Perry looked at the three of us, his eyes asking for direction. I gestured to Frank with a sweep of my arm. “Sign here, Boss,” the messenger instructed Frank while handing him a pen, the delivery manifest, and finally a sealed envelope.
Perfect.
Frank signed. Patty sighed. Perry left.
“Maybe we should call Percy,” I baited Frank, who was staring at the return address.
It said “Office of the Chairman.”
Patty smelled a setup. “O’Rourke called JJ, Frank. Don’t you get it?”
That was when Gershon first grasped the war for Jumping JJ was over. I had been covering JJ for six years. We opened accounts together and enjoyed a good working relationship. Patty had not delivered the $20 million banking assignment, which would have been the only way for her to wrest
control of my client. Outnumbered, outgunned, out of gas, she did what any top producer would have done to save face. She attacked, ranting and raving, bitching and whining, accusing and blaming, clinging desperately to the belief that decibels produce results when all else fails.
“It’s unprofessional,” Patty screamed. “He went to the client, Frank. He’s airing our dirty laundry.”
Frank ripped open the envelope, where he found a letter folded in thirds. He opened it, glanced at the contents, and announced what we all knew: “Josef Jaworski.”
“Read it, Frank.”
“No,” Patty countered. “I don’t want to hear it.”
“ ‘Dear Mr. Kurtz.’ ”
“Why didn’t he write me?” Patty complained. Frank’s menacing look silenced her.
When did Kurtz grow a backbone?
He started over. “ ‘Dear Mr. Kurtz, I am writing to commend PCS and the outstanding character of your investment representatives.’ ”
Patty twirled a lock of hair impatiently.
“ ‘In particular, I would note—’ ”
“Stop right there,” Patty interrupted. “O’Rourke set JJ up. I can’t stomach the self-flattery.”
Where’s that industrial-strength muzzle when we need it?
Frank stared daggers into Patty, a heartbeat away from telling her, “Shut up.” Patty pouted in silence but twirled her hair manically. “ ‘I would note,’ ” Frank repeated, “ ‘that Patty Gershon is an outstanding reflection on your organization. We met at a function recently, and her breadth of market knowledge impressed me enormously.’ ”
“Hah,” Patty screamed in premature triumph. “I told you he wants joint coverage.” She crossed her legs and smirked in my direction. She pumped her arm victoriously.
“There’s more,” Frank cautioned.
“ ‘I understand that issues of coverage arise in brokerage firms,’ ” he continued. “ ‘Although Patty impressed me enormously, I am well served by Grove O’Rourke and his team. I do not wish to make any changes at this time. Accordingly, my assistant knows to screen out her calls. Yours sincerely, JJ.’ ”
Who would have guessed this hard-charging CEO, a man who had once
tap-danced on a conference room table to wake up a money manager, could be so tactful? His letter sounded like the work of a young diplomat from inside the State Department.
Patty blanched, struggling to save face, considering how to respond. Frank said, “There’s a P.S.”
“There’s more?” I asked.
“It says: ‘Please have Ms. Gershon contact my new colleague, Mr. Baker.’ That sounds like a problem,” Frank observed.
“Let me see that,” Patty said, reaching for the letter, reading furiously. Even her Ferrari-red lips seemed to drain of color.
“It sounds more like a stay the fuck away from my client.”
“Knock it off,” Frank intervened. “It’s clear what the client wants. JJ belongs to Grove.” I could almost hear his gavel striking the bench.
“It’s not over,” Patty threatened, and stormed out of Frank’s office. She clipped the doorjamb as she exited, and Frank’s photos shuddered on the walls.
We watched Patty leave in all her goldfish fury, an angry swish of the tail. When she was out of earshot, Frank extended his hand and said, “Welcome back, Grove. Now let’s get to work.”
“Well, there’s one other thing, Frank.”
“Name it.”
“It’s amazing what people remember,” I started. “The moments that define lives. I wonder how people will remember me. The broker that exposed Alex Romanov? Or the broker tangled up in that new and improved Ponzi fraud?”
