Free To Trade

CHAPTER 21

Despite my fatigue, I slept fitfully. When the black outside my window turned to grey, I crawled out of bed, pulled on my running things, and set off round the park. I did two circuits. On little sleep it was hard work, but it did calm me down. I got home, had a bath, some toast and some coffee, and felt a bit better. I rang Cathy at Bloomfield Weiss. She had just got in to work. I asked her and Cash to come round as soon as they could. I said it was urgent.

They arrived about ten. I told them about Powell's search of my flat, and about my visit to Rob's. I also ran through all I had been thinking the previous day.

I summed up. 'So, we don't know who killed Debbie. We can be sure that Waigel was involved, but he wasn't in the country when she was killed. I suspect Rob might have something to do with it, and I also think that the Tremont Capital fraud is important. But for the life of me I can't put it all together. In the meantime, I am in serious trouble. All it needs is for Powell to come up with one more piece of evidence, which it seems plenty of people would be happy to manufacture, and I will be arrested. Unless I can work out who killed Debbie, I will be facing a murder charge. Have either of you got any ideas, because I sure as hell haven't?'

Cash exhaled. 'Jeez. This is all a bit complex for me. I don't know.'

Cathy didn't say anything. She was thinking. I kept quiet, hopeful she would come up with something.

Finally she said, 'OK, try this. What do we know about Debbie's murderer?'

'Well, he must have been in London when Debbie was killed,' I said.

'Right. And he may well have been the man pulling the strings at Phoenix Prosperity.'

I nodded. 'That's true. Jack Salmon was certainly talking to somebody. And that somebody knows the markets.' I thought some more. That somebody had approved Jack Salmon's proposal to buy Fairway bonds.

I had told Hamilton I thought Fairway was a good investment.

My thoughts were interrupted by Cathy. 'Waigel was lucky that no one checked out the Tremont Capital guarantee. He was running a risk there.'

'It was a private placement,' I said. 'The documents didn't have to be filed anywhere, and there was a restricted list of customers.'

'Very restricted,' said Cathy. 'Two, in fact. De Jong, and Harzweiger Bank.'

'You said Waigel suggested Harzweiger, and you came up with De Jong yourself?' I asked Cash.

'That's right,' he said. 'After Hamilton had indicated his interest in high-yielding triple-As.'

'Well, we can be pretty sure that Dietweiler was working with Waigel; he probably stuffed the Tremont bonds in client accounts, hoping no one would notice,' I said.

'Which leaves De Jong,' said Cathy.

'Mm. It is very odd Hamilton didn't check the guarantee, or at least get Debbie to check it,' I said. 'A rare mistake.'

The inevitable conclusion was there, staring us all in the face.

Hamilton.

It couldn't be true. Hamilton might have sacked me, but he was still important to me. I admired the man; he was the one person who was straightforward in this whole filthy mess. It just didn't make sense. I wasn't prepared to believe it.

But, as soon as I accepted Hamilton as a possibility, things began to slip into place. In partnership with his old business school buddy Waigel, Hamilton had set the whole scheme up. He had bought the Tremont Capital private placement from Cash, knowing exactly what it was. He was responsible for Tremont's investment in Phoenix Prosperity, and for directing Jack Salmon's trading while he was there.

But worst of all, he had killed Debbie.

He had seen the appointment with Mr De Jong in Debbie's diary. He had seen the marked-up Tremont prospectus on her desk. He knew she was going to talk to De Jong about the fake guarantee and he had to stop her.

So he killed her.

I felt numb. In shock. My body was physically unable to accept that conclusion.

'Paul? What's wrong?' Cathy reached over to touch my hand.

Stammering, I told them what I was thinking, the words coming out with difficulty.

They both just looked at me, too stunned to say anything.

I pulled my hand away from Cathy, and walked over to the window of my little sitting room. I looked over the little street bathed in morning sunlight.

The more I thought about it, the angrier I became. I felt foolish and betrayed. I wanted revenge, for myself and for Debbie.

'I don't believe it,' said Cash. 'Hamilton is as prim and proper as they come. He isn't my idea of a master criminal. He's too…' Cash searched for the word and then found it, 'boring.'

'Oh, I do,' said Cathy. 'I never liked him. He's not a human being, he's a machine. But I wonder why he did it?'

I had an answer. I knew how Hamilton's mind worked. 'Hamilton thinks life is all about playing the markets, and winning. He is obsessed by making money. It's not the money itself he likes, it's the act of making it. And he is a risk-taker. I think he got bored with straightforward trading, he wanted something a bit more exciting. This was the perfect crime. He would steal tens of millions without ever being discovered. I bet he got a great kick out of it,' I muttered bitterly.

'Why steal it, when the suckers give it away every day of the week,' Cash said, chuckling.

It was true, as long as there was one born every minute, Cash would never be short of money.

'So what about you?' Cathy asked. 'How come he let you nose around for so long?'

