Long Way Down (3 page)

V
irgil Becker—he had dropped the
Von
to differentiate himself and his investment bank from his father’s criminal past—was looking twenty years older than his age. It made me wonder if he was sick. Probably not, I thought, just mightily stressed.

The new offices were nothing like the old shop. The bankruptcy trustee had forced the sale of all the artwork by a range of twentieth-century American regionalists, from Benton and Wood to Wyeth and Rockwell; the collection of nineteenth-century American West memorabilia; the one-hundred-year-old Sultanabad carpets; and the flame mahogany open-horseshoe-shaped conference table with built-in videoconferencing, data support terminals, and rosewood inlay cup holders. Virgil’s office, the only one at the firm with four walls, wasn’t much bigger than my old prison cell up at Ray Brook. And like my cell, the walls were painted a flat gray, the only window looked out on an air shaft, and the shelving was metal with an industrial look. The sole remaining piece of Wild West flotsam was a framed hunk of fraying rope with a small brass
plaque that read
THE NOOSE USED
TO HANG THE OUTLAW
JESSE JAMES, JUNE 6, 1886
.

Virgil caught me squinting at the inscription. “Notice anything odd about that? The courts let me keep it.”

“I’m no expert on the Wild West, I never even watched
Deadwood
, but didn’t Jesse James get killed by somebody he knew? He got shot, right?”

“Shot in the back,” Virgil said. “And he was already four years in the ground when that hanging supposedly took place.”

“Is this a weird joke?”

“Nope. My father paid almost twenty grand for that. Bought it from a dealer in Oklahoma. I keep it to remind myself that anyone can get conned—even my father.”

Virgil’s father had run a multibillion-dollar bank that was revealed, after decades of operation, to be a multibillion-dollar Ponzi scheme. Investors were still haggling over the remains, but the old man had chosen to avoid all the controversy. He had hanged himself in his cell while awaiting trial. Maybe that old noose had given him ideas.

I was there as a consultant, having been originally hired by the family to help clean up the father’s mess. After tracking down some of the missing funds, and cleaning the stables, I had been rewarded with a near seven-figure job for life, helping to keep the troops honest and upstanding. I didn’t answer to Compliance or Legal, I dealt directly with Virgil. I liked it that way. I had a hard time getting along with compliance officers and Wall Street lawyers. I worked when I was needed, otherwise I was free to take other consulting work, read books while in a recumbent position, or take my son to watch the dogs play in the park.

“So, what did you think? What am I supposed to do?” Virgil asked.

We had just interviewed two of Virgil’s employees, a mid-level trader in the bond department and his manager, a man who had worked for Virgil and his father for almost ten years. One of them was lying.

“I know what you want to hear, Virgil. But I can’t say the words. The trader came clean. He admitted he was mismarking his book. He’s done it almost every year in December. I don’t blame him. I’m not saying that it’s right, but the deck is stacked against him.”

Traders get paid based on their annual profits, but decisions about their bonuses are usually made the week after Thanksgiving. Therefore traders have zero incentive to post any excess profits in the final month of the year. But if a trader posts a big loss that month, he knows his bonus will get cut back. So traders sometimes fudge the books. Managers are supposed to know about this and keep it from getting out of hand. Zero tolerance is a nice goal, but it’s not always the best option.

I knew more than a little bit about traders’ tricks, having been one for years, and having managed others, until I had done some tricks of my own. The fraud that took me down was entirely of my own devising, and I had spent two years in federal prison regretting it.

Virgil got stuffy when he thought I wasn’t seeing the big picture, as he called it. “I can’t afford even the hint of impropriety. Half my life is dealing with regulators and auditors these days.”

The trader had hidden almost a million dollars in profit by mismarking one of his more illiquid securities. I had found it fairly easily on a firm-wide scan—he hadn’t made much of an effort to keep it hidden.

“So you want to fire the trader. The guy who has been making twenty mil or so for you every year for the last five years. That’s a hundred million dollars, Virgil, and you’re going to can him for
putting one percent of that aside for a rainy day—or January, whichever comes first.”

“It’s not the money. He’s mismarking a position. The SEC will have us restating earnings going back to the firm’s inception.”

I saw the big picture; I just thought there was a better way of keeping the crowd of pirates, hustlers, gunslingers, and cowboys that comprised the workforce at a Wall Street firm from degenerating into a gang of thieves.

“The SEC won’t care if you don’t tell them. They don’t want to know about it. This is penny-ante stuff. You want to send a signal? You want to stop this kind of thing? Fire the manager. He sat here, looked you straight in the face, and lied his ass off, Virgil, and you know it. And he knew you knew it, and he didn’t care.”

“It’s a matter of ‘he said, he said.’ I can’t fire a senior manager over some finger-pointing mess. I’d cut the legs out from under every other manager I’ve got.”

“You hired me to find the cheaters, Virgil, not to tell you how to run the firm. I found this guy. Give me another week and I’ll find ten more. What they’re doing is not that unusual. If you fire the trader, you will have a late-year boost to earnings as every other trader marks his book correctly. And next December everyone will have forgotten the lesson and it will be the same crap all over again. But if you can the manager and bring in the head guy on every other trading desk and tell them
why
you are canning him, you’ll have a much better chance of never having to deal with this little problem ever again. And,” I said, smiling for the first time, “you’ll still get the pop in earnings, just as soon as they get back to their desks and lay down the law.”

