Friends on the Piedmont board had opened the door for Ainsley, and his disarming personality- and the sizable chunk of Piedmont shares that he purchased- secured his position as CEO. But Ainsley had more than just charm and money to recommend him; he actually had an idea- a vision of Piedmont’s future.
Ainsley saw that Piedmont’s marketplace was badly fragmented, with many small suppliers and no dominant player. He recognized that the market was ripe for consolidation and that, with the right financing, Piedmont could grow by acquiring its competitors, moving their clients to Piedmont’s products, and squeezing out costs. And there was another, more radical, aspect to his plan. Ainsley understood the growing reach of the Internet and saw in it an opportunity for Piedmont to transform itself- to become a provider not of billing software but of billing services. He saw, in short, an opportunity to get Piedmont out of the software business and into the outsourcing game. This was what had caught Gregory Danes’s eye.
Three months after Ainsley’s installation as CEO, Danes became the first analyst to cover Piedmont. He was unequivocal in his support for the company’s strategies and beyond bullish on its future value. His declarations attracted more research coverage to Piedmont, and more investors, and the company’s shares jumped.
None of this was lost on Denton Ainsley, who proceeded to cultivate close ties with the analyst and his firm. He invited Danes to speak at several of Piedmont’s lavish corporate retreats, solicited his views on takeover targets, and made him guest of honor at one of his celebrity-laden charity pig roasts. As for Pace-Loyette, Ainsley tapped the firm as Piedmont’s investment banker on all acquisitions and named it lead underwriter on the company’s secondary stock offering. Pace also became Ainsley’s personal banker, extending him hefty loans, collateralized by hefty chunks of ever-more-valuable Piedmont stock.
For a while, while the market climbed, all was well. Piedmont’s growth strategy proceeded apace, subscriptions to its new outsourcing service sold faster than planned, and the company’s stock became a must-have for anyone who wanted to invest in the Internet. Pace-Loyette collected its fat banking fees, Danes’s reputation shone ever brighter- as did his outlook on Piedmont shares- and Denton Ainsley undertook elaborate renovations to his newly purchased Napa Valley chA?teau. And no one paid much heed to talk of accounting irregularities and falsified sales figures at Ainsley’s old company, Dentco, or to questions about Piedmont’s subscriber numbers, or to complaints that its software just plain did not work.
When people did take notice, the unraveling was fast and violent. The SEC announced its inquiry into Dentco one Monday early in the new millennium; the following day came its notice of an inquiry into Piedmont. Wednesday saw a class action suit by a group of Piedmont customers; on Thursday the Justice Department declared its interest in interviewing Piedmont board members. On Friday, the first shareholder lawsuit was filed.
On Saturday, Denton Ainsley’s bright Italian car was fished from a pond on his Napa estate, and Ainsley’s body was fished from the car. Suicide by Ferrari was the unofficial finding of one cop on the scenean opinion bolstered the next day, when the coroner established Ainsley’s astonishing blood-alcohol levels.
The forensic accountants took a bit longer on the autopsy of Piedmont Science, but when they were through their report revealed massive fraud, hidden debt, and systematic looting of the company’s coffers- all orchestrated from the very top. By which time the company had largely decomposed.
Piedmont had little in the way of assets, and its executives and directors relatively shallow pockets, and it wasn’t long before irate customers, investors, and regulators turned their torches and pitchforks on Piedmont’s bankers. At the time, their claims were novel: Pace-Loyette and Gregory Danes were either fools or criminals, negligent incompetents if they were unaware of Piedmont’s true financial condition, despite extensive dealings with the company, or co-conspirators in Ainsley’s fraud if they knew but didn’t tell. And either way, they were horribly conflicted: Pace’s interest in keeping Piedmont as a client, and in keeping Piedmont’s shares inflated, led it- and Danes- to distort research reports and to mislead investors.
