“Why are you so sure?” Tommy asked.
“Other than you guys, they are the only other decent-size presence in the market. They don’t want to let the big Wall Street firms or anyone else come in over the top of them. I could be wrong. Hell, it doesn’t matter.
We just need to get a few buyers salivating.”
“First things first,” Tommy said.
“Right, diligence. So, are you okay with me spending the next few days with George?”
“Yep. Let’s meet here on Thursday morning,” Tommy suggested.
Jeremy moved urgently toward George’s office. Tommy looked at his schedule for Tuesday and Wednesday and figured he could use some downtime before reconnecting with Jeremy; maybe put in a couple of half days. He called Susan.
“Hey, what are you up to tonight?” Tommy asked.
“Hey, how are you? We haven’t spoken in a week. Maybe some pleasantries are in order before you call me out of nowhere just to hook up,” Susan snarled.
“Sorry. I didn’t say anything about a hookup. I just miss you,” he said.
“That’s good. I miss you, too, but not tonight. If you want to meet at your place tomorrow night, I’ll come by after work. Leaving for court.
Gotta run. See you tomorrow,” Susan said.
Tommy took Tuesday afternoon off, cleaned his place, got some lasagna from a local Italian place, shoved it into the oven, then buried the boxes in the bottom of his garbage. He tossed a salad and set the table. The place and the food looked like he had made far more effort than the reality.
Susan had caught the security door downstairs as someone was leaving, scurried up the stairs, and knocked eagerly on Tommy’s door. She walked in without waiting for an answer knowing it would be unlocked; it was Tommy’s way of welcoming her without providing a key. Tommy turned from opening a bottle of wine and noticed that she had changed from her work attire into skin-tight jeans, high heels, and a blousy top that could have hid a slightly-bulging tummy, but there wasn’t one to hide. He wondered why she didn’t want to be with someone more her physical equal and her age. In his eyes, and in most, she was stunning.
“Thought I might find you in your boxers again,” Susan said.
“No chance after our phone call,” Tommy replied, looking down toward his shoes.
“Smart man. Can I have some wine?” she waltzed towards him, cozying up around his waist.
“Absolutely.” He was suddenly a bit uncomfortable, and tried to make small talk. “What’s new?” he asked.
“Your partner has been in our office a couple of times in the last few days with some woman.”
“What was John doing there?” Tommy asked.
“I thought maybe you knew,” she replied.
“Your firm can’t be representing him, right?”
“No way we could represent him since we have the honor and privilege of being your counsel. Plus, we have to run everything through the software to check for conflicts.”
“You’re sure?” Tommy asked.
“I’m sure that we didn’t represent John, so I’m almost as sure we represent the woman,” Susan confirmed.
“How do you know?” Tommy kept pushing.
“You sure are nosey, almost paranoid.”
“I need to be paranoid about people I’m in business with,” Tommy said. “Okay, I know because John was there with the same attorney that represented him in setting up your business, plus my boss, Sam Meyers was involved. For Sam to be there it must have been one of our heavy-hitting clients. Otherwise, he doesn’t come out of his office too often.
Some attractive older woman in a red dress.”
“Okay, I’ll let it go then,” Tommy said. “But keep an eye open for him. For me, please?”
Now Susan changed the subject. “Anything new with you?”
“Not really,” Tommy responded. They sat at the table and talked, split a bottle and a half of wine, and waited for the lasagna to finish baking.
When Susan got up to check on the lasagna, Tommy followed her into the kitchen. He gently rested his hands on her hips as she stood in front of the oven, having just closed its door. She did not turn to him, but instead, stared ahead and unbuttoned her blouse. Tommy pulled the blouse off her shoulders, unhooked her bra, and let both fall to the floor.
He reached around her thin body and cupped her breasts in his hands and kissed a spot on the side of her neck that he knew pleased her.
Susan unbuckled and snaked out of her own jeans while Tommy stripped off all his own clothes. She turned, and they faced each other.
Desire increasing, they kissed passionately. The physical attraction was definitely there for both, and Tommy focused on a primal energy he felt well up in his body. Suddenly, without any suggestion from Tommy, Susan turned away from him again, put her hands near the corners of the oven, and bent slightly at the waist, offering herself, enticing him.
Something had changed about her. Tommy could sense it. There was a submissiveness that aroused him further. Roughly, Tommy entered her from behind. Both gasped and moaned with the immediacy of his thrust, and Susan arched her back to accommodate his need. With one hand on her shoulder, and the other on her hip, he looked down at the tattoo across her back. Seeing “cease what you want” this time further excited him instead of being intimidating. All of his focus centered on the release. Susan writhed and he pushed her harder onto the oven, controlling her, pinning her to its surface. In that instant he knew that she wanted and needed more from him than the physical pleasure that he could provide. Tommy surrounded her from behind with his arms, both spent.
The wine and stove had warmed them from inside out. They turned back to each other, kissed and embraced. Somewhat awkwardly, they put on their clothes and returned to the dining room to enjoy dinner and each other’s company. Tommy really did like spending time with Susan.
