Authors: Greg B. Smith
Nothing But Money (9 page)
In the 1980s, stock promoters were considered a kind of second-tier player on Wall Street. They were kind of public relations pimps who plugged small companies headed for public offerings in the over-the-counter market. Now in the 1990s, Cary decided stock promotion was the only way to go. Only suckers stayed with the big brokerage houses. Stock promoters were basically guys without broker’s licenses who would promote the stock of a specific company. They essentially hyped specific stocks, for a fee. This was different than the supposedly objective world of the stockbroker, who wasn’t supposed to have an allegiance to one particular company or another. Always a master of jargon to make something sound greater than the sum of its parts, Cary put it this way: “I would do financial PR. I would try to get retail buying or establish retail interest in their company.”
Cary was well aware that his newfound vocation had the potential to drift from the purely legal into the clearly questionable, but he was willing to take his chances. He had come to believe that truly successful people did not get where they were by following every little rule and regulation. Sometimes you had to push the envelope, take risks. There were too many rules, anyway. Nobody followed every one. Just watch people driving. People ease through stop signs without coming to a complete stop every day, and rarely does that cause problems. People switch lanes without using their blinkers every minute of every day. Probably once in a while that causes an accident, but the numbers aren’t overwhelming. You’re already signing up for risk when you get behind the wheel of a car. The same holds true for Wall Street.
The biggest problem was all those disclosure requirements.
Stock promoters were really children of the night. Rarely did they stand in the sunlight of full disclosure and tell the trusting investor that they were being paid a fee by a particular company to promote that company’s stock. Brokers were never supposed to be wedded to a company financially, and if they had any such ties they were obligated—required—to make that known to their clients. Stock promoters had no such requirement because they were never supposed to be in direct contact with the clients. They worked behind the scenes, and were useful in facilitating any number of transactions. Mostly they were about making a company appear to be the next McDonald’s. They were capitalist weathermen, using charts and graphs and most importantly numbers to prove their case. They implied exclusivity. They made the investor feel like he was getting something the other poor loser was not. They made the investor feel the superiority of the insider, the guy who gets past the velvet rope. They used the euphemisms of business to reassure nervous investors that they, and only they, held the key to massive and easy affluence.
And 1991 was a good time for stock promoters. Hardly anyone in the world of government regulation paid much attention to them at all. As far as Cary was concerned, that was okay. And he’d convinced himself that promotion was a legitimate way to make lots of money. He would tell friends the big firms like Bear Stearns did almost the same thing when they bought blocks of stock in a specific company they had an investment banking relationship with. The firms would designate the client’s stock as the stock its brokers would now push as “stock of the week.” In return, the brokers pocketed commissions. Sometimes the clients were aware of the fiduciary relationship between the brokerage house and the company. Sometimes they weren’t.
“The stock would then be in my partnership account and that stock would then become the stock of the week. Then our four hundred and sixty retail brokers would get on the phone and use any other words you want, pump the stock, hype the stock, and we had, at one point in time, we had five hundred brokers. When I say ‘we,’ I speak of the partnership at Bear Stearns. We had five hundred retail brokers, which were the highest producing brokers on the Street. And this wonderful retail sales force would go out, all right, and recommend the stock that we had in our account. And there would be whatever sales credit, there would be whatever extra commission the firm would give.”
He described the “stock of the week” companies feting brokers at the Four Seasons, pumping them up about selling the stock that the brokers owned themselves. It was called a “dog and pony show,” and, Cary was quick to add, it was all legal financial PR.
That was the way Cary saw being a stock promoter. He was still working with Lowenthal Financial Group, but it didn’t really matter who he was working for. If there were any problems, he was a stock promoter. Lowenthal, for instance, had been caught by the NASD “forgetting” to make payments in arbitrated disputes. They’d been fined and reprimanded, but Cary’s fingerprints were nowhere in sight. He was under the radar; he was living on the edge.
Cary had reason to believe the edge would soon be mainstream. In the middle of 1991, with the city spinning out of control and the mayor of New York insisting that his city was not Dodge City, there were whispers of a Wall Street revolution in the wings. The word was the financial markets would never be the same because of a little known entity that was growing year by year. It was called the Internet, and Cary believed it was going to be huge.
