Zero Sum, Book One, Kotov Syndrome (6 page)

He couldn’t afford that because he’d
over-invested on the way up without bothering to hedge his bets,
meaning the Allied shares and options were now a considerable chunk
of his fund’s position; and given that he’d continued buying for
months to keep upward momentum going, he was very, very pregnant
with the stock.

Trading was about to begin for the day,
and he planned to temporarily dump the stock into the toilet,
hopefully causing some panic selling so he could make some short
term profits from a slug of short positions and put options he’d
bought – both of which were time sensitive, but could make a lot of
dough if the stock lost twenty percent during the day and he
covered, then took the other side of the trade and the stock
magically recovered.

Griffen punched in the digits for his
attorney.

“Glen, any movement on the matter we
discussed yesterday?”

“I’m working on it. Let’s get together
for lunch, someplace quiet. The club?”

Griffen frowned. “Today’s kind of busy,
can’t we do this over the phone?”

“I’m hungry. Let’s make it around one
o’clock. I’ll have some news.”

Griffen paused, calculated. “One
o’clock. Sounds great.”

That was a good sign. It meant Glen had
some information he wasn’t comfortable sharing over the phone.
Perhaps things were improving after all.

Steven finished his morning run and was
at the computer by 6:20 a.m.. The markets were jittery and rumors
were floating on the message boards about insiders wanting to sell
ahead of bad news.

Allied opened on time and the trading
was muted, with sixty thousand shares trading hands and the price
up twenty cents in the first forty-five minutes.

Then it all crumbled.

The boards lit up with negative
chatter, the volume spiked, and the price started fluctuating
wildly. The carnage hit at 10:30 EST as the stock went into
freefall for six minutes.

Breaking through $34, it fell quickly
through the $33s, and then into the $32s. It just kept dropping and
dropping.

Nothing on the wire service; no news or
reason for any of it. Steven sensed opportunity and decided he’d
call the bluff – he’d witnessed enough of these attacks to know a
head fake when he saw one. If this was a short term manipulation he
could throw his day trading budget at buying shares and call
options – which increased in value if the stock went up – and use
the profits from the swing to offset most of this month’s losses on
the Allied short position.

He started buying shares and calls at
$32.10 and kept reloading his three thousand-share buy order every
time it was hit. After accumulating eighteen thousand shares and
five hundred near-term expiration call options, a bid jumped in
above his, and then another bid jumped in above that one. Pretty
soon steady buying was coming in and the price climbed above
$33.00.

He watched as other buyers came into
the market and the price stabilized. As the day progressed it
became obvious a wall of buy orders sat at $34, allowing him to
sell his day’s shares and options towards the close, making a tidy
profit from just a few hours of understanding the game.

Not a bad Friday; he was up 6% on the
session’s buys, which had bought him breathing room on his
underwater short position.

He spent the rest of the day preparing
for his flight to the East Coast, an impromptu weekend trip he’d
thrown together. Jennifer was staying in California; she detested
flying and wasn’t a big fan of New York. She’d agreed to stop by
and take Avalon for walks and keep him in kibble, so he couldn’t
complain. He kind of didn’t blame her; New York in the summer could
be brutally muggy.

Griffen entered the hushed foyer and
was greeted by a vested attendant. Cherry wood paneled the walls
and oil paintings of long-forgotten dignitaries scowled down at the
heavy green velvet furnishings, setting a somber tone. Very old
school, old money, cigars and cognac-feeling establishment. He was
known at the Manhattan Polo Club, and was shown to one of the
private dining rooms by the
maitre d’
; a serious British
gentleman who’d held the coveted position for decades.

Glen Vesper was already seated, a glass
of Chardonnay half consumed, looking appropriately lawyerly. Glen
was thin to the point of resembling a praying mantis, and had
looked sixty-something for the fifteen years Griffen had known him.
During that time, he’d seen Glen smile twice. It wasn’t a pretty
sight.

“Sorry I’m late. We’re getting creamed
in the market today.” Griffen ordered a glass of Shiraz from the
waiter, who disappeared soundlessly.

Glen nodded. “I took the liberty of
ordering two poached salmons. They should be here in a few minutes.
I’ve some good news. We have some info on your mysterious admirer.”
Glen paused to sip his wine. “First, we think it’s a civilian, not
a pro. The site address was bogus, the Hotmail account a dead end;
the name a fake. But we know who their service provider is, and we
know they were careful. We hacked into the server and scanned the
pay statements before the security software shut us down. A year’s
worth of service was paid for via postal money order. No name other
than the fake one, so dead-end there.”

“Why do you think it’s a civilian,
then? Seems pretty sophisticated to me,” said Griffen.

“A pro wouldn’t have used a domestic
server, for starters. And they would have used an anonymous
registration service rather than filing false information. And most
importantly, they wouldn’t have used a registration service that
demanded payment with a credit card, which is how the registration
service selected does it. You can’t fake a credit card. It was
their only slip-up, and one we would have ordinarily
missed.”

Griffen smiled. “Ahhhh. I get it. You
work upstream through the registrar. Have you got a
name?”

Glen shook his head. “Not yet. The
registrar’s in Germany, and we’ve got one of our correspondents
over there working that angle. It’ll be a few days but we should be
able to get it. May cost a few bucks. I figured you’d have no
objections.”

“Gotta spend money to make money,”
Griffen conceded.

“Precisely. We also contacted our
person at the message board service and were able to secure an IP
address for the poster who’s the site creator, but unfortunately
it’s a cable company IP, so there’s an additional level of
diligence required to get individual account info. That probably
isn’t possible, but we’re working it as well. So far Germany looks
best.”

