Harry was worried about his upcoming phone call to Kaspar.
Now I have two issues to discuss with him, he thought: the Sierra Health disaster and the disappearance of Julie Monroe.
He wasn’t sure how to approach this. Kaspar had lately become even more mercurial and difficult to read. Early in his career, Harry was able to implement the strategies that Kaspar wanted, almost before Kaspar had even stated them. This had contributed significantly to his success at the firm. Harry hoped that his good fortune would continue, but he was realistic enough to know that the money management world was a cutthroat one. He liked his peers and considered them to be friends. But Harry knew they were like wolves in a pack, and he was the alpha male. As such, his colleagues were watching for any weakness on his part to seize the opportunity to pounce and assume his role in the organization. Harry had seen it happen regularly as he rose through the ranks. He expected nothing less to happen to him if he wasn’t careful.
He took a deep breath and pressed ‘7’ for Kaspar’s number. He had him on speed dial since they talked so frequently during non-business hours. As the phone rang, Harry imagined Kaspar padding across his huge family room in a pink bathrobe and bunny slippers. Not likely, but a sight that Harry would like to see. He chuckled softly.
“Hello Harry,” Kaspar grunted. “I’ve been waiting for you to call. What the hell is this I hear about Monroe?”
“I just heard about it myself, Kaspar,” Harry replied, silently cursing Sinead for not telling him she had called Kaspar already. “I will call her husband later to see if I can learn more or offer some assistance.”
“You do that,” Kaspar said dismissively. “Now what’s happening with Sierra Health? What did Stern have to say?”
Harry wondered how many details to give Jordano. Stern hadn’t been very encouraging about being able to cover the Sierra Health mess with administrative dollar shuffling, but Harry didn’t want to tell Kaspar this news just yet. Stern needed some additional time to come up with a viable solution. Besides, he knew from past experience that Kaspar loved to have deniability in these kinds of situations. If he could claim with some truth that his subordinates had kept him in the dark, then he had a better chance to maintain his standing with the trustees. Harry knew that appearances were more important than accountability, at least to Kaspar.
“Stern said he would need a few days to determine the best course of action. He seemed confident that he will be able to come up with an appropriate solution.” Harry gulped silently, hoping that Kaspar would buy this for now. He heard Jeremy stirring upstairs in his bedroom, and he wanted to finish the call before his son came downstairs. Jeremy could be very loud.
“Well, he’d better be able to fix this mess. I want this issue to have no impact to the firm’s earnings this quarter, do you hear me?”
Harry understood Kaspar’s real objective: his boss wanted no impact on his annual bonus, which would be announced in January. Kaspar’s bonus last year had been six million dollars. But since Harry couldn’t say what was on his mind, he tried to finish the call with a positive spin.
“Stern is the best. I’m confident he’ll meet your expectations.” He almost gagged from his subservient tone.
“We’ll see,” Kaspar growled. “I want a report by end of day Monday outlining how this will be dealt with.” With that, he was gone. Harry breathed a sigh of relief. He had two more days to think about how to handle Kaspar. Harry’s income wasn’t on Kaspar’s level; he sometimes wished he had banked a little more of his annual bonus. Regardless, he was a little tired of the rat race. And he was especially tired of being the rat.
Chapter 5
Monday, October 20
Monday morning flew by. The market was in one of its volatile periods, and meetings with the fund analysts kept Harry busy throughout the morning. The team decided to sell three stocks in their large cap portfolio, and buy two others to replace them. Harry tried to reach Stern when he got a brief break around noon, but he was in a meeting.
At 2pm, Harry took the elevator up to the seventh floor to meet with the Finance chief. When he arrived at the conference room, Harry was dismayed to see that Rachel Sullivan, the head of Corporate Audit, was sitting at one end of the table. This didn’t bode well for keeping the Sierra Health mess quiet.