He saw the logic, but it didn’t make him happy. “He stood by the firm when we were badly on the ropes.”

I gave him a look of open skepticism. “He had no choice. Where
was he going to go? The guy swears he had no idea his trader was mismarking the book. So he is either a liar or a total incompetent. Either way, he’s a loser. Give him the boot.”

“And the trader?”

“Tell him he’s on probation. But pay him a bonus based on what he legitimately earned. My bet? You will never have to have another conversation with him about this. Case closed.”

“I may lose some of my top managers this way.”

“And you’ll be left with guys who aren’t afraid to tell you the truth.”

He was sold, but it might take him a day or two to admit it. The manager was toast. If the guy had any brains at all, he was already sending out résumés.

“Anything else we need to discuss?” Virgil sounded more than tired.

“No,” I said. “Just that if you upgrade your oversight systems, as I recommended, you won’t have to bug me with this nonsense.”

My whining amused him. “You are not being sufficiently entertained?”

“Challenged,” I countered. My contract with Virgil was unbreakable. He owed me, and the paperwork confirmed it. This gave me a certain latitude when discussing my assignments.

“The new systems will be in place and ready for testing by mid-January.”

“And by next year this time, your traders will all have figured out how to circumvent them—if their managers let them.”

He shrugged, dismissing the subject. “Maybe you’re right. Meanwhile, I may have something that will stretch your mental muscles a bit more. What do you know about insider trading?”

“It’s illegal.”

“True. But I may need you to develop a more nuanced view. Read up on the subject and watch the news over the weekend. One
of the firm’s clients may need us to bail him out by Monday morning.”

Philip Haley, the CEO of Arinna Labs and an early wunderkind in the field of bioengineering, was being investigated, and might soon be charged with a single count of insider trading. It appeared that Haley had sold short the company stock, using an offshore bank, just before the board voted to announce the damaging news that the strain of algae the company was working on had been wiped out in a laboratory crash die-off. While this had happened before, and was a constant risk in this area of research, the board members were concerned that regulators might view silence as akin to fraud this close to a final-product rollout. Haley had repurchased the shares after the expected sell-off, and, in fact, the stock price had since recovered to its earlier level.

“Virgil, this sounds pretty open-and-shut to me. Can they tie him to the trade?”

“Mr. Haley claims that he did not do it.”

ACCUSED SUSPECT CLAIMS INNOCENCE!

It was a headline ready-made for the
Onion
.

“Why does the firm care? Or is Haley a special friend of yours?”

Virgil made a steeple of his hands and tapped his index fingers together. I knew him well enough to know that was how he expressed great agitation. “The firm owns a substantial position of special nonvoting shares. A scandal could prove to be dangerously expensive for us. And, yes, Philip is a valued client. We have worked together through his first IPO, the subsequent sale of that company, and the creation of Arinna. And he has stood by me through the disaster my father brought down and the subsequent restructuring of the firm. I would like to see him cleared.”

“I’ll make some calls.”

T
he Kid and I were finishing dinner. I had given his shadow, Heather, the evening off. Heather was a PhD candidate in psychology at Columbia, specializing in young children on the autism spectrum. The Kid and I trusted her implicitly. Someday she was going to finish her dissertation and venture out and get a more rewarding job, a thought that left me gasping in terror whenever I let myself dwell on the subject.

Skeli had a late meeting with the contractor and the designer, and I was enjoying having my son to myself for a bit. The Kid had his current favorite five cars lined up in front of him and his pencil and drawing pad near at hand. He wasn’t supposed to draw until he finished eating, but I wasn’t a tyrant about it. I had my laptop, which I wasn’t allowed to touch until we had both finished eating. But the Kid wasn’t a tyrant, either.

“How’s the grilled cheese?” I said.

He looked down at his plate. Half the sandwich was gone, eaten all the way to the crusts, so that an uneven strip of toasted bread remained like a ribbon with crumbs.

He nodded once. Good.

“Eat some zucchini, too. Temple Grandin got where she is today by eating zucchini.”

He squinted and wrinkled his forehead. He did not get it.

“That was a joke,” I said. According to her memoir, she never ate anything but yogurt and Jell-O.

He took a tiny morsel of zucchini, chewed thoroughly, and swallowed it.

“Knock, knock,” he said in his usual flat tone. His voice had lost much of the rasp it once had. He spoke more often and he no longer sounded as though it hurt when he talked.

“Who’s there?”

They had been working on humor at school. They approached the subject as with most things—logic and necessity. Humans—NTs (neurotypicals)—engaged in this activity, therefore the students should learn about it. The Kid now knew three jokes. He could tell them over and over, never laughing himself. If I didn’t laugh, he would become frustrated and angry. If I laughed too loud, he slapped his hands over his ears. I had negotiated a deal. No more than one joke at a time and no more than three repeats. And a chuckle counted as a laugh. So far it was working. Sort of.

