and tell me who bought or sold the stock recently.”
“Okay,” he said. I waited. I waited. I waited. “It says, ‘No insider transactions available for these settings.’ ”
“Shit,” I cursed absently. “I thought Bloomberg reported insider trades for all companies.”
“Not the small ones,” Cliff explained. “Why are we doing this anyway?”
“I hoped Alex Romanov’s name would pop up.”
“No way,” Cliff objected instantly. Everybody on Wall Street had read the financial press. “It’s not Romanov’s style. He wouldn’t buy enough stock to become an insider.”
“He owns twenty-two percent of the company.” For a moment the phone went silent. “Are you there, Cliff?”
“Yeah, hang on. I’m checking something.”
I wondered how people in our industry had communicated before computers existed. It was always, “Hang on,” while somebody performed a calculation or surfed the Web for an answer.
“Bloomberg doesn’t show the trades,” Cliff continued thoughtfully, “but it shows the major holders. Romanov’s name isn’t listed anywhere.”
“You’re kidding. How about MRI Capital?”
Again, silence. “No, nothing,” Cliff reported finally. “Where did you get twenty-two percent?”
“I have a printout that shows MRI owns nine-point-five million shares.”
“Then I’d say your boy is fucked. He didn’t file a 13(d) with the SEC.”
Section 13(d) of the Securities Exchange Act of 1934 gave owners ten days to notify the SEC when they established 5 percent positions in public companies. The law also required them to disclose their holdings to both the issuers and the exchanges where shares traded. The penalties for noncompliance were stiff: criminal sanctions, disgorgement of profits, or both. Clearly, a 13(d) violation spelled trouble for Romanov, especially given his intent to manipulate prices. The violation would expose him as yet another rogue from the capital markets. It would put MRI out of business.
The cheaper the hood, the fatter the mouth.
“I didn’t even think about 13(d).”
“Romanov doesn’t strike me as the kind of guy to fuck around with the SEC,” Cliff observed skeptically.
“I know. That’s what bothers me. But my printout says he owns nine-point-five million shares.”
“Why wouldn’t he file?” Cliff challenged. “It doesn’t make sense.”
“It does if you’re cheating. I can’t prove it, but I think Romanov’s marking the close. Filing would expose him.”
Cliff whistled first and then objected. “No way, Grove. I don’t buy it.”
“During the last three days of December, two hundred and six thousand, nine hundred and thirty-six shares of Rugged Computers traded. And the stock appreciated thirty-one-point-six percent. Typically, three days of trading total twenty-two thousand, five hundred shares.”
“You’re kidding.”
“Unfortunately, there’s no way to prove MRI bought any of those two hundred and six thousand, nine hundred and thirty-six shares.”
“That’s a problem,” Cliff agreed. I heard conflict in his voice. He wanted to believe. He also wanted to identify a crack in my reasoning, anything to end the nonsense. Alex Romanov was the next Warren Buffett, not some thug marking the close. There had to be a better explanation.
“Any suggestions?” I asked.
“Let me think about it,” Cliff replied. I realized he had no clue how to
trace the trades to Romanov. Before I could respond, Cliff asked, “What’s this printout you keep referencing?”
“I found it in a file that Charlie kept on MRI. It’s either a spreadsheet or something Romanov printed off the Web. Maybe a printout from a prime broker where he custodies his securities.”
“How would Charlie get that printout?”
“No clue.”
“What makes you think it’s legit?”
“Romanov wants it bad.”
“You told him about it?”
“I told him Charlie kept a file on MRI. Romanov keeps asking me to send it over to his office.”
“Why?”
“That’s what I say. I didn’t think twice about his requests until you mentioned 13(d). Now I understand. Charlie’s file is the only link between Romanov and nine-point-five million shares of Rugged Computers.”
“I’m not sure about that,” Cliff argued. “Word gets out. You can’t hide nine-point-five million shares of a thinly traded stock.”
“Yes, you can. Romanov trades with every broker on the Street. A buy here, a buy there. No shop has the complete picture. I bet he uses different firms to hold his shares.”
There was a long pause. Cliff finally broke the silence. “Grove, we’ve been friends for how long?” he asked carefully.
“About eight years.”
“Right. And in all that time, I’ve always been straight with you.”
“What’s on your mind?” Cliff still had reservations.
“You may be right about Romanov. But I don’t care. Forget about MRI and take care of yourself. You need a lawyer. And frankly, I don’t see what any of this has to do with the forged letter.”
“I can explain. But I need your help to prove it.”
Cliff asked his assistant to reschedule a conference call. Then he focused on our conversation. “Let’s start at the beginning, Grove. What do you have?”
