“And that’s when you move in?”
“Sure,” Bigelow says. “We want to know who’s trading. Most of the time it’s entirely innocent. A rumor got floated on Wall Street, and a lot of amateur arbitrageurs are hopping on what they hope will be a bandwagon-and probably won’t.”
“So your computers do it all?”
“Hell, no. Just the first line of defense. We also get tips from brokerage houses. Their computers pick up unusual trading activity. They report to us because they don’t want to get their balls caught in the wringer. Also, we get anonymous tips from divorced wives and husbands who want the boom lowered on their former mates. And sometimes we get squeals from honest executives who know or suspect the guy in the next office is buying or selling illegally on the basis of the next quarterly earnings report.”
“You check out the executives first?”
“Of course. If they’re officers of the company, they’ve got to declare buys and sells. If they don’t, they’re in the soup.”
“Look,” the Wall Street dick says, “I know you haven’t got the time or staff to check out every piddling little trade. I mean you’re not going to investigate Joe E. Clunk of Hanging Dog, North Carolina, who bought ten shares of this or that. So what do you look for?”
“Generally I look for trades of ten thousand shares or more. But if a corporation officer is involved, he’s as guilty if he trades a hundred shares as he would be if he traded a hundred thousand on the basis of inside knowledge.”
“But he could get his relatives and friends to trade for him.”
“Of course,” Jerry says, grinning. “Happens all the time. That’s when we’ve got to play detective, track down relationships, and tell them all they’ve committed a no-no.”
“And what do they get for that?”
“Usually they have to surrender their profits, pay a fine, and are put on probation. A few go to the clink.”
“For how long?”
“I think the longest sentence for insider trading has been four years.”
“Which means the guy is out in eighteen months.”
“Probably,” Bigelow says, shrugging. “But that’s not my problem. I’m supposed to make the case. What the judge decides is something else again.”
Cone lights up a cigarette, after offering the pack to the other man. But Jerry declines.
“I stopped smoking four years ago,” he says virtuously. “You know what those things are doing to your lungs and heart?”
“Please,” Cone says, holding up a hand. “I’ve heard all the lectures and none of them take. Let me enjoy my vices. Now what’s this Snellig Firsten Holbrook deal you mentioned on the phone?”
“Like I said, it’s a leveraged buyout. An old outfit named Trimbley and Diggs, up in Massachusetts. They make brooms, brushes, wooden clothespins, and stuff like that. But they also own some choice shorefront real estate. They went public about twenty years ago and have been paying a small dividend-but never missing a quarter. It’s a small outfit, Tim; General Motors it ain’t. If their daily trading volume hits, say, ten thousand shares, it’s a big day. Now the top executive officers want to buy them out, take the company private again, and develop their beachfront properties. Snellig Firsten Holbrook is handling the deal. But suddenly the daily volume is way up-almost a hundred thousand shares last Friday. Nobody can figure how the buyout leaked. Someone is gobbling up shares, and we want to know who.”
“The arbs?” Cone asks.
Bigelow shakes his head. “I doubt it. Not enough loot in it for them.”
“Yeah,” Cone says, “I can understand that. But what’s all this got to do with me? I work for Haldering, and we don’t have Snellig Firsten Holbrook as a client, or Trimbley and Diggs either. So why am I supposed to get involved?”
“One,” Jeremy says, holding up a thumb, “as a personal favor to me. Two,” he says, pointing a forefinger, “because it’s a puzzle, and I’ve got you made as a guy who likes puzzles. And three,” he adds, extending his middle finger, “who the hell do you think recommended you to Pistol and Burns?”
“Jesus,” Cone says, “you’re really calling in your chits, aren’t you?”
“Just take a look at it, will you? I brought you computer printouts of trading and a record of the stock since the leveraged buyout got started.”
“What’s it selling for now?”
“About eight dollars a share. A week ago it was four.”
“All right,” the Wall Street dick says, sighing. “Leave your bumf and I’ll take a look. No guarantees.”
“Thanks, Tim,” Bigelow says gratefully. “In return, the SEC can be very cooperative with Haldering and Company if the occasion ever arises.”
“Who the hell cares?” Cone says roughly. “When are you going to buy me a street lunch like you promised?”
“You give me a lead on this, I’ll take you to The Four Seasons for dinner.”
“Yeah? They got ham hocks?”
He would never lie to Samantha Whatley on a personal matter. But he will lie to her officially, as his boss at Haldering amp; Co. That he can do with nary a qualm.
He lounges in the doorway of her office. “Listen,” he says seriously, “I’ve got to go back to Pistol and Burns and finish up that job.”
“Yeah?” she says. “I thought you were all done with them.”
“I need a couple of more days. Clean up some odds and ends. Then I want to talk to Twiggs about the final report.”
She looks at him suspiciously. “So what you’re telling me is that you’ll be out of the office again this week.”
“Just until Wednesday or so. I’ll have it wrapped up by then.”
“You better,” she says. “I’ve got three new files waiting for you.”
“Gee, thanks, boss,” he says. “That makes me feel warm all over.”
Jeremy Bigelow has left his battered briefcase stuffed with all the skinny on the Trimbley amp; Diggs buyout.
“You can borrow the briefcase,” he tells Cone. “But I want it back eventually.”
“What for?” Cone asks. “Sentimental attachment? It’s a piece of junk. You should pay me for taking it off your hands.”
So he plods up Broadway in a warm drizzle, lugging the case and feeling no guilt at having conned Sam. The world isn’t going to come to an end just because he finagled a couple of days off. Besides, it is a good cause: cooperation with an agency of the U.S. Government.
Back in his loft, he pops a tall can of Bud. Then he opens Bigelow’s briefcase and dumps the contents onto his wooden table. He sets the empty case on the floor, and Cleo immediately jumps in and curls up contentedly.
“Leave your fleas in there,” Cone tells the cat.
He reads all the papers and reads them again. Then he sits back and considers the case. It’s pretty much as Bigelow described it. The first printed documents are dated about three weeks previously and deal with Snellig Firsten Holbrook’s suggested plan for the proposed buyout of Trimbley amp; Diggs, Inc.
Subsequent printed documents amend and refine the plan. Then there’s a letter assuring the principals involved that the required funds can be raised through the sale of high-risk bonds, and Snellig Firsten Holbrook has “every confidence” the bond issue will be oversubscribed.
All that is routine stuff, and Cone can’t see anything freaky going on. What interests him more are the computer records of trading activity in Trimbley amp; Diggs. The volume began to climb about ten days ago, and the stock, listed on the Nasdaq National Market, rose in value steadily from about $4 a share to its current price of slightly over $8. Nice. The buyers are probably rubbing their sweaty palms with glee and wondering whether to hold on or sell and take the money and run.
Cone leans down to address Cleo, who is snoozing in the briefcase. “Sometimes the bulls make money,” he says, “and sometimes the bears make money. It’s the pigs who always get stuck.”