“Mary.”

“Mary who?” I said.

“Mary Christmas.” Most budding comedians would have highlighted the punch line. Given it a little extra emphasis. Not my guy. It came out in the same monotone he almost always used.

I laughed.

“That was a joke,” he said quite seriously.

I laughed again and he frowned. Could he have been mocking me? Teasing? It would have been a first. It was too much to hope for.

“Knock, knock,” I said.

He ate another molecule of zucchini before answering.

“Who’s there?”

“Olive.”

“Olive who?”

“I love you!” I said, with a smile and a vocal flourish.

He took a large bite out of the sandwich and chewed ten times. Heather had explained to him that it was possible to choke and die on food that was not sufficiently chewed. He had decided that ten chews was the exact number required for grilled cheese and stuck to it. I thought ten chews was a tad overkill for a grilled cheese, but I kept that opinion to myself.

I had finished my grilled chicken Caesar salad with the lite dressing and no croutons. I would much rather have had the spaghetti carbonara from Piccolo, but Skeli had, rather gently, I thought, pointed out that my prison-honed physique was losing some of its edge. Curves were developing in places that had been planes.
Maybe I should join a gym,
I thought. I hated gyms.

The Kid was drawing. I checked his plate. He had eaten almost all of the zukes. A miracle. A very small miracle, but we take ’em any way they come. I stacked the dishwasher and stood for a moment, peeking over his shoulder.

It was a picture of a Camaro. No surprise. He had been drawing Camaros for two weeks. Cars were his passion. All cars, from Kias to Ferraris and everything in between. His pictures weren’t great art; he was no savant. But they were recognizable, which I thought was outstanding for a six-year-old. They were better than I could have done.

“You sure you don’t want to take lessons?”

He didn’t look up, he just shook his head once. Negative.

“I think you’ve got talent.”

He blew air out and covered his ears. I was distracting him. Annoying him.

“Heather says there’s a great art class for kids your age at the
JCC. You guys could go there together after school. Like one day a week. Want to try it?”

My son growled at me.

I sat down and opened my laptop and began to learn about the new client. Rather than begin the search by Haley’s name alone, I started with Arinna Labs. It was a mistake. I got the official biography. The sanitized version that had been told countless times in the
Wall Street Journal, Forbes, Fortune,
and dozens of other media outlets. Farther down the page there were links to articles in
People, Us Weekly, Slate,
and even the
Onion
. I ignored them and concentrated on the business magazines.
It would be another week before someone directed me to the rest of the story. If I had read those stories first, the case would have taken a very different turn.

Philip Haley—born to Christina Haley, a waitress, just outside Georgetown, South Carolina, forty-six years ago. Exactly my age. Father unknown. Brown’s Ferry Elementary School. J. B. Beck Middle School. Phillips Exeter Academy.

That was a jump. Exeter was among the toniest of New England boarding schools. Not many kids from that kind of background made it that far. Philip may have been unique.

I backed up and approached the issue sideways. A moment later, I found it. Football. Halfback. His middle school stressed both athletics and academics. An Exeter alumnus saw him play at state level playoffs and paid his tuition for the next four years.

Football carried him through undergrad, too. Princeton. Again a full scholarship, though he only played two years. His knee blew out during summer training before his junior year. It gave him more time for his studies. He finished a biotechnology degree—with a minor in economics—in four years.

Then there were two years at Prentiss Labs in Lincoln, Nebraska, working on various grains, where he must have saved every cent
he made, because his next move was back to the East Coast and Harvard for his doctorate. His thesis had something to do with optimization of natural gene mutation in single-cell plants, which put it on the growing list of books that I would never get around to reading.

He stayed on in Cambridge, founding a tiny lab whose business model seemed to be that they generated ideas, which they then licensed to bigger companies. The model must have worked. The little lab got big, went public, and two years later was absorbed by one of the giant pharmaceutical firms for the kind of earnings multiple usually reserved for social media Internet tycoons; Haley did more than all right in the transaction. The year before he turned thirty, Haley totaled his sports car coming back from his summerhouse on Cape Cod. The car was a McLaren F1, a super-high-end street legal rocket that the Kid had once told me retailed for approximately one million dollars.

While recuperating, Haley must have gotten bored waiting for his two hundred stitches to stop itching, and his two broken arms and a skull fracture to heal, so he went back to school. Harvard again. For an MBA this time.

Which is where our boy wonder met the woman of his dreams. Selena Pratt, sole heir to a coal mining fortune, and beautiful. Glen Head Academy. Yale. Harvard MBA. Straight through. Despite the pedigree and education, she must have been a bit of a rebel. She skipped her debut, turning up three days later at a Phish concert in Florida.

Her mother died while Selena was still at Yale—probably from shame that her daughter would never be accepted in society—and her father soon after. The grandfather was her guardian until she turned twenty-one and inherited three hundred and fifty million dollars. Selena sold off the balance of the coal business and began investing in alternative energy start-ups. She was also
a philanthropist, I found, supporting various causes around the world—most of them having to do with the environment, poverty, and health care. In the last few years, she had also contributed heavily to a charitable foundation that supported infertility research.

She and Philip had no children.