Next to Rachel was Jackson Andrews, the managing director of Marketing. Jordano Funds sold its funds through brokers, not directly to the public like Fidelity and Vanguard. The firm depended on excellent relationships with brokerage firms, because those firms had direct contact with the buying public. Andrews was extremely sensitive to any news that might upset the investors. Harry thought he was a pompous ass.
Kevin Jacobs, Jordano’s head of Operations, sat on Rachel’s right. His ebullient demeanor was missing today. It was his staff that had screwed up, and he knew that the shit was heading his way. He’d been with Jordano since the early days. Harry knew that Jacobs might need his long history with the firm to save his job.
Just after Harry greeted those in the room, the door opened. Tom Stern, the company’s Chief Financial Officer, walked in. Behind him was Nora Lincoln, the firm’s new Director of External Compliance. She’d been with the company for just six months. Her short blond hair framed a face that held almond-shaped brown eyes and full lips. Her nose was just a little crooked, broken at the age of twelve when her tennis partner had wildly swung her racket, catching Nora with her follow through. Harry had gotten these details when they’d all gone out for drinks two weeks earlier to celebrate staff promotions. He and Nora had spent a pleasant hour chatting over the scallop and bacon hor d’oeurves. Harry sensed that she was interested in getting to know him better. He felt the same way about her.
“Good afternoon, everyone,” Stern said. He cleared his throat. “Thanks for coming. We have a mess on our hands. I’m sure there’s a lot of interest in coming up with a solution that will be suitable to all.”
“I second that sentiment. I need to report to Kaspar at the end of the day with our strategy for minimizing impact to the firm,” Harry stated. He caught Nora’s eye and smiled briefly. She smiled back. Nora was wearing a tight skirt and white blouse that hid a figure that Harry thought was aching to get out.
“The problem, Harry,” Stern started, “as I mentioned to you on Friday, is the size of the transaction error that needs to be fixed. Three-point-four million dollars is not an easy amount to absorb or make disappear.”
“Maybe so, but if this catastrophe becomes public, we can expect another increase in redemptions,” blustered Jackson Andrews. His bulbous nose seemed to have grown a new shade of red since the start of the meeting. “Investors are still very sensitive to anything that smacks of dishonesty or incompetence. They will pull their money out at the slightest provocation. And the money won’t come back. As you all well know, our earnings come from fees on fund asset levels, and any event that causes assets to decline is a great, great concern.” He stared at Jacobs as he said this. Jacobs seemed to wither in his chair and looked like he wished to be anywhere but there.
“So Tom,” Harry began, “have you been able to come up with a solution?” He almost said “devise a solution,” but that sounded a little sinister. Harry wanted to avoid that connotation.
“I believe we can cover about half of the shortfall with internal funds by borrowing money from some budget accounts that I keep for emergencies such as this one. But that will only account for $1.8 million of the $3.4 million total. That leaves $1.6 million unaccounted for. The remaining money will need to be made up some other way.”
Stern left it unstated, but everyone at the table knew what he meant. At a minimum, acts that constituted unethical conduct; at a maximum, fraud and conspiracy to commit fraud. The punishment would likely include fines and expulsion from the industry. Maybe even jail time.
Harry looked around the room. It was clear no one wanted to be the next to speak. It seemed whoever did would set the group on a course of action that migh
t have no easy return or recourse. Everyone was measuring their own willingness to go forward.
Kevin Jacobs cleared his throat. “I have a possible solution. We could make some adjustments with as-of transactions. This approach would reduce the firm’s exposure from last Thursday’s error. An as-of trade allows a price from a different day to be applied to the transactions. There are many valid reasons for a transaction to be processed as-of another date – sometimes operations can’t finish the volume of daily work, or maybe mistakes need to be corrected. By applying as-of transactions using last Friday’s trade date,” Jacobs continued, “we can assess the discrepancy to many other accounts. This will reduce the overall exposure to the fund. These accounts will look like they bought shares on Friday, the day of the price spike, rather than the day before. This will spread the error across many accounts and will allow for recovery of the remaining funds.”