“It’s over, Grove.” Frank tried to sound reassuring.
“I’m not sure about that. Bill Buckner had a career worthy of the Hall of Fame, but everybody remembers how the ball went through his legs in game six of the 1986 World Series.”
“Your point?” Frank asked.
I handed him a sealed 9.5-by-12-inch mailer.
“What’s this for?” he asked.
“Just make sure you get it on the right wall.” I left Frank sitting among the pope, Andrew Fastow, Bernie Ebbers, and Dennis Kozlowski.
______
It was Friday, and the weekend exodus began. As strategists headed for their choppers to the Hamptons, as traders abandoned their LCD displays, as I-bankers booked their car services, as secretaries padded about in their lace-up sneakers, as brokers banged messages into their BlackBerrys, as Casper clipped, as Scully boomed, as newbies charged purposefully to the designated bar, as PCS colleagues welcomed me back, as Estrogen Alley sulked, as Chloe talked into her headset, as Annie gathered stories, and as Patty Gershon fumed in angry silence—they all spied the most curious thing upon exiting the building. My three union brothers from outside the Star of Bombay.
The trio brought their inflatable friend, an eighteen-foot union rat. Planted outside the building’s entry door, the rat stretched its creepy talons over all those who walked underneath. The hateful red eyes looked phlegmy, the fangs a touch bloody. The pointed snout, all whiskers and monster teeth, would give anyone the creeps. The rat was by no means a loveable product from Disney animation.
No one chanted, “Bombay is not okay.” This time, the noisy strikers had packaged a special ditty for Patty. Somehow, their commotion slowed the weekend breakaway. A small crowd gathered to hear the singsong slogan:
“
Gershon, Gershon, rich and rude,
We don’t like your attitude.
”
CHAPTER FIFTY-EIGHT
Three weeks have passed since the big sit-down in Frank’s office. This morning, Lila Priouleau called with disturbing answers to the questions troubling me ever since my last tête-à-tête with Fitzsimmons and Mummert.
Our lawyers had instructed me to avoid contact with anyone from the Kelemen Group fiasco. That included the Priouleaus, great prospects notwithstanding. For a brief period it seemed the family might sue SKC. Lila had played rough in those days leading up to the Red Flame. She harped over and over, “It’s just business.”
Lila never threatened SKC, though. And her family backed off when I proved Charlie’s letter was a fake. Baby Face didn’t care. He said, “Stay away from her.”
Not in my lifetime.
Lila was part of my past, a link to memories of Evelyn. I could never shun Lila. Our friendship had been good. I didn’t care what the lawyers ordered. And truth be told, the curiosity was killing me. She and I had not spoken since our night at the gym.
What was that $60,000?
I wondered, remembering how Fitzsimmons had asked about Charlie’s wire transfer to her bank account.
Lila’s first words on the phone were not “Hi,” or “How are you,” or “I’m
sorry.” She was unequivocal. There was no hesitation in her voice. She reported anxiously, “I am so fucked.” She seldom swore like that.
“What’s wrong? You sound awful.”
“The police are investigating me.”
No surprise there.
“The district attorney may press charges.”
“Whoa, Nellie,” I spit back in shock without an ounce of frivolous inflection. “Better start at the beginning.”
Lila Priouleau lost $2 million. Her dad, Cash, lost another eight. Including the premium they paid for Charlie’s put options, the family is out $11.25 million in total. That sum is all the money in the world for people like Betty and Fred Masters.
An $11.25 million loss, however, will hardly make paupers out of Priouleaus. No one likes losing money. Cash Priouleau hates it more than most. But I can almost hear father and daughter chant in unison, “It’s no big deal.”
The Priouleau family was worth $120 million in the late 1980s. Assuming their investments compounded at 10 percent per annum, the family is probably worth $800 million today. No doubt their holdings are scattered across trusts, real estate, hedge funds, traditional money managers, and all the other accoutrements of great wealth. Somewhere in that mix is a bond portfolio, and I would guess it totals at least $200 million. The interest income from municipals would wipe out losses from the Kelemen Group in about a year.
