Authors: John Rolfe,Peter Troob
The first five seconds of relaxation were pure bliss. Not only was the physical relief first-rate, but I was performing an
act most unbecoming of an investment banker. That made me proud. Someday, I’d be able to tell my kids about this seminal moment
in my professional life and they, too, would be proud of their father. As the bottle grew warmer and heavier, I realized that
I should have put a little bit more thought into my plan up front. By the feel of things, there were only about two ounces
of space left in the bottle. The problem was that there were at least twelve ounces of golden delight left inside of me, and
far too much momentum to turn off the spigot. I let the bottle drop to the floor and continued to tinkle unencumbered, showering
both the Rainbow Room’s carpet, and the managing directors’ shoes, with my goodness. If either of the managing directors to
my sides checked their wing tips upon returning home that evening, they would have noticed a unique speckled pattern covering
their lovingly shined shoes. It was my personal tribute.
Now through all these comings and goings I hadn’t forgotten my original goal for the evening—the identification and pursuit
of free love. In fact, throughout my evening of sedentary pleasure there at the table I’d had an ongoing dialogue with a number
of prospects, but none of them had come to full fruition. As I saw Troobie walk by, I corralled him.
“Troobie, what’s going on?”
“I’m all fucked up. I just peed underneath the table.”
“You did what?”
“I peed underneath the table here.”
“Well then why the hell are you still sitting there? Move your lazy ass somewhere else, you filthy pig.”
“Yeah, I guess I’d better.”
“Well, what do you want to do, Rolfe? The party here’ll be going on for another hour or so, then they’re gonna shut it down.
The question is whether we stay here to take our chances or go and get a sure thing.”
“What do you mean, sure thing? You mean a strip joint?”
“Yeah, what else.”
Right there, Troobie and I should have realized how far we’d sunk. We were so hard up to get a peek at some ass that we were
about to leave a fully paid, top-shelf party, full of all kinds of women just itching to get laid, so that we could hunker
down in a seedy sex parlor and pay a bunch of gyrating Delilahs to let us fondle their anatomy. And while some might argue
that perverts are born, not made, I’d take exception to that. The job had shifted reality for us. It was making us crazy.
We had no life outside of work because we were working hundred-hour
weeks, which meant that Friday nights, Saturday nights, and Sunday nights found us sitting in the office more often than not.
We didn’t have enough time on the weekends to go out on dates, meet women, and establish relationships. When we got the rare
night off we wanted a guarantee that we could make the most of it. The only way we knew of to guarantee something was to keep
throwing money at it until it happened. The night of the holiday party, that meant that there was no way we were going to
waste time working on a 50 percent chance of getting one of the BAs to come home with us when we knew we could hit the peep
shows, lay down some cash, and have a 100 percent chance of at least
some poontang. In our minds, there was no comparison.
Troobie and I put our heads together. The way we saw it, there were two alternatives. We could go to one of the usual upscale
places like Scores, Tens, or the VIP Lounge or we could be more debaucherous, roll the dice, and go to the Vault—a sex club
down in the meatpacking district. The Vault offered up the not so standard S&M fare: men with minor self-esteem problems lying
in the piss trough, dominatrixes leading their subservient partners around the room on leashes, spankings, hot wax, and cat-o’-nine-tails.
It was the Betty Crocker’s kitchen of sadomasochism.
We decided to split the difference and go to the Harmony Theater. The Harmony was filthier than the strip clubs but not as
low as the Vault. It was a Shenanigan’s meets Peepland—a full-contact booby bar where a single dollar could buy you a grope
up on the main stage. When we got there, Troob and I parted ways for a while to find the women of our dreams. I saw Troobie
a lap dance at one point while the stripper used his Hermès tie like a big piece of dental floss between her legs. Troob told
me later that he had to barter the tie away for another lap dance after he ran out of money. As it turned out, Troob and I
weren’t alone in our desires. After about an hour our colleagues Tubby, Slick, and the Big Man all walked in. I guess that
they were looking for a sure thing, too.
From my perspective, the only repercussion to come from our night of holiday bacchanal was a burgeoning realization that our
lives were pathetic. For Troob, though, the effect of our night out was more profound. I walked into his office the following
day with a huge smile on my face, despite a wicked hangover. I’d come to recount the previous evening with him, and revel
in our naughtiness. What I found, though, was a chastened Peter Troob.
“Troobie, man, that was GREAT last night! We gotta do it again soon. I gotta get back down there to the Harmony. I love chasing
the ladies with you.”
“I don’t know, man. I don’t feel so good about it.”
“You don’t feel good about it? What the fuck is that supposed to mean?”
“It’s Marjorie, man. Don’t tell anybody I said this, but I feel guilty about last night.”
Marjorie was the girl from Chicago that Troob had been dating. He had met her over a year before, and their relationship had
seemed to stick. She knew he worked hard, and he had been forced to bail on her before, but since she lived in Chicago she
didn’t really know just how bad his work hours actually were. That was good. I knew that Troob liked her, but that hadn’t
stopped our debaucherous pursuits before. I could see that Troob was starting to get that look in his eye that you see in
your friends right before they leave the bachelor brotherhood. That look scared me. He was my comrade-in-arms, my partner.
Troob was already getting up the curve on developing a conscience. That was troubling.
