Free To Trade

CHAPTER 18

The cold dawn air bit into my lungs with every breath. The muscles in my calves twisted and jarred on the stony path. I had forgotten how hard running up steep hills was on them. I was following the route I had run almost every day as a kid. Four miles up the steepest slopes in the area. The top of the hill was only two hundred yards away, but my progress was interminably slow. It felt bad enough now – I wondered at how I managed it as a twelve-year-old.

I recognised each odd-shaped stone, each sudden twist in the path. Recognition brought the pain of those runs flooding back. I had sought it out, looking forward to the daily struggle against the steep paths and the cold wind. It wasn't just a means of driving out that other pain of the loss of my father, although that was how it had started. I had developed a dependence on it, a need to focus my mind and my whole body on overcoming the pain and discomfort. It was a kind of self-indulgence, an opportunity to wrap myself up for an hour or two every day in my own world, which had my body and its aching muscles at its centre and the sometimes glorious, sometimes terrible hillside scenery as its backdrop. Every day a hard fought battle, every day a well-deserved victory.

Eventually I broke the brow of the hill and began the half-mile canter along the ridge between Barthwaite and Helmby. I loped along, dodging the sharper stones and the thicker clumps of heather which lurked along the old sheep-track, waiting to jar a foot or ankle. A brace of grouse darted out of the heather and flew fast and low along the line of the hill, before swooping out of my sight. The mist was just lifting from the valley floor around Barthwaite, and I could see the silver ribbon of the river sparkle in the morning sunshine, before turning sharp left behind the shoulder of a purple hill. I looked behind me at the broad desolate brown and purple expanse of the fell at the head of the dale. But I was running away from that, down towards the neatly parcelled green fields of the valley floor, and the grey stone village, where the first signs of morning activity could be heard; a tractor spluttering to life, dogs barking for their breakfast. I arrived back at my mother's house sore but refreshed, and with a decision taken.

I couldn't hope to change Mablethorpe's mind. Even if I found a way to fight him legally, he would get my mother out in the end. The effect of that on her delicately balanced psychology was incalculable. But perhaps I could buy the cottage. That would provide both me and my mother with the comfort of knowing she had a secure home for the rest of her life.

The trouble was, I couldn't afford fifty thousand pounds. But, with my ten thousand pounds of savings, mostly made up of my Gypsum investment, I could just afford to borrow another twenty, after taking into account the existing mortgage on my flat. How to get the cottage for only thirty thousand pounds?

Swallow my pride and ask him, I supposed. I rang the Hall and made another appointment for later that day. We met in the same study as the day before. I told Mablethorpe my proposition, the cottage for thirty thousand pounds. I regretted my parting comment of the day before, but Mablethorpe was a little more conciliatory; maybe some of my remarks had got through, after all.

'Thirty-five thousand,' he said. 'No less.'

'OK, thirty-five thousand,' I said, and held out my hand. I hoped I would get the finance from somewhere. He shook it limply. I think we were both aware of the strong friendship that had existed between our fathers, and felt ashamed at letting them down. We parted on cool but not cold terms.

My mother was very pleased when I told her. She insisted I stay another couple of days, which I did. After the strain of the last few weeks the enforced idleness and change of scenery did me good. I tried, and broadly succeeded, in banishing concerns about my future at De Jong & Co. Time enough to worry about that. I was less able to free my mind of Cathy. I wondered whether she would like Barthwaite. Idiotic thought! There was no reason on earth why she would ever have cause to consider the question. I kicked myself more than once for somehow screwing up what seemed to have been the start of a very promising relationship.

And then I had to borrow twenty-five thousand pounds from somewhere. It ought to be possible, just. After a year or two in the bond-trading world, my salary should rise quite rapidly, and it should quickly become more affordable. That was as long as nothing came of the TSA investigation.

We were sitting in the De Jong conference room, the same one in which I had been grilled by Mr Berryman from the TSA. On the polished mahogany table was a tape-recorder. On the other side of the table was Hamilton.

When he had rung asking to see me at eleven o'clock on the Monday morning, my fears had been awakened. If I had been cleared by the investigation, then surely I would have been asked to report for work at seven thirty as normal.

Hamilton's demeanour was grave. Taciturn at the best of times, the most he could manage in terms of small-talk now was a curt, 'Good week off?'

Without taking any notice of my mumbled answer, he said, 'Listen to these tapes.'

I was completely still. I attempted to sift through all the conversations of the last two months, trying to think of one which could incriminate me. It was difficult to think what could be on the tape, since I hadn't done anything wrong.