The only thing missing was love.
Susan enjoyed the rest of the evening, too, but the rawness and aggressiveness of the sexual encounter had her feeling more used than loved. Susan lay awake half the night in Tommy's bed, frustrated with herself. She didn’t need to or want to fall in love with Tommy, but it was happening. Somehow she could see all of his faults from the moment they met, the perfect match for her in that they would never be a match.
These feelings were not supposed to happen. The next morning, Susan and Tommy had breakfast together before Susan headed off to work, but the enjoyment of the evening had disappeared as both were starting to further grasp the reality of their situation. Susan ate quickly, pecked Tommy on the cheek, and headed out to work as soon as she could.
Tommy took the entire day off since he felt like he was in limbo waiting for Jeremy to finish his diligence but he was back in the office early Thursday morning checking email and ready to go before Jeremy arrived. When he entered, Tommy immediately noticed that Jeremy’s typically urgent walk was replaced by a slow shuffle.
“What’s wrong?” Tommy asked.
“Lots. Glad you’re sitting down,” Jeremy responded.
7
Things had gone along pretty smoothly for Tommy and John. People who knew them both continued to think they were too different to work together and that the relationship and the company were destined for failure. However, each saw in the other their own weaknesses buffered, not an alliance of people too different to make the business work. The environmentalist and the capitalist, the pragmatist and the innovator; they needed each other, and they were making it work. Their attitude was “fuck the skeptics;” there was too much money to be made to have things not work.
Additionally, both men were focused on growth and the competition, particularly with McKinstry, the only carbon trading firm nearly as large as theirs. McKinstry controlled about a quarter of the market and Carbon Traders a bit more. Each firm was equally fixated on beating the other. Carbon Traders was the small startup that got most of the environmental business and a good share from utilities. McKinstry drew on the utilit
y market, too, but courted commodities firms and others looking to exploit a new market. Carbon Traders, the little startup, good guys fighting the big brokerage houses—at least that’s how they played it up in the media.
All of the attention, all of the angst, all of the hassles felt like they hung in the balance, waiting for Jeremy to say whatever it was that made him look sick. “So, I followed your trades through from Environmental Verifications to Carbon Traders all day Tuesday. Everything checked out great,” Jeremy confirmed.
Tommy relaxed slightly and said, “Of course they did. I told you we were meticulous.”
“However, on Wednesday I worked backwards by randomly selecting approved offsets coming back to Carbon Traders from the exchanges.”
“Isn’t that like doing the same thing?” Tommy asked.
“No, because the data coming back from the exchanges had more projects than you submitted. There were falsified projects that you have been taking credit for and either selling them into the market or pulling them into your inventory,” Jeremy explained.
“That can’t be.” The agitation in Tommy’s voice was palpable.
“George confirmed what I found,” Jeremy stated, and as if he was cued, George walked in.
Given the circumstances, Tommy thought he looked oddly calm.
George had apparently waited in the hall for Jeremy to deliver the bad news rather than tell Tommy himself.
“George, does this mean what I think it means?” Tommy asked.
“If you think it means the business is completely screwed, then yes.”
George said, staring at Tommy, trying to soak in his every reaction.
Jeremy started to gather his papers as he spoke with authority. “I will be issuing a press release this afternoon acknowledging that I had considered joining your board, but passed on the opportunity. It will be completely ignored by the public as it’s inconsequential today, but it will make sense and cover my ass when this shit hits the fan. Good luck, gentlemen.”
With that, Jeremy strode out the door without even a backwards glance. The EuroBank guy had a simultaneous and similar conversation with John since Jeremy had tipped him off regarding the mess that was uncovered.
Tommy slumped into a chair in the conference room that had, for nearly two years, been a place to report on their business success. Feeling despondent, he noticed that George now looked nervous. George whispered, “What the hell are you going to do?”
“We are going to get John in here and all the goddamn VPs and figure out what the hell happened. We are locking this place down for the next forty-eight hours. No new volume on the market, only secondary market trading to make sure things stay stable for now.”
It took until early afternoon to get everyone together with all of their printouts, computer files, and other ammunition. Environmental Verifications people lined one side of the table, Carbon Traders on the other. Five people stood at the ends of the table; George, Tommy and their CFO on one end, John and his CFO on the other. Battle lines were drawn.
Tommy, glaring across the table, started. “We all know how this is supposed to work. Every day there is a single download of verified credits sent to one of the carbon exchanges. One file, every day, new credits. All are cross-referenced with past volumes to make sure that projects aren’t resubmitted.”
Everyone nodded their heads. No one spoke.
The VPs of the Information Systems group from each company rose in unison. It was apparent that they had decided ahead of time who would deliver the news. With a beard that looked like tufts of bison hair, the newly balding, slightly round, somewhat soft, and pasty skinned gentleman from Environmental Verifications spoke. “It appears that the file that Environmental Verifications sends isn’t the same one that the exchange receives.”