Sometimes I get the feeling that the two biggest problems in America today are making ends meet
and making meetings end
olfe and I knew that meetings would be a major part of our existence as bankers. We never imagined, though, just how absurd
the meetings could get. Banker meetings are a lot like the Ebola virus. They start out small, but they grow quickly. And they
don’t stop growing until they’ve consumed everything around them. At times, when it came to meetings, Rolfe and I felt like
we were trying to play two-on-two basketball with twenty-five people on each team. We never really nailed down why banking
meetings always seem to end up out of control, but we think it has something to do with how the new generation of bankers
In the early days of banking, bankers were a lot like drug dealers. They told the potential customers, “My shit’s the best,
man, it’ll really do the job for you.” The customers told themselves, “This guy’s dressed nicely,
he’s smooth, he must have the goods.” They bought some of his shit and they took it home. They smoked it down, they shot it
up, or they put it into their portfolio, and then they waited. Nothing happened. They weren’t getting high. They weren’t getting
rich. Sometimes they even got a headache or, if they were really unlucky, they got some really bad shit that killed them.
That was the nature of the beast.
Before the Great Crash of 1929, bankers were selling all kinds of bad shit to the public. They called the bad shit “securities.”
It was like the bankers were packaging up little dime bags of flour and telling the customers that it was high-grade cocaine.
The customers didn’t care, because they never tried it and didn’t know what it was. There was always some bigger fool that
was willing to pay them even more for their little bags of flour than they’d paid themselves. And then, one day, some random
guy tried snorting up some of the flour and he realized that it wasn’t cocaine at all. He realized it was crap. He sold his
little bags of flour and told two friends what he’d figured out. Each of them, in turn, called their brokers, sold their bags
of flour, and told two more friends about what was going on. Before long, everybody was trying to sell their flour, nobody
wanted to buy it anymore, and the Great Crash had arrived. The game was up.
In the wake of this scandal, the federal government decided that somebody had to reign in the freewheeling bankers and their
errant sales forces, who’d foisted the little flour bag scam upon the unsuspecting public. With this goal in mind, President
Roosevelt’s regulators jammed reforms through the legislative branch under the guise of the Securities Act of 1933 and the
Act of 1934. Among other things, these Acts created the Securities and Exchange Commission, or SEC, which is now responsible
for the monitoring and administration of most aspects of securities issuance in the United States.
The SEC is pure government bureaucracy. Its policy is never to approve any aspect of a new securities issuance; its only “approval”
of a given deal comes in the form of a “failure to disapprove.” In other words, when a company and their investment bank come
to market with a deal, the SEC doesn’t give a seal of approval that the deal’s OK, it merely states, “We’re not saying that
OK.” It’s one of those double negatives that guys use to fool their girlfriends after they’ve done something wrong.
One of the requirements for securities issuers is that they make a filing with the SEC every time they intend to sell new
securities to investors. The filings contain very specific information about the company issuing the securities and the nature
of the securities themselves. These filings, which generally have to be made available to the investing public, go by a number
of different names: S-1, S-3, S-4, the list goes on and on. The type of filing depends on what kind of securities are being
issued. The important thing to remember is that the filings are required by law, which means that the bankers don’t have any
choice but to put these documents together before they can go out, sell the securities, and earn their fees. They can no longer
just tell the buyers that their shit is the best and the companies they are representing are high fliers, now they have to
put it in writing. That presents a problem for the bankers, because it creates a paper trail.
When things go awry, the buyers know where to point the finger and where to go looking for payback.
For the ever optimistic bankers, the filing requirements have created an opportunity. The bankers have decided that if they’re
going to be forced to create this public filing, then they’re going to do it on their own terms. They’re going to turn it
into a sales brochure, complete with color pictures and promotional material about what a fantastic, once-in-a-lifetime investment
opportunity the securities being sold represent. They’re going to take that filing, print it up in a neat little package,
and mail it out to all the potential buyers. Once it’s in the buyers’ hands, the bankers will take the smoothest, best-looking,
most presentable members of company management, trot them out to all the big potential buyers, and put on a show. It’s called
a road show, and it’s in the best tradition of the traveling medicine shows. Instead of traveling around and putting on the
show off the back of a covered wagon, though, the bankers and the members of management use private jets. They stay in the
best hotels, and put the show on in fancy restaurants, so that the buyers can have a nice meal while they hear about how wealthy
they’re going to get by purchasing the company’s securities. It’s critical to maintain the image of big money. The buyers
have to believe that the management team knows how to make coin. They have to believe that this is the team that’s going to
make everybody rich.
Before the show can begin, the bankers and the company have to give birth to that sales brochure. It’s called the prospectus.
It’s a tricky job, because at the same time that the prospectus tells the buyers what a great opportunity
exists, it also has to cover everybody’s ass and meet the letter of the law on SEC filing requirements.
A long time ago, somebody figured out that if he came up with an important-sounding name for these meetings where the prospectus
is created, people wouldn’t focus so much on what a waste of time they were. They decided to call them “drafting sessions.”
All associates experience their fair share of drafting sessions. Rolfe and I were no exceptions.
Drafting sessions involve a big cast of characters. Everybody gets together in a room. They spend long days disagreeing with
each other on what should be in the prospectus.
The bankers are always there. They only want to say good things. The better they can make the company sound, the easier it
will be for them to sell the securities. The easier it is for them to sell the securities, the more certain they’ll be that
the clients will be happy. That means fees. Fees are important.
The bankers have their lawyers there—the underwriters’ counsel. The job of an underwriters’ counsel is to make sure that the
bankers don’t put any lies into the prospectus that are going to get them into trouble later. They have to twist the language
in the document around so that if the prospectus ever gets brought up as evidence in a court of law the judge and jury will
be so confused that they won’t have any idea what the language is claiming, or trying to claim, or maybe not even claiming
at all. They have to be crafty.
Representatives from the company are there. The CFO almost always shows up; he’s usually in charge from the company’s side.
Sometimes, depending on how important
the transaction is to the company, the CEO may show up as well. If it’s the company’s first trip to the public markets for
money the CEO usually comes in for lunch one day during drafting. There’s almost always somebody more junior from the company
there also, usually somebody from the investor relations department. The CFO needs to have somebody to pin the blame on in
case things get fucked up.