“Doesn’t that harm the shareholders who own these accounts?” Nora asked. Harry knew Nora was the least experienced person at the table - prior to coming to Jordano, she had worked in compliance for Bank of America in New York. Her knowledge of fund accounting was minimal.
“Yes, but if we spread the adjustment across enough accounts, the impact to any one shareholder will be minimal. No one needs to be the wiser,” Jackson Andrews commented condescendingly. “And it will be the perfect way to minimize the public fallout.”
Everyone at the table looked towards Harry. It was clear he was going to need to be the decision maker. He glanced around the room. He realized that if he recommended this step, he would be saving Kaspar from additional embarrassment as well. That wouldn’t be a bad thing and Kaspar might even appreciate it.
“Let’s do it,” he said. “Kevin, pull together a list of accounts that we can adjust. Keep the adjustment under $1,000 per account. That will help to minimize the impact on each shareholder. It means we will have to adjust about 1,600 accounts to make up the $1.6 million. It’s critical that we finish all of the adjustments by the end of the month. Will that be possible?”
Jacobs nodded his head. The others at the table looked relieved that a solution was at hand. Everyone started to file out. As Nora passed by, Harry called out to her.
“Nora, can you stay a second?” She paused as the others left. Once the door had shut, Harry asked, “I was wondering if you would like to go to lunch later this week?” He was surprised at the nervous flutter in his stomach.
“That sounds great,” Nora replied excitedly. “I heard about this new sushi restaurant near the harbor that I’ve been dying to try.”
“Sushi, huh?” Harry replied, rolling his eyes. His idea of lunch involved a good Porterhouse. And an imported beer to wash it down.
“Oh come on,” Nora replied, lightly touching his forearm. “I’ve heard a rumor that you aren’t too adventurous. It’s time to broaden your horizons.”
Harry relented. “Alright, you’re on. Sushi it is. How about Thursday?” The touch of Nora’s fingers had sent a slight chill along Harry’s spine. He wondered how she had learned about his mundane eating habits. Actually, he didn’t care -.he was pleased she was interested enough to ask someone about him.
“Can you go on Wednesday instead? I really think you’ll like this place.” Her eyes were wide with excitement.
Harry realized that Nora’s eyes weren’t really brown, but were hazel instead. “I might have to juggle my schedule a little, but I think I can do Wednesday.”
“That’s great! It’s a date.”
“Yes, a date.”
Oh boy, Harry thought to himself.
Chapter 6
Monday, October 20
It was still dark when Nick laced up his Nikes and stepped outside. He checked his watch: 5:30am. The street was quiet as he left his Marine Road home. The salty air carried by the breeze blowing in from Boston Harbor assaulted his tongue and made him spit. Nick glanced back at the dark house, which had been his for the past three years since his mother passed away. He double-checked his front door, making sure it had closed. The sea air often made it swell and stick a bit.
Exhausted from a near sleepless night, Nick jogged slowly at first, crossing Day Boulevard to the other side of the street. He passed the yacht club, where boats pulled from the water in preparation for winter storage lined the yard. Their shadows created dark crevices that the nascent dawn couldn’t penetrate. Nick looked ahead to the open water in the distance. The mid-October day was forecasted to be crisp and clear. First light was visible in the eastern sky, and it cast a milky sheen across the ocean waves that vacillated like sheets in the breeze. Tendrils of fog rose like apparitions as the cold air moved over the warmer water.
Nick turned right as he approached the rocky promontory that reached out a quarter mile into the harbor. He thought of Ellie, as he did each morning. Running together had been their thing, before Emma was born. He missed it so much. They had run many 5Ks, several 10Ks, and were working their way up to a half marathon when Ellie snuggled up to him one night and told him that from then on three would be running, not two. Nick was thrilled with the news. He watched the ground ahead of his feet as they pounded the concrete. He knew he ran ugly. Ellie’s strides had been smooth and effortless, a buttery glide in comparison to his lumbering gait. He always felt that he looked better when she was running next to him.
Today was the second anniversary of Ellie’s death. And Emma’s, his daughter.