'I suppose he didn't have much choice,' I said. 'Once I was suspicious, he knew I would ask questions. He was probably better off knowing what I was doing and directing me, rather than letting me go off on my own. He did persuade me not to tell anyone what I found out, under the pretext of avoiding alerting the fraudsters before we had got the money back. I must admit I thought he would figure everything out. I suppose all that business about lawyers in the Netherlands Antilles was made up. Perhaps he didn't even go there.'

'But why didn't he kill you like he killed Debbie?'

I paused. 'I don't know why he didn't kill me. I suppose two dead employees in one month might have looked a little careless.' Perhaps he was too fond of me, I thought to myself. The pride of being Hamilton's star protege was difficult to shake. I felt a fresh wave of disgust for him wash over me. To think I ever admired a man like that!

He had tried to stop me though, and nearly succeeded. Suddenly the Gypsum investigation slotted into place. 'Berryman was right, Hamilton never did a deal with the TSA,' I said.

Cathy looked at me, puzzled.

'He used the investigation into my Gypsum share-dealing as an excuse to fire me. Once I had resigned, it was easy for Hamilton to spread a rumour around that I had been caught insider trading, which made me unemployable in the bond markets. Then, just to make sure, he got Rob to set me up as a murder suspect, and broke into my flat to plant one of Debbie's earrings, which had fallen off when he pushed her into the river.'

'But why did Rob help him?'

I had no answer to that one. Perhaps he just didn't like me.

'So what do we do now?' asked Cash.

'Go to the police?' said Cathy.

I shook my head. 'We can't. We don't have any proof. As soon as Hamilton realises the police are investigating him, De Jong will never see its money again. And remember, I am still the man Powell wants behind bars. He won't be thrown off the track that easily.'

Cathy nodded, worried. 'You are still on the hook for that. Powell won't be impressed when you try to tell him that your old boss, who fired you, is really Debbie's murderer.'

'Besides,' I said, 'I want to nail the bastard myself.'

'So, what do we do?'

'We get De Jong's money back.'

The other two looked at me blankly.

'We get De Jong's money back,' I repeated. 'And in the process we expose Hamilton's involvement in the whole affair. Powell will have to listen then.'

'Well, that's all fine and dandy,' said Cash. 'But how in hell's name are we going to do that?'

'I may have an idea. Let me think for a moment.'

They were quiet as I stared out of the window.

There was a way, I was sure.

I outlined the germ of an idea. We discussed it and refined it over the next couple of hours, until we had quite a workable plan.

I joined Cash and Cathy in their taxi back to Bloomfield Weiss. I waited in the reception area for an hour or so. Eventually Cathy came back with an armful of prospectuses, annual reports and computer print-outs. I took them from her and headed back to my flat.

To work. I had information on five American companies that were currently in deep trouble. I laid the collection of annual reports, price histories going back two years, and reports from Standard and Poor's, Moody's, Valueline and various brokers, in five neat piles. I began to work through them. I needed to pick one company that looked just right. I had to look at each one from three different angles: what I personally thought of the company's real prospects, what Hamilton would think, and what the market would think. I had to get the combination of these perceptions exactly right.

I broke off at three. I needed to make some phone calls. The first was to De Jong & Co. Karen answered the phone.

'Hi, Karen. It's Paul. How are you?' I said.

Karen sounded pleased to hear my voice. 'I'm fine, how are you?'

'Is Hamilton there?'

Karen's voice became much more serious. 'I'll just have a look.'

I waited a few seconds, and then Hamilton's voice came down the other end of the wire, 'McKenzie.'

I was not prepared for the response hearing Hamilton's voice would arouse in me. It was a physical revulsion; the blood rang in my ears, and the hairs on my skin suddenly became very sensitive, so that I could feel my shirt rubbing against them. A feeling of sickness welled up somewhere near my diaphragm. Rationally I knew Hamilton had betrayed me. I was not aware until then how deeply I felt it emotionally.

'Hallo, Hamilton. It's Paul.'

'Ah, Paul, how are you?'

'Fine, I suppose. I wanted to ask you something.'

I could almost feel Hamilton stiffen on the other end of the phone line. 'What's that?'

'I wonder if I could come in to the office to work out the rest of my notice period? I haven't had much luck getting another job in the bond market, so I am applying for a number of banking jobs. I would very much like to brush up on my credit skills. Besides, I am getting bored sitting around at home.'

There was a second's pause whilst Hamilton thought this through. 'That will be fine. You will be very welcome. I am afraid I can't let you trade, of course, but we would be happy to have you. As a matter of fact, there are one or two analyses that need doing.'

'Good,' I said. 'I'll see you tomorrow morning.'