Though they made for fun reading, the allegations were difficult to prove. There was no trail of memos or smirking e-mail to indicate that anyone at Pace-Loyette had known of the fraud, or to suggest that Danes had not believed his own research reports. And there was the fact, besides, that Pace had lost a large pile of dough on its loans to Ainsley. But the absence of a smoking gun hadn’t deterred the lawyers, and it hadn’t saved Gregory Danes’s reputation. Pundits, politicians, and op-ed columnists feasted on the Piedmont affair- and on Danes- for many months, until a host of larger and more garish frauds came along.
The search engines returned links to interviews that Danes had given over the years, and I skimmed through a few of them. There was something almost quaint in his rosy pronouncements- on e-commerce, broadband, data mining, and a dozen other jargon-soaked topics. It was like reading about eight-track tapes or bongs. I read farther down the list of links and stopped at something called LindaObsession. com. I clicked, not knowing what to expect.
It was a disturbing and aptly named site. A page entitled “Our Mission” summed it up:
We are here to appreciate and adore the most beautiful and intelligent and most totally HOT host/reporter/superstar/diva on television today (OR EVER!)- the Amazing, Incredible, Spectacular LINDA SOVITCH! We Are Totally Linda!!!
Linda Sovitch was the blond glossy host of Market Minds, the Business News Network show that offered analysis of the day’s market action and features on investing, the economy, and politics. In recent years, Sovitch had also become the glamorous face of BNN itself. Gregory Danes had been a frequent guest on Market Minds, practically a fixture there since the show’s debut in the late nineties, and this was why LindaObsession had come up in my search.
Along with the fevered deconstruction of Linda Sovitch’s physical charms- the cornflower eyes, the ash-blond hair, the delicate nostrils and bee-stung lips and swelling bosom- and the meticulous parsing of what seemed her every utterance, there were stills and video clips from the Market Minds show. In among these was Gregory Danes.
There was Danes on the show’s premier segment, and when the Dow hit 10,000. There he was when Cisco surpassed GE in market capitalization. And there was Danes on the first anniversary show and on every subsequent one- except for the last few. I clicked on a video clip.
It was fuzzy and jumpy but watchable nonetheless. The topic was the significance of adding Microsoft and Intel to the Dow Jones Industrial Average. Sovitch was smiling and flirty and pitching softballs; Danes was arrogant and preening and knocking the hide off them. But there was a twitchy, adolescent quality about him too, which came through even on the murky video- like the class wiseass who’s suddenly found himself captain of the football team. Even so, his message was simple and clear: It’s a whole new world, and there’s no place to go but up. For sure, Greg.
Most of the references that turned up in my search were several years old, and they were all business. There were no references to him in the social pages, and- apart from Ainsley’s posh barbecue- no reported sightings of him at any of Wall Street’s many charity events. Even the few magazine profiles of him mentioned nothing more personal than his fondness for classical music.
The only exception was a mention of Danes in a 1998 article from a Newark, New Jersey, newspaper. It was a short piece, reporting on an administrative action by the SEC against a tiny Jersey City firm and a broker there named Richard Gilpin, for a slew of violations that seemed to stop just short of outright fraud. Gilpin, the article noted, was the younger brother of “prominent Wall Street analyst Gregory Danes.” The reporter was almost right; according to Nina Sachs, Richard Gilpin was Danes’s creepy half brother. Gilpin was on my list of people to talk to, assuming I could find him, and I took down the details.
I went to the kitchen and warmed my coffee in the microwa
ve and looked out the window as I drank it. The sky was a soft, even gray, and the gulls, wheeling slowly over the building across the street, were nearly lost against it. I had a lot of windows opened, and a small breeze wandered in with the street noise.
I thought about Danes and the traces he had left behind on the Web- his footprints across the big stage of Wall Street- and I thought about the other actors recently brought to heel. I recalled the televised hearings and the faces, pale under their golf-course tans. Some had been annoyed at being called to testify and others had been downright angry, and a few, perhaps, had been something close to scared, but regardless of demeanor they seemed to share a common sense of astonishment that questions had been asked at all.