Hamilton flicked the switch.

The volume was on high. Cash's voice boomed, 'Changed your mind about the Gypsums?'

'No, I haven't,' I said. It is always strange listening to your own voice on tape. It didn't sound like me, it was slightly higher-pitched, and the accent stronger than I knew it to be. The tape went on. 'But I wonder if you could do me a favour?' Me again.

'Sure.' That was Cash.

'How can I buy some stock on the New York Stock Exchange?'

'Oh, that's easy. I can get an account opened for you here. All you have to do is call Miriam Wall in our private-client department. Just give me five minutes and I'll warn her you are coming through.'

Hamilton switched off the tape-recorder. Neither of us said anything for a moment.

Eventually I broke the silence. 'That doesn't prove anything,' I said, and then regretted it. It sounded just like the sort of thing a guilty man might say.

Hamilton's slight frown suggested the same thought had occurred to him. 'It doesn't prove anything conclusively, no,' he said. 'But it doesn't look good when put alongside the other evidence the TSA is pulling together against Cash. It sounds to them as though Cash is telling you how to buy stock for your own account in a company about which he has inside information. A classic way of bribing your clients to do business with you. That's how it sounds.'

'Well, it wasn't like that,' I protested.

'The shares you were talking about were Gypsum of America, were they not?'

'Yes.'

'And Cash did go out of his way to help set up an account for you?'

'Well, yes. But he was trying to help me out as a client.' I paused, trying to collect my thoughts. I felt cornered, and I couldn't think of a clever way of dodging out. In the end I just repeated the truth. 'Debbie and I decided to buy shares, based on the analysis of the company I did myself, which suggested it was likely to be taken over. Neither of us had bought shares in American companies before, and Cash seemed the natural person to ask how to do it. It's as simple as that.'

Hamilton looked at me for a long time. There is no better judge of character than Hamilton, I thought. He will know I am telling the truth.

But he didn't quite. 'It does seem odd to me that you would do something like this,' he began. 'But the TSA are quite convinced that you and others traded on inside information. You are right that they don't have conclusive proof. Prosecutions for this kind of thing are expensive and frequently don't succeed. However, they do always ruin the lives of those involved, whether guilty or innocent.'

He paused, and looked down at the table in front of him. 'I also have the interests of the firm to think of. It would be easy for the TSA to publicise this, and even fine us. I need hardly tell you what effect that would have on the institutions that give us money to manage. As you know, we are in the middle of discussions with some potential Japanese clients which could have great significance for this firm. I will not allow those discussions to be jeopardised.'

He looked up at me again. 'So I have done a deal. In the circumstances, quite a good deal for all involved. I will accept your resignation today. You will serve a two-month notice period, which should be enough time for you to find suitable employment elsewhere. During that period, you may come into work if you wish, but under no circumstances will you trade on behalf of the firm. No one outside this room will be made aware of the reason for your resignation.

'I'm sorry,' he said, 'but this is best for all of us, especially you.'

There it was. A fait accompli. A nice little deal done so that De Jong could carry on as though nothing had happened. And there was nothing at all I could do about it. That was hard to accept.

'What if I don't resign?' I said.

'Don't even ask,' said Hamilton.

For a moment I felt like making a stand, refusing to go along with him, demanding a full investigation. But there was no point. I would be crucified. At least, this way I could get another job.

I said nothing and just stared at the conference table. I could feel the colour rising to my cheeks. I felt several emotions all at once. There was anger, there was shame, and underlying both of these was a strong pull of despair. I opened my mouth to say something, but couldn't. I breathed deeply. Control yourself. You can sort it all out later. Don't say anything, don't blow your top. Just keep your composure and get out.

'OK,' I said hoarsely. I stood up, turned away from Hamilton, and left the conference room. There were one or two things I would need from my desk. Phone numbers, that sort of thing. I entered the trading room. All activity stopped. I could feel everyone's eyes on me. I ploughed through the atmosphere thick with discomfort. I didn't look at anyone. I just focused on my desk, my face set tight. My cheeks were still hot. No one said anything as I walked over to my desk, picked up my phone numbers and a couple of other things, put them in my briefcase, and walked out. God knows what they thought. I didn't want to worry about that now.

I grabbed a taxi on the street outside the building. The journey home went quickly by. By the time I reached my flat I had at least separated most of the emotions which boiled inside me. I placed them all in their own compartments; divided, I would conquer them.