The really grim problem started with Cash’s business. Or I should say his industry. Car guys are characters. They were the ones who always made trouble during high school. Got loud and got drunk. As adults they still run in packs. During dozens of annual car conventions, Cash became quite close to a dealer from San Francisco and one from Chicago.
Through the years the three men traded investment ideas. A hedge fund here. A real estate deal there. It was only natural that Cash tell them about Charlie Kelemen and his fabulous fund of funds. As the interest in San Francisco and Chicago grew, Lila made the introductions.
“They each lost one-point-five million dollars,” she reported during our phone call. “ ‘Pissed’ would be an understatement.”
“Are they suing? Is that the problem?”
“Part of it,” she replied. “The four of us held a conference call last week. The guy from Chicago asked us to cover their losses.”
“All three million?” I asked. “What did Cash say?”
“He said, ‘It’s just business. You’re big boys. You knew the risks.’ ”
“That probably triggered some fireworks.”
“You got that right,” she agreed. “The guy from San Francisco threatened to fight our family through the Mercedes front office. He said we’ll lose our dealership.”
“That’s a civil matter. Why are the police and district attorney involved?”
“The Kelemen Group seemed legit, so I told Charlie we wanted two percent for making the introductions.”
That explains the $60,000.
“He paid you a referral fee?”
“It’s just business,” she replied defensively.
“You’re being charged with some kind of securities violation, I presume. You don’t have a Series 7 license?”
Our industry is meticulous about licensing and obtaining the right credentials to sell securities. For a moment my thoughts drifted back to the 97 Zola had scored on her exam. I was not sure whether referral fees required a Series 7.
“Our lawyers think they can handle the licensing issues,” Lila said. “But Charlie and I traded e-mails back and forth while we were negotiating the sixty-thousand-dollar finder’s fee.”
“I know where this is going. You deleted the e-mails.” Unfortunately, my intonation sounded somewhat accusatory. Not by choice. The words just came out that way as I grasped what Lila had done.
“I got scared when we discovered the Kelemen Group was a fraud,” Lila protested, feebly trying to justify her actions. “It was just business.” She lacked conviction, and the weight of her admission crashed our conversation like an anvil.
“I don’t mean to sound insensitive,” I said carefully, “but maybe you shouldn’t tell me any more. Advisers don’t enjoy the finance-guy equivalent of attorney-client privilege.”
______
At one point during our conversation, I had asked Lila, “How can I help?”
“Maybe you can say something to your friends at the police department,” she replied.
She was referring, of course, to Mandy’s story in the
New York Post
. Fitzsimmons had told the press, “Grove O’Rourke provided the links to Wall Street that busted this case wide open. He’s been a good friend to the police force, and we’re grateful.”
I called Mandy after the story ran, thanked her for putting such a positive spin on my role. In my attempt to bury the hatchet, I even teased her, “To think, I once thought your full name was Mandy Fucking Maris.”
“That’s funny,” she said. “Fitzsimmons tells me your middle name is Chowdahhead.”
Glad she didn’t print that.
It may be too late for Fitzsimmons and Mummert to help Lila, though. The damage is done. When Lila and I finished speaking, I agreed completely with her assessment. If anything, “I am so fucked” understates her problem.
I am not a lawyer. Most of the law I know comes from column six of
The Wall Street Journal
. From what I have read, however, it is a monumentally bad idea to destroy documents relevant to pending legal investigations.
In 2002 Sarbanes-Oxley updated the government’s laws on document retention. It is a criminal offense to destroy all the text missiles we send back and forth “in contemplation of” a federal “investigation” or “administration of any matter.” The penalties include fines, up to twenty years in jail, or both. E-mails rank among the top items not to destroy, even if you have not done anything wrong. The lawyers call this destruction “constructive interference.” It sounds like the kind of offense where the courts would throw away the key.