In 1991, the Internet was still used mostly by university professors and scientists and Department of Defense employees, but it was growing every day. The first microprocessor had been around for twenty years. Apple Computer had been around for thirteen years. IBM had produced its first PC a decade earlier, and Microsoft was now its operating system of choice. By now, Microsoft had split twice and was trading just under $5, up from the pennies it started with. The web had been in existence for two years, and already people were talking about using it to let investors know about investments. The over-the-counter market, which had been powerful during the 1980s, would soon be the over-the-web market and the opportunities would be endless.
Or so Cary hoped. Anyway, he couldn’t complain. In his new role as stock promoter, he was making a killing, which was why he could afford to be spending a long weekend in Aspen. His new gig also allowed for more flexibility. He wasn’t working for a brokerage house anymore, so he was his own boss. If he wanted to spend a four-day weekend in Aspen, he could just buy the first-class tickets and disappear for a bit. His clients could leave messages with his phone service, and he’d get back to them quickly. They usually didn’t need him on an emergency basis anyway, so when the phone rang at the hotel where he was spending his well-deserved cash, he figured it was not about work.
His sister Andrea was on the line. She kept it simple.
“Mom is dead.”
CHAPTER NINE
July 1, 1997
The fourteenth-floor apartment on Central Park South was the kind of art deco address Rodgers and Hart dreamed about. Right at the southern edge of the park, between Seventh and Eighth Avenues in the heart of the island of Manhattan, it faced Frederick Law Olmsted’s masterpiece in all its splendor. In the daylight the park presented an ever-changing seasonal panorama: a forest of pale green in the spring; a glorious wonderland in winter; a carnival of maroon, yellow and orange come fall. In the summer it was an emerald carpet, the castles of Manhattan peeking out at the edges. And at nightfall, the view from the fourteenth floor really came into its own. The park became a great black sea ringed by the jewelry boxes of Central Park West, a twinkling armada headed uptown to the northern tip of Manhattan. This was the view Francis Warrington Gillet III had purchased for himself and his new family. An address to envy. A castle in the sky. Far below, yellow taxis competed for tourists, their horns and screeching brakes a distant symphony. Up here on the fourteenth floor, Francis Warrington Gillet III lived above it all.
As he stood in the dark alone at midnight, gazing down upon the park,
his
park, Warrington remembered his birthday. It was something he usually tried to forget. In October he would turn thirty-nine. In some ways, thirty-nine seemed worse than forty. Any year with a nine in it meant you were looking back and trying not to look ahead. Thirty-nine meant this was the last year he could say he was in his thirties. After that he’d be middle-aged. You might even say halfway done. Halfway done meant you had to take stock of what you had accomplished. You had to make comparisons, reflect on certain choices. You had to add things up and see whether you were greater or lesser than the sum of your parts. In the summer of 1997, Francis Warrington Gillet III believed he was destined to beat that equation. He had found his calling, and it was money.
his
park, Warrington remembered his birthday. It was something he usually tried to forget. In October he would turn thirty-nine. In some ways, thirty-nine seemed worse than forty. Any year with a nine in it meant you were looking back and trying not to look ahead. Thirty-nine meant this was the last year he could say he was in his thirties. After that he’d be middle-aged. You might even say halfway done. Halfway done meant you had to take stock of what you had accomplished. You had to make comparisons, reflect on certain choices. You had to add things up and see whether you were greater or lesser than the sum of your parts. In the summer of 1997, Francis Warrington Gillet III believed he was destined to beat that equation. He had found his calling, and it was money.
The great-stepgrandson of the cereal heiress Marjorie Merriweather Post and the scion of the Gillet family, a family of United States senators and old horse country money, had arrived at his destiny. He was a stockbroker. A maker of big money. He was clearing $300,000 net, and he’d set his sights on much more. Looking over at the lights of Central Park West, he could remember what it was like when he first arrived in May of 1996, still a bachelor stockbroker living large in the all-night party that was Manhattan. At the time, he was swimming in opportunity. A chart of the Dow from the Crash of ’29 to 1996 looked something like a ski slope that no towrope could climb. Starting in about 1995, the trading volume had begun to rocket skyward, and the increase was reflected in Warrington’s rising commissions. The Dow, which had traded under 5,000 for sixty-five years since the crash, was headed for 10,000 and nobody was going to stop it. The fabulous flop of the 1980s now seemed like a speed bump. There was no way to go but up, and Warrington had managed to wangle himself a front-row ticket to ride.