“What can we do once we know who this
is? Can we get the site shut down? Can we sue him for
libel?”

Glen looked at the ceiling. “I’m going
to say this very carefully. In my opinion, there’s little to be
gained by suing the person responsible for this inconvenience; I
don’t see it as being worthwhile or ultimately successful.” Glen
returned his gaze to Griffen. “As an officer of the court, I can’t
condone you taking matters into your own hands or doing anything
rash. Can I presume you won’t do anything untoward if we discover
the creator’s identity?”

“Of course not. You have my complete
assurance…”

Glen held back a smile. “I anticipated
your response and instructed the German firm to contact you if
they’re productive in their endeavors. How’s the
Shiraz?”

Griffen considered the wine. “Beautiful
finish. I think we understand each other, Glen.”

After lunch, Griffen returned to his
office to find that a two million dollar profit-making session had
turned into a net one million dollar loss on Allied.

They’d tried some more runs at it later
in the session but once the momentum was broken on the day’s swings
they’d sold their remaining trading shares at a loss. Not a good
day. As he closed his office for the evening, Griffen had one
thought at the forefront of his attention.

The site was screwing up his ability to
make money and needed to get taken off the air, and
quickly.

* * * *

Steven had come to New York after
discovering that Griffen was going to speak at a fund-raising
dinner for the Vice President. On Saturday afternoon, Steven
checked into his hotel at 51
^st
and Lexington. After
getting situated in his room, he went down to the business center,
got online, and broke the site address to his Group. He was roundly
chided for the amateurish job on the interface, not to mention the
technical glitches. Several of the gang found typos and grammatical
errors, and one hacked his computer while he was online and
momentarily superimposed a baboon flashing his bulbous bottom on
one of the pages.

One of the more cynical regulars
suggested that he could get a photo of Griffen for the site, as he
lived in New York and ‘knew some people’. Steven responded that it
would be a hoot.

The site was now up to 4,700 hits, so
people were visiting it. The message board dissemination campaign
had been more effective than he could have hoped for. Word was
spreading, the collusion gathering more exposure, the boards full
of talk of filing SEC complaints referencing Allied's suspicious
trading – and apparently some money guys were coming into the stock
on the short side. Whether any of this related to the website was
anyone’s guess. But still, it was positive.

Finished with the internet, Steven
returned to his room and donned a light summer suit for the dinner.
He’d shelled out two thousand dollars to sit at Griffen’s table
because it appealed to him to sit within twenty feet of his
adversary without Griffen ever knowing who he was. He wanted to get
a feeling for the man – up close and personal – look his enemy in
the eyes and take his measure; and he’d flown a long way to do just
that…

Steven enjoyed the caress of the balmy,
blustery evening as he walked the few blocks to the event. He
admired the baroque interior of the overblown hotel lobby before
making his way to the large banquet room. At the door, security
went over him with a portable metal detector before allowing him to
enter the room and pick up his reservation. Griffen was scheduled
to deliver a speech about the importance of free enterprise in the
market system, which Steven supposed could loosely be translated as
‘why no one should ever regulate me’. He was genuinely interested
in seeing the great man make his presentation.

Seated at a large round table, along
with twenty or so other well-to-do men and women, he chatted with
the older fellow on his right, who worked in real estate in
Connecticut. Steven had decided to pose as the owner of a software
company from Washington, in town for the week, and having taken the
seat in place of a friend who’d become ill at the last minute.
Nobody seemed particularly interested in discussing his background,
which was just as well.

Griffen entered at precisely seven
o’clock, the start time for the function, shaking hands and
greeting people all the way to his table. He seemed to know many of
the attendees, which wasn’t surprising since he and one of the Fed
governors were the event’s main draws. It reminded Steven of a
celebrity high-fiving audience members at a concert. Griffen was
clearly a star.

The filet turned out to be outstanding,
the wine pretty good, and the speeches tedious and predictable.
Griffen’s seat was on the far side of the table so the opportunity
to interact was limited and Steven felt disappointed his target was
out of reach for discourse. After the entree, as he’d listened to
Griffen’s self-righteous presentation about the importance of
keeping the markets as unregulated as possible, he’d grown
increasingly angry at the man – and the situation before
him.

Some of his anger could be attributed
to the wine, which reduced his tolerance for bullshit in general,
but the biggest irritant was the knowledge that this weasel enjoyed
a position of prominence and prestige even as he cheated Joe
Sixpack out of his retirement money. He thought about the
shareholders who’d lost their life savings on Griffen’s pump and
dumps, and had to bite his cheek to sit still.

Steven’s mood had upgraded to
belligerent by the end of Griffen’s speech, and built up a full
head of steam while he’d watched his hard-nosed target pontificate
on free markets from his bully pulpit – even as he orchestrated a
criminal conspiracy.

After the coffee was served, a
gentleman in a tuxedo circulated with a humidor. Steven watched
Griffen select a cigar. He did the same, and followed Griffen out
to the veranda which was designated as a smoking area.

Steven waited until Griffen finished
lighting his cigar before approaching him to ask for a light.
Griffen obliged.

“That was quite a presentation,” Steven
said.

“Thanks.” Griffen was obviously not
interested in chitchat with some peon. Steven forged ahead anyway,
figuring this would be his only opportunity to annoy the man in
person.

“I especially enjoyed the part where
you defended the actions of big money pools as being helpful in
maintaining necessary liquidity in the market,” Steven recalled
innocently. “It made pumping and short selling seem almost like
doing the Lord’s work.”