He stopped to let that sink in before proceeding to the obvious next question, as if it had already been asked. “There is a sophisticated web service data transfer where our original file goes over a firewall between our servers and the exchanges for data security reasons. It seems that each night during the process the file somehow gets automatically expanded to show more projects. It has all the good trades and data, along with projects that seem to be made up. Clearly the firewall must somehow trigger the appearance of the falsified data.”
In an instant, everyone in the room who thought that they were going to be millionaires with their stock options were now thinking about their resumes.
“How?! What?!” Tommy furiously spat.
“This is a goddamn outrage!” John thundered. “I’ll make sure at least one son of a bitch in this room goes to jail for this!”
Tommy was shaking. He couldn’t help but figure it was John. John was probably thinking the same thing about Tommy. It couldn’t be George, Tommy thought. Well, technically it could. No one was above suspicion. Maybe either of the CFOs? Hell, none of it made sense since they would all benefit from the business being successful. There was only one thing for sure . . . there was a hell of a computer genius behind this.
John spoke next. “How come no one on the exchanges caught this? They were signing off on fictitious projects. This is their fault.”
“They were really busy,” Tommy said. “Probably just happy with the volume, and they trusted us. Plus, do you really think they are going to blame themselves?” It was a rhetorical question, and Tommy had the next steps formulated, so he continued to speak. “The information system guys need to figure out who wrote the code to substitute in the bad information. Let’s work in pairs, one from each company. Report to me and John every two hours. Nobody talks to anyone outside the company until we can figure this out. None of you should even leave the goddamn building.” The room emptied in a matter of seconds. As usual, George, Tommy and John were left, but this time with their CFOs.
“Good idea. Find the computer guy and have him lead us to whomever is behind this mess.” John, the powerful, seemingly invincible mastermind, was obviously rattled, and he looked at Tommy.
“Don’t you think that person is in this room?” Tommy stared at John somewhat accusingly.
“Well, it’s not me, you son of a bitch!” John shouted at Tommy, furious now. They both looked at George.
George put up his hands as if to wave off any blame and said, “Don’t look at me. My one percent is down the tubes.”
By now, John and Tommy were being held back, more figuratively than literally, by one of George’s bony hands on each of their chests.
He almost looked amused, knowing it probably wouldn’t escalate and pleased that these two were turning on each other.
They both stepped back, turned in frustration, and retreated to their offices to wait for the next update. During that time the impact of the business collapse washed over Tommy in waves. Regardless of how they would try to spin this, his money and reputation could be completely wiped out. John would still have plenty of money. George could get another job, just like the rest. But Tommy knew that was going to be the biggest loser. Two hours to start pitying himself. It went by quickly as he looked up to see others heading to the conference room.
The slightly bald, heavy, soft and white head of the IT department again spoke. “We don’t know much more than before, except the falsified data is pretty good—random real businesses with building sizes and projects that make sense. Someone was pulling data from real estate tax records, business directories, and many other sources. Somehow the lines of code were hidden when the file was opened to do the double check. Only good data showed when opened by the QA/QC people on our end. Then, when it gets shipped to the exchanges routing through the firewall, it must trigger the appearance of all the false submittals along with the real ones. This has only been going on for the last six months, but that is when we did a majority of our volume and it looks like about a quarter of that is fraudulent. The exchanges probably saw and checked all those good credits for the first year and a half and just got lazy. Never seen anything like it. Very impressive.”
John spoke up, sarcastically. “So, you falling in love with this guy, or can you find him?”
“We have consultants coming in. I’m sure there’ll be dead-ends, but we think we can find him, or her, inside a week.”
This time, Tommy spoke. “Oh my god. Twenty-five percent. We don’t have a week. Find him in two days. Financial teams, how did you miss the disconnect between revenue and project volume?”
Carbon Traders’ CFO explained, “We had checked historically but changed our policies about six months ago because everything always matched. We asked the exchanges just to flag anything they didn’t approve and figured that would save a lot of time. Plus, with so much of it staying in inventory, I guess that no one ever did the math. Of course, any of us could have caught it.” Tommy almost lashed out at the guy not taking responsibility, but Tommy knew he was right, so he moved on.
“I assume the PR groups have already been working on this. We are not losing this company. What do you guys have?”
“How about a plan in two hours?” a voice from the Environmental Verifications’ side of the table said.
“Fine,” Tommy huffed, and everyone scurried out. It was now after market closing time with all appearing normal. Tommy walked out of the building to get some air and paused to really think for the first time about how to save the business, not lose it. He knew they had less than a week to fix this mess or they would be out of business. Maybe knowing who was benefitting from the market trading activity would help. He called his market desk from his cell phone and asked that Jack, the group supervisor, run a report on all large trade activity for the last six months and have it on his desk as soon as possible. Tommy walked over and over in a two-block circle, grinding through scenarios and ideas, but headed back for the evening update with very little to show for his effort.
“What’s the plan?” Tommy asked the room. Everyone knew he meant the PR plan and those VPs stood up. The intensity and immediacy of the moment intimidated them.
The Squeeze Page 4