Anger first. Anger at the injustice of being found guilty without having the chance to defend myself. My guilt had been accepted because it was easiest for everyone. Anger at the way Hamilton had let them do it. Surely he could have done something to protect me? Hamilton of all people should have been able to come up with a way out of this mess. He had put the firm before me. I thought I meant more to him than that. But, as I thought about it, I supposed Hamilton had in his usual fashion weighed the pros and cons of fighting it out to the bitter end, and had alighted on this as the better alternative. And it was pointless just screaming 'It's not fair.'

Then there was sorrow. I was beginning to fit into De Jong. I was learning how to trade and enjoying it. And for all that Hamilton had let me down, I had learned a lot from him. There was a lot more to learn; it was difficult to see how anyone else could be such a good teacher. But at least my time at De Jong had convinced me that I wanted to trade, and shown me I had the potential. I would just have to start again with someone else.

What if I couldn't get another job? A rush of panic flew to my head at this thought. What if I would never trade again? I didn't think I could face that possibility. And I needed to get a well-paid job too if I was going to raise the money to buy my mother's cottage. It would be impossible to raise twenty-five thousand pounds without a job. God knows what she would do if Lord Mablethorpe threw her out. I could already see the look of contempt on my sister Linda's face when she found out I had failed to prevent it.

But the panic soon subsided. People lost their jobs all the time. If they were any good, they soon got new ones.

I am a stubborn individual. I was buggered if I was going to be put off trading by what was no more than a piece of awful luck. You make your own luck. Sure, sometimes it runs against you, but if you keep plugging away, eventually events will run your way. The key was not to give up; every time something went wrong, just try harder.

So, I pulled out a pad of paper, and sketched out a plan of campaign for how I would get another job. Within half an hour I had outlined a series of steps that I was fairly confident would get me something. To work.

I rang two recruitment consultants I knew, and arranged appointments. I spent a couple of hours perfecting my CV. So far so good. The headhunters were pleased to have a new client, and I thought my CV didn't look at all bad.

The problems started the next morning. I had decided that a good place to begin would be the salesmen I spoke to every day. They would probably know who was hiring, and they should have a reasonable idea of my abilities. After careful consideration, I rang David Barratt first. He had been around a long time and knew a lot of people. He should have some ideas.

So I dialled Harrison Brothers. It wasn't David who answered the phone but one of his colleagues. He said David was busy but would get back. I left my number and waited. Two hours later and still no phone call. I tried again.

This time David picked up the phone.

'Hallo, David, it's Paul,' I began.

There was a short pause before David responded. 'Oh, hallo Paul. Where are you ringing from?'

'From home. You've heard then?'

'Yes, I have.' A pause. 'Have you found anything yet?'

'Well, not yet. In fact I am just starting. That's why I am ringing. Do you happen to know if there is anything interesting around at the moment?'

'Not much, I am afraid. The job market is quite quiet now,' David said. 'Look, I have got to go. A customer on the other line.'

'Before you go…' I said quickly.

'Yes?'

'I wonder if you could spend half an hour to chat about what I might do. You know the market much better than I do…'

'I'm afraid I'm quite busy at the moment.'

'Whenever you like,' I said, hearing the desperation creep into my voice. 'Breakfast, after work, I can come round to your place.'

'Paul, I don't think I can help you.' The voice coming over the phone lines was polite but firm. Quite firm.

'OK,' I said dully, 'I'll let you go,' and hung up.

I couldn't make sense of it. David was always helpful. For him to refuse to come to my assistance now was significant. I thought for a moment I had totally misjudged him. Perhaps he was a completely different person with clients than with ex-clients. But that didn't really seem to be like David.

With some trepidation I rang another salesman. Same result. Polite unhelpfulness. The third was even worse. I overheard the salesman, say 'Tell him I'm not here. And if he rings again, tell him I am off the desk.'

I sat staring at my phone. This did not look good. Who else could I ring? Cash was out of the question. With a pang I thought of Cathy. But I couldn't bear to receive the same brush-off from her as I had from the others.

Claire! She would give me some time, surely.

I rang her. As soon as she heard my voice, she broke into a whisper. 'Paul. Is it true what they are saying?'

'I don't know. What are they saying?'

'That you were caught insider trading?'

At last! Someone who was direct enough to say what they were thinking.

'No, it is not true. Or at least, I wasn't actually insider trading. But it is true the TSA thinks I was. That is why I resigned.'

'Resigned? Everyone is saying you got the sack!'

'Forced to resign then.' I almost left it at that. A further denial seemed wasted breath. It seemed as though everyone accepted my guilt. In the end I quietly said, 'I didn't do anything wrong.'

'I know,' said Claire.