Thoughts of arrogance and money and Wall Street led me, inevitably, to my family. Money is the family business- on my mother’s side, at least- and it has been ever since my great-grandfather founded the merchant bank of Klein amp; Sons. One of my uncles runs the bank these days, with help from my eldest brother, Ned. My other brother, David, and my older sister, Liz, work there too, along with the rest of my uncles and countless cousins. Not every Klein offspring has gone into banking, though. My baby sister hasn’t, and through the years there’d been heretics who’d wandered off into medicine, law, and academia. But there’d never been a cop or a PI before- not until me.
This was not a source of particular family pride, but I was used to that. By the time I’d found a career- or it had found me- I’d already amassed twenty-two years’ worth of underachievement and unfulfilled expectations. Even now I could hear my mother’s chilly tones: You surprise me, John, only in the particulars of your choices, not in the degree of their foolishness. She’s gone now- both my parents are- but her sentiment lingers like a ghost around my family.
Not that I’d never toed the family line. I had, albeit sporadically. In college, I was a business major for about ten minutes, and for several summers I’d interned on the trading floor of a big broker-dealer. I’d gotten coffee, answered phones, run pricing models, reconfirmed trades, and tended my hangovers there, and I’d listened quietly, over long expensive lunches, while people barely older than I tried to sell me on a future with the firm. It didn’t take. The avarice, egotism, and self-delusion I’d seen there approached caricature, and when the dismay wore off, Wall Street had bored me to tears.
Several times in recent years clients and cases had led me back there and afforded me a darker but more interesting view of the place. In seven years as a cop I’d seen what greed and arrogance could do when they were mixed with desperation and opportunity; that was old news. What was different on Wall Street was the stakes that people played for, the variety of their games, and the particular mix of brains and vanity they brought with them to the table. I took a deep breath and let it out slowly.
I topped off my coffee, found the Pace-Loyette phone directory that Neary had given me, and turned to the listings for Gregory Danes’s department, Equity Research.
Research wasn’t a big group at Pace-Loyette- fewer than thirty analysts in all- but it didn’t need to be. Pace-Loyette wasn’t a big firm, and they didn’t cover every sector of the market; technology was the specialty of the house. Danes’s name appeared at the top of the page, with the title Director of Research. Immediately beneath his name was his assistant’s, Giselle Thomas. Neary had put a check alongside it. Below her, also with a check by her name, was Irene Pratt, Assistant Director of Research. Halfway down the page, another name was marked: Anthony Frye, Telecommunications Research. Leafing through the rest of the directory, I found only one other name with a check beside it: Dennis Turpin. According to the directory, Turpin was head of the legal department- the chief in-house counsel. Turpin, Neary had told me, was the guy who had had the shouting match with Danes, right before Danes’s sudden vacation. I carried my coffee to the table and picked up the phone.
Giselle Thomas answered on the first ring. Her voice was mature and musical and Caribbean. I asked for Danes and there was a little sigh at the other end of the line.
“Who’s calling, please?” I gave her my name. “Mr. Danes isn’t in, Mr. March. Is there someone else? Irene Pratt, maybe?”
“When is the last time Mr. Danes was in, Ms. Thomas?”
She paused. “I need to refer you to Ms. Mayhew, in Corporate Communications, sir.”
“Does she know when you last heard from Mr. Danes? Does she know where you think I might find him?”
Giselle Thomas laughed. It was liquid and pleasant. “Well, Mr. March, I can’t say exactly what Ms. Mayhew knows, but I expect it’s many things. And she’ll be pleased to tell you, I’m sure. Shall I transfer you?”
“I understand the company has its rules, Ms. Thomas, and I appreciate that you’ve got to follow them, but it’s not Ms. Mayhew who can help me, it’s you. You know Mr. Danes. You’ve worked with him forhow long has it been? If you’d rather not talk at the office, I’d be happy to meet you someplace. Just name the spot.”
She laughed some more. “You sound like a nice fellow, Mr. March, you do. And it’s nice that you want to talk to me. But that just isn’t going to happen. Now, would you like me to put you through to Nancy Mayhew?” I declined politely and rang off.