Life was good. He’d worked his way up from a rookie at Smith Barney in 1989, when the market was in the toilet. He bounced to a small shop called Global American, which went out of business. He suffered fits of unemployment, but that was the way it was on Wall Street. He jumped to Lad enburg Thalmann & Co., then Grunthal & Co., then Baird Patrick & Co. in 1995, just as the market began to take off. Most of his clients were wealthy overseas customers he found through his connections from private school and steeplechase and growing up around extremely wealthy Maryland horse country people. He bought and sold stocks for large institutional investors like the Bank of Monaco. He earned a mention in a
New York Times
gossip column as a “prince of the moment,” right alongside John F. Kennedy Jr. and David Lauren.
New York Times
gossip column as a “prince of the moment,” right alongside John F. Kennedy Jr. and David Lauren.
And 1996 was looking even better. He’d hooked up with a small-sized outfit called Monitor Investment and was practically the top producer at the place in no time. His contacts were golden. He bought a Lamborghini. He hung out at Harry Cipriani’s on Forty-second Street. He was on top of the world. That very night he’d gone out drinking with friends and it reminded him of those days when he was still single. The giddiness you got hanging around models, the freedom you acquired with your corporate expense account, the belief that you were invulnerable. Then he remembered—1996 also included the arrival of Warry the Fourth.
Warry the Fourth had shown up in May and changed everything. For his entire adult life, Warrington III had done pretty much what he wanted when he wanted. His childhood was kind of a dream. He’d grown up around money in a house with its own name—Tally Ho Farms. His kingdom consisted of rolling green hills, miles of clean white fence, Thoroughbreds prancing in the morning sunlight. He never had to think about attending public school. His sports were steeplechase and polo. He knew people who wore cravats without irony. There were yachts and servants and winters in Monaco. It was a perfect little world, far removed from mundane middle-class existence or the scary world of the poor. It was the world of the Gillets of Worthington County.
Staring out at the darkened park in the heart of the big city, Worthington County seemed pretty far away. It surely had been one surreal trip. He’d bummed around Europe endlessly until he was bored out of his mind. He’d tried competing professionally at steeplechase until he failed but told himself he was bored out of his mind. He’d immersed himself in acting school and, for the first time, was not bored out of his mind. He truly loved it. He had a vague sense that if he put his mind to it, he would succeed. It would just happen because it always did. People in his world were simply bound to succeed. They were blessed with so many advantages; the idea of failure was not to be considered. At least, that’s what he’d been told.
It wasn’t that simple, of course. He’d only made it through two years at Villanova, bored by his chosen subject, economics, so he was wandering through the world without a college degree. And when he went to acting school, it was his father who paid his rent on Sutton Place. And he wasn’t a very good actor. He wound up doing mostly TV commercials. His best role was a nonspeaking part as Jason in one of the
Friday the 13th
horror series. He got the part because he didn’t make the cut for a speaking role.
Friday the 13th
horror series. He got the part because he didn’t make the cut for a speaking role.
And now he was a father and husband.
He had met Martina at the Coffee Shop in Union Square. At the time, back in 1995, this was a happening place. It was one of those spots that become hot for a year and then are as empty as the Canadian wilderness when someone—no one knows precisely who—declares the place dead. The Coffee Shop was, in 1995, the kind of place Warrington could relate to. Young people—mostly younger than Warrington—trying to talk on cell phones over the cheerful din. Everyone always on their way to something else. And lots of models. In 1995, Warrington spent lots of quality time in places like that. In 1995, if you were an up-and-coming Wall Street guy trolling for rich clients and aggressively pursuing a certain image, you were expected to be out pretty much every night of the week talking to beautiful women.
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