A small burst of relief and gratitude came over me. 'You know? How can you know?'

Claire laughed. 'You, you are the last person in the world to get involved in insider trading. You are the straightest person I know. Much too serious. Much too boring.'

'I don't deny it,' I said, my spirits lifting slightly.

Claire's tone slipped to a conspiratorial whisper. 'Tell me what happened.'

I told her all about my purchase of Gypsum shares and why I had done it. When I came to Cash's involvement, she interrupted me. 'That worm! I should have known he would have something to do with this. My God! It is incredible he is allowed to keep trading.'

She had a point there. It had sounded as though Cash was under some sort of investigation. Perhaps his days at Bloomfield Weiss were numbered, too. That was some consolation. However, I thought that if anyone could wriggle out of trouble somehow, it would be Cash.

I told her about the reaction of David Barratt and the others to my requests for help. 'Hmm, I am not surprised,' she replied. 'Everyone is talking about it. You have achieved notoriety. Even people who don't know you are chattering. I can assure you there is no chance of anyone giving you a job in a hurry.'

I reeled under the blow. That was blunt, even for her, and she realised it. 'Oh, I'm sorry, Paul. I didn't mean that,' she said quickly. 'They will forget in a month or two. You will find something.' I didn't say anything. 'Paul? Paul?'

I mumbled goodbye and put the phone down.

There it was. Staring me in the face. I was not going to get another job in the bond market. Not now. Probably not ever. Simple. Finite.

It was a truth that I had known since the evasive phone call with David Barratt, but one which I had forced to the back of my mind. I had believed that will-power alone would get me another job. But will-power could not make people forget that I was that most notorious of financial criminals, an insider trader.

It struck me as ironic that such a simple misdemeanour as the one I was supposed to have committed should be treated with such contempt by people who routinely lied and cheated against their customers, their employers, even their friends. But insider trading was different. It was contagious. The great plague of it that had ended up claiming the mastermind of the junk bond market, Michael Milken, had crept through Wall Street, slowly passing from investment banker to investment banker until almost every house in New York was diseased in some way. The remedy was easy. At the first outbreak, any diseased member should be isolated and cut off. That was what had happened to me.

The consequences were difficult to take. To trade was quite simply all I wanted to do. To trade well was my ambition. Until a week ago it was something that looked clearly within my grasp, given a couple of years of effort. No chance now.

I suppose some people drift through life happily enough without any goal. Not me. When I focus on an objective, I strive for it with all my heart. Subsume my life in it. Sure, when I finally accepted I was not going to be the fastest eight-hundred-metres runner in the world it had been hard, but I couldn't deny to myself that I had achieved a lot to get close. To be denied even a clear shot at trading was more than I could take.

The next two weeks were the worst of my adult life. I still sent off letters, and even went to a couple of interviews, but my heart wasn't in it. I knew it was a lost cause.

Depression quickly set in. A deep black depression which I had never experienced before. I was dispirited down to the bottom of my soul. It became difficult to do anything. After a day or so, I gave up running, always telling myself that one more day's rest wouldn't hurt. I tried to read novels, but couldn't concentrate. I spent a long time in bed, just staring. I went for long aimless walks round London. But the din of traffic, the exhaust fumes and the heat left me tired and jaded. The collapse of will, for one who has drawn sustenance from it for so long, is debilitating indeed.

I was also lonely. It never usually bothered me to be by myself, but now I craved someone to talk to. Someone who could help put everything into perspective. But who was there? I could hardly talk to anyone from work. I did not have the courage to admit what had happened to me to the odd scattering of friends and acquaintances I had picked up over the years. I should have done, but I didn't. And the last person on whom I could lay the burden of my troubles was my mother. I was well aware that I would soon have to instruct solicitors about buying her cottage. How would I get finance for it? Indeed, with trading now closed to me, it would be impossible for me to get a job that paid enough.

I ignored that problem, or tried to. But the longer I left it, the more it gnawed away at me. I was responsible for leaving my mother without a home; I was too feeble to do anything about it.

In my moments of loneliness, thoughts of Cathy frequently emerged. When I wished to myself that there was someone I could talk to, that someone always became her. I thought of the easy understanding we had developed in America, her sympathy and interest in my life. I needed someone to be interested in it now.

And then her rejection came back to taunt me. Her accusations that I was ruining her career, my crass pleas to her to come out to dinner with me. She would no doubt have heard about what I had done-correction, was supposed to have done. She would be thanking God that she avoided getting involved with me, and kicking herself for even considering it. A relationship with an insider trader would be no help at all for her progress up the greasy pole.