I tried Irene Pratt’s number next, but it was answered immediately by a computer voice that asked me to leave a message. Giselle Thomas had made it sound like Pratt was in the office, so I hung up and waited five minutes and tried again. The result was the same. I skipped down to Anthony Frye.
Frye’s line also went straight to voice mail, but the voice on the recording was a woman’s and the message was brief. Anthony Frye was no longer employed by Pace-Loyette, and any inquiries should be made to Irene Pratt. I made a note to find a home number for him and tried Pratt’s line once more. This time I got through.
“Research, Pratt,” she said quickly. I introduced myself and asked her if she knew how I might get in touch with Gregory Danes.
“And this is in reference to what?” she said. Her voice was high and nasal, and she had a faint Long Island accent. She sounded impatient, and I heard pages turning at her end.
“This is in reference to the fact that I’d like to know where he is.”
“Greg is on leave. If you want to know anything else, you’ve got to talk to Nancy Mayhew in Communications.”
“Have you heard anything from him in the last five weeks, Ms. Pratt? Has anyone there?”
“You’re with who, March?”
“I’m an investigator, and I’m trying to locate Gregory Danes.”
“You’re with the police?” she said. I had her full attention now.
“I’m a private investigator. Have you heard from him, Ms. Pratt?” She was quiet for a while, and when she answered she spoke softly and more slowly.
“I’m sorry, but… I really can’t help you. Let me give you Nancy Mayhew’s number.” She read it to me and said good-bye.
I sighed and worked the kinks from my neck. All roads seemed to lead to Nancy Mayhew. I punched her number.
Nancy Mayhew and I got on first-name terms right away. She was crisp and smart and friendly, and she laughed like an aunt of mine from Oyster Bay. And besides the business about Danes being on leave, she told me not a single thing.
“Did he actually tell someone there that he was going on leave, Nancy?”
“I’m afraid I just can’t say, John.”
“Can’t or won’t?”
She laughed. “I’m sorry, John.”
“Can you say when you last spoke with Danes? Was it any time in the last five weeks?”
She laughed again and didn’t bother with an answer. “Perhaps you can tell me, John- who is it that you’re working for?”
It was my turn to chuckle, after which I hung up.
Through the open windows the breeze had picked up, and there was a bite to it now. Rain was coming. My coffee was cold again, but I drank it anyway and watched some clouds slide by. Three people with nothing to say. I called D
ennis Turpin.
An assistant answered, took my name, and asked me to hold. I didn’t hold long.
“I know who you are, March, and I know what you’ve been up to,” Turpin said, when he came on the line. He had a faint New England accent and an irritated, scolding tone. “You’ve harassed three of my people today with your questions, and we don’t appreciate that around here.”
I was surprised that Turpin knew about my other calls so quickly; Neary was right about Danes having his management spooked. And I was surprised by Turpin’s choice of words. Harassed? I wasn’t even warmed up yet. And my people? That was a rather pompous construction for a mere in-house lawyer.
“I’m not trying to harass anyone. I’d simply like to get in touch with Gregory Danes.”
“And I believe you’ve been told- more than once- that Danes is on leave. But you don’t seem satisfied with that answer.”
“That answer is fine, as far as it goes. It just happens not to go very far. Do you expect Danes back anytime soon? Has anyone there actually spoken to him since he’s been away, or gotten messages from him, or e-mail? How about a postcard?”
Turpin made a puffing noise. “You have no standing,” he snapped. “We’re not obliged to put up with this.” He went silent then, and I got the distinct impression he was counting to ten. He sighed loudly.
“Maybe you want to answer some questions yourself, March- like who you’re working for on this. Maybe we could do a little horse-trading.” Turpin was trying for conciliatory, even friendly, but it came out sounding sneaky. Still, his offer was my best bet for getting into Pace-Loyette, at least for now.
“I need to talk to my client first,” I said.
Turpin snorted. “You do that,” he said, “and you come see me, tomorrow at one- assuming you’ve got something to trade.” He rang off.
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