Nick quickened his pace as he jogged toward the end of the path. In the distance, he could see the outline of the Sugar Bowl, a circular, concrete, covered bench that provided panoramic views of the water and the harbor islands. It was a favorite summertime spot where cooling breezes provided a brief respite from steaming city streets on humid nights. On this chilly morning, however, only several dirty seagulls resided there, perched on the concrete roof, their feathers ruffled by the light ocean breeze.
In the distance, Nick watched the beacon from the Hull Lighthouse rotate across the harbor, illuminating sea and sky together, as it had done for a hundred years. He glanced at the shoreline, waves slapping against the base of the boulders that lined the path. He tasted the salty spray that splashed above the water. The greasy diesel fumes of a tugboat preparing to leave the dock behind Kelly’s Landing assaulted his nose. He caught a glimpse of a fat rat scampering between the rocks, its long tail following like a headless snake in the throes of a death shudder. A shiver ran down his spine.
He remembered telling Ellie that autumn was his favorite time of year to run. The weather wasn’t too cold if the wind wasn’t blowing. It really made him feel alive. Nick’s feet pounded the wet asphalt, and the swish of his windbreaker made a soft melody as he pumped his arms.
Remember walking to the Sugar Bowl with Emma on warm evenings? Ellie would say when it was too cold to venture outside. She was so happy. Emma laughed at the birds, and pointed her stubby, chubby fingers at the ocean, and gurgled when the sun was on her face. Those were happy days, Nick.
Nick remembered. He would never forget. He wouldn’t let himself. He tried to focus on the pounding of his feet.
He turned to the left to cross the foot bridge that spanned the locks between Pleasure Bay and the open ocean. Castle Island was straight ahead on the other side of the bay. He could just make out the outline of Fort Independence, a hulk in the darkness against the brightening sky. The fort’s foreboding granite walls must have once seemed like a barrier to some and protector to others, depending on whether you were inside the fort or not.
Emma would be four now, almost five. She would be learning her numbers, starting to read a bit. That would have been so much fun. Ellie’s voice had taken on a plaintive tone.
Nick steeled himself for the pangs of hurt that pierced his insides whenever he thought about what might have been. Under his breath he muttered, “I know. She was so smart. Just like you.”
She would have amazed both of us.
Nick felt his eyes get wet. He wasn’t sure if it wa
s caused by the wind in his face or the memories that Ellie’s sentiment had evoked.
The tide was going out as he approached the locks that separated the lagoon from the open ocean. The bay water rushed through the narrow opening with anxious abandon, seeming keen to return to the anonymity of the sea. A solitary fisherman appeared like a lonely sentinel atop the bridge, his fishing line cast deep in the water, seeking the first catch of the day. Nick nodded good morning as he passed. The fisherman nodded back, his whiskered face lit softly by the cigarette dangling from the corner of his mouth.
That fisherman reminds me of your Dad, Nick. I remember before he got really sick, how he would be smoking in bed early in the morning whenever we visited your parents. I could see the embers as he puffed away when I passed his bedroom on my way to the bathroom. I don’t know how your mum put up with it for so many years. She was a saint.
Nick recalled those visits to his parents’ home, the same house he lived in now, with mixed emotions. The diagnosis of his father’s lung cancer had not surprised anyone, given the two pack-a-day habit that he’d maintained for forty years, despite entreaties from his family to quit or at least cut back. His father was adamant about his right to smoke anywhere, even on the subway trains. His father didn’t care. It gave him a short-term measure of control over a sad and disappointing life. Nick and Ellie had visited as much as they could during that final year.
Nick ran across the parking lot in front of Sullivan’s and headed down the east side of Pleasure Bay. He had just passed the midpoint of his run, so he tried to pick up the pace. He felt Ellie’s presence next to him, her lithe form matching him stride for stride. He had never said much during their runs. Ellie always directed the conversation. Their life together. Their love for Emma. Nick’s work, which she considered to be so important. About how lucky they were.
Shell Game Page 3