Their investors made similar trades in extremely illiquid securities. There had never been any hint of outright collusion, but it wouldn’t have mattered. They used the same research, relied upon the same publicly available information, and did not profit one hundred percent of the time. By all accounts, they were legit.
“Whenever they’re in the same group, they don’t say a word to each other. But every so often they meet up in a corner of the room and then they’re waving fingers in each other’s face and looking like they’d love to smack the other one upside the head. But if someone joins them, they drop it and act like best buds.”
“What do you think?” Virgil asked. “No idea, boss. You’d think they were married twenty years and hated each other.”
“I need to know before the meeting Monday morning.”
I’d be working on Sunday. Skeli would be disappointed.
“I’m on it,” I said. Maybe we could fit in a stroll in the park before I headed off.
Virgil must have heard some reluctance in my voice. “Is there a problem?”
“Sybil’s a friend. And a colleague. She’s my son’s F. A.” Financial advisor.
He nodded. Friendships could be hard to maintain when your job required you to be suspicious of everyone. “And?”
“I’m hoping that I turn up zilch.”
“I don’t pay you to be ingenuous.”
I didn’t point out that he paid me because I had an ironclad contract and he had to deliver the green whether I showed up in the office or spent my days watching my daughter play in the sandbox at the Elephant Playground.
“I want you to go over all their recent trades,” Virgil said.
The securities those two focused on tended to trade by appointment only. A few buys and sells a week would be a lot. “I’ll call you at home as soon as I’m done.”
“Good. I’ll ask the two of them to come to my office before the meeting. We’ll do this together and bring in Legal or Compliance later.”
“If we need them,” I said, still hoping that their behavior had something to do with the eraser on Dean-o’s golf pencil, or his foot-wedging ability.
“No,” he said with a sigh. We all knew the temptations, but it was sad to see a colleague succumb. “There’s something there.”
We had a plan. Now I could watch the rest of the game in peace.
“A hundred bucks says the next pitch is a strike,” Virgil said, looking up at the television screen rather than at the field outside.
Across the room, the Kid giggled. I froze. He was still wearing the earbuds.
“Excuse me, Virgil. Damage control.” I ran.
The Kid saw me coming and my conflicting emotions must have been easy for even him to read. Anger, guilt, embarrassment. He jumped up and held the tablet to his chest. I couldn’t get to it to stop the program without a fight, and I couldn’t risk that.
“I want you to turn that off, right now.” My voice was strained and coarse. I sounded like a death-metal singer the morning after. “Now.”
He looked for a place to run, but I had him blocked. He hugged the machine tighter and began rocking — stimming. On the edge of losing control. The room had gone dead quiet. All eyes were focused on our little drama.
“Now!” I said. I tried using urgency rather than volume to make my point. It didn’t work. He pulled away. I reached for the iPad. He lurched to one side. My fingers found the ear-bud cord. He lurched again and the cord came free in my hand.
The volume was up. The background noise was momentarily still. The room filled with the unmistakable sounds of Skeli and me enjoying ourselves in a most primitive manner.
I froze in horror, my back to the room, and watched my son try to suppress his giggles. Outside there was the crack of bat meeting ball and the crowd roared its approval.
“That’s got to be a home run,” Sybil said in a deadpan delivery.
The laughter almost drowned out the crowd. Yankees lead, 5 to 0.
Skeli was not happy. A few hours’ work on a Sunday was going to cost me a foot massage, a bottle of Veuve Clicquot Rose, takeout from Gallagher’s Steakhouse, and a quartet of dark chocolate chip cookies from Levain Bakery across the street. And a walk in the park.
“Do you think Virgil is right? Is Sybil dirty?”
“I want to say no, but my heart’s not in it. I’d believe anything of Dean Harris. If you told me he was a pedophile, a mass murderer, and Harvey Weinstein’s wingman, I’d say, ‘Sounds about right.’ I want to think better of her, but I just don’t know. So far we’ve got no evidence. Virgil heard a rumor, and I watched a weird fight unfold.”
Skeli put a hand on the back of my neck and kneaded the tight muscles. I tried to relax into it, but my mind was already at work.
“So, go,” she said. “I want you with me when your head is clear and you can focus on being a dad.”
“I’ll take the Kid,” I said.
“Really? You don’t have to.”
“He can play games at the office as well as here.” It was a stunning fall day, with temps in the mid seventies and mere wisps of cirrus clouds frozen on a Celtic blue background. Children romped. Beautiful young women jogged. Brown-skinned men played soccer, their faces set in deadly earnest. Couples clung or gently touched as they strolled. And my son fired Angry Birds across his iPad screen while sitting on a rock.
“Did you ever get rid of that tape?” she asked.
“Sure,” I lied.
She laughed. “You are such a terrible liar. Did anyone ever tell you that before?”
I sighed. “I used to think I was good at it. I’m out of practice.”
“Well, go, and hurry back.”
“Goodbye, my love.”
“And don’t forget the cookies.”
The Kid nestled himself into a pretzel shape in the spare chair in a corner of my office and quietly played his game. In minutes I was deep into the trade history of Sybil Cooper. My friend.
Out of necessity, I had become a better trade auditor over the last few years. I no longer required a newly minted M.B.A. sitting next to me to understand the columns scrolling in front of my eyes. But I was still a plodder. A tortoise. Slow and steady.
As I had surmised, there were few trades. Sybil was not an active trader, always on the lookout for a quick buck, buying and selling for tenths of pennies on the dollar. Her approach was deliberate, research driven, and always with a long-term outlook. Her clients depended upon her for that. She occasionally made trades for her personal account, but there was no indication that she did so to the detriment of those clients. She did not “front-run” — buying in advance and with foreknowledge of a customer’s intent to purchase — or “dump” — unloading a personal position at a profit on an unsuspecting client. Her last trade had been a client purchase of fifty million dollars face value of bonds of an electronics retail chain that had been in bankruptcy proceedings for the last year. The actual value of the trade was around three mil. The debt traded at a steep discount of about six cents on the dollar. If the company could somehow squeak through and begin making money again, the client could easily earn five, ten, or even fifteen times the initial investment. A more likely scenario was that the judge and creditors would agree on a value somewhere close to six cents. It was a risky trade and not for the faint of heart, but if that magic number turned out to be seven cents on the dollar, the client would still have earned a seventeen-percent return. Risky, yes, but legal, as far as I could see.