______
Thirty minutes later Cliff understood everything. At first he balked at my request. Then I said, “It’s the only way for me to save my job and come out clean. No guilt from association.”
“I’m in,” he promised, friendship overriding reluctance. But the hesitation lingered in his voice.
“Don’t flake out on me.” My words were half warning, half plea.
“I still think you should talk to the firm first.”
“No way, Cliff. Lawyers fuck advisers. I didn’t trust the business prevention unit before, and I sure as hell don’t trust them now. Besides, Romanov won’t know what hit him.”
“Things are starting to heat up around here,” he said. “Gotta go.” Dial tone.
I dreaded my call to Betty Masters, crossed my fingers and hoped for the answering machine. But she picked up on the first ring. “Hi there,” Betty chirped in a voice full of caffeine and good humor. I could almost see her dazzling white smile through the receiver.
“Do you have a few minutes?”
“Is everything okay, Grove? You sound stressed.”
“It’s nine A.M. and I already know how a salmon feels at the end of the day.”
Tension replaced her good cheer. “Does it have anything to do with Fred’s money?” she asked anxiously.
“Yes, I’m sorry to say.”
“Don’t sugarcoat it,” she ordered. “How much are we down?”
“The market’s not the problem, Betty. The Kelemen Group was a sham. Charlie was running a Ponzi scheme. He cheated you. He cheated all his investors.”
“Not Charlie,” she gasped.
“Fred’s money is gone.”
For a long insufferable moment, a pregnant pause from purgatory, we both remained quiet. Betty finally asked, “Can Sam pay me back?”
“I doubt it. She has no idea where Charlie kept their money. He conned Sam. He conned her parents, too. They invested big bucks in the Kelemen Group.”
“But Sam and Charlie acted so rich. The parties, the dinners, the jewels,” Betty countered.
“All purchased with investor money. She has no cash. Right after the funeral I lent Sam money just to keep her afloat.”
For a moment Betty weighed her words. “Sam’s dirty, Grove,” she hissed. “All my money,” she cried. “Fred’s money.” And that was when she blew. “They paid my decorating fees with Fred’s money. Fred’s money.”
“What do you mean she’s dirty?” I asked, knowing the answer. Hunting season had opened on Sam Kelemen.
“She knew, Grove. Charlie could never hide anything from Sam. She probably helped.”
“If Sam knew,” I argued, “she deserves an Oscar.”
“Don’t be naive, Grove. I’m an expert on dysfunctional marriages. Husbands and wives try to hide things. But stuff always turns up in the wash.”
“Not this time,” I disagreed. My reservations were mounting deep inside.
“I don’t buy it,” Betty yelled, her anger a jolt of decibels. I jerked the phone away from my head, protecting my ears from further blasts. For a moment Betty softened and said in an apologetic tone, “Grove, I’m just thinking about Fred.”
“I understand.”
“Do you think I’ll get my money back?”
“I don’t know.”
“What should I do?” Betty asked.
There was no alternative. I advised her to do the unthinkable: “Get a lawyer.”
“Tell me something I don’t know,” she returned. “Sam Kelemen is dirty.”
The words made me cringe. It felt like I had betrayed Sam. “There may be someone else involved.” It was my last desperate attempt to save Sam from Betty’s growing wrath.
“Who?” Betty asked.
“I can’t say yet. I should learn more during the week.”
“Grove, just help me get back Fred’s money.”
We said good-bye. Neither of us had the stomach or inclination to continue. Betty was assessing her loss. I needed to call Romanov and insist on giving him the red folder in person. He might not like it. But he would meet, all right. There was no doubt.
______
That one comment bothered me:
Sam’s dirty, Grove.
Betty had to be wrong. Sam had not helped Charlie with the Ponzi scheme. She had no idea where he banked. But I still could not erase Betty’s words from my mind.
Sam’s dirty, Grove.
Rifling through the red folder, I hoped to find a clue, an answer, something to help Sam, anything to prove Betty wrong. Sam had treated me like a leper during our last phone call. So what. It would take more than one bad exchange to undermine my loyalty. Sam had been such an important friend to Evelyn.
Nothing.
I found nothing except for my note on the back cover of the red file. That day at Charlie’s office, I had noticed the name Pinckney in his Outlook calendar. There were Pinckneys all over Charleston. According to my note, Charlie had a doctor’s appointment tomorrow.
My next decision surprises me even now. Why I did it I will never know. Had I been more thoughtful, I never would have called Nurse Pinckney. A call was way too intrusive. Deceased or not, Charlie’s medical affairs were his business. Not mine. At the time, however, a call made all the sense in the world. In Charlie’s vernacular, I was a “pleaser.” Canceling his doctor’s appointment seemed the courteous thing to do.