So far so good. Next was Claire. As I expected, that was no problem, she was positively eager to help. Denny was more difficult. I knew I was asking a lot from him. He would have to do a fair amount of legal work for which he might not get paid if our plan failed. I didn't think that what we were intending to do was actually illegal, but it was certainly close. We talked for half an hour before Denny eventually said he would help, to my intense relief.

Now, the call I had been positively relishing. I dialled a Las Vegas number.

'Irwin Piper's office,' said a secretarial voice, exuding cultivation, politeness and authority. I asked for Mr Piper. 'I am afraid Mr Piper is not here right now. Can I take a message?'

I had expected it would be difficult to get through to him. I had thought through my message beforehand. 'Certainly. Can you tell him Paul Murray called? Can you tell him that unless he calls me back in the next two hours, I will call the Nevada Gaming Commission to discuss Mr Piper's trading in Gypsum of America bonds through his Liechtenstein bank?'

It wasn't subtle, but it worked. Piper was on the phone within ten minutes. I didn't repeat my threat; I had made it once and that would be enough. I asked Piper politely for his help. I told him why it would be in his interests to give it, that helping me would solve his problem as well as mine. I explained what I wanted him to do.

I was surprised by his reaction. He was enthusiastic. 'Sure, why not?' he said. 'I went to a lot of effort to make sure the Tahiti is as clean as a whistle, and this Tremont Capital business nearly screwed all that up. It sounds fun. I was planning to come to England soon anyway. And it would be nice to get you off my back.' I assured him I would forget all I had ever learned about him. We discussed dates and details for a few minutes and then hung up.

I dialled Cash. 'How did you get on?' he asked.

'Everyone agreed to help. Piper even seemed to relish the idea,' I said. 'I think I have found the company we are looking for.' I told him the name. 'Can you check out how it is trading? Who owns bonds, whether there are any sellers likely to emerge in the next few days, that sort of thing?'

'OK. Talk to you later.'

It was good to be in a suit again. As I walked into the Colonial Bank building and took the lift up to the twentieth floor, I felt tense but ready.

The small trading room froze as I walked in. Jeff, Rob, Gordon and Karen all stared at me for a second or two, before putting their heads down to paper and telephone. Hamilton took no notice of my entrance. There was a young man with glasses sitting at Debbie's desk. Her replacement. I was glad that Hamilton had not yet found a replacement for me.

I strode into the room. 'Morning, everyone,' I said loudly. There were a few murmured responses. 'Hallo, Karen. Miss me?' I shouted across to her. Karen, at least, smiled. It was something.

I walked over and introduced myself to the young man at Debbie's desk. He said his name was Stewart. 'My name's Paul. I work here,' I said. I saw Jeff stiffen out of the corner of my eye. Stewart was thrown into complete confusion, and blurted out something incoherent. He clearly knew who I was. He was torn between natural politeness and not wishing to be seen consorting with a criminal.

Hamilton finished his call, and came over. He was friendly enough, at least by his standards. 'Morning Paul. Nice to have you back. You can sit at your old desk.' The word 'old' jarred. 'A couple of ground rules. I would rather you didn't have any contact with the market at all whilst you are in our offices, so don't answer the phone, and don't make any calls to any salesmen.'

'You don't mind if I use the phone to ring headhunters, do you?' I asked.

'No, that's fine.' He dropped some papers on my desk. 'I have got a couple of US regional banks I would like you to take a look at. They have just been downgraded to triple B, and their bonds are yielding almost 12 per cent. If they are safe, I would like to buy some.'

Typical of Hamilton, I thought. He would make the maximum use of me that he could whilst I was there. But I was glad to have some real work to do. I would be more inconspicuous with my head buried in an annual report than hanging around trying to make work for myself.

No one talked to me all morning. I only caught the odd sideways glance. I couldn't really blame them, no one likes a crook. It was sad. They probably felt let down by me. Well, all that will soon be over, I thought. I tried to catch Rob's eye, but he was having none of it. He made sure that he was always deeply involved in phone conversations, eyes fixed on the screens in front of him.

The morning wore on. I looked at the clock on the trading-room wall. Ten fifty-nine. At eleven o'clock precisely, I heard Rob call, 'Hamilton! Claire on two.'

I watched Hamilton as he spoke to Claire. I knew what she was saying, but it was impossible to see Hamilton's reaction. They talked for five minutes. After they had finished, Hamilton leaned back, and stroked his beard. A good sign. He was nibbling at the bait. He sat like that for two or three minutes before suddenly getting to his feet and walking towards me. I quickly stared down at the balance sheet in front of me.

'Paul, I wonder if you would have a look at something for me?'

'Certainly. What is it?'

'It's a company called Mix N Match. Have you heard of it?'

I pursed my lips in concentration. 'Yes, I think so. It's a retailer based in Florida. It has been having a tough time recently, I think.'

'That's right,' said Hamilton. 'Do you know anything else about it?'

'No, I'm afraid not,' I lied.

'Well, I got a call from Claire about it just now. The bonds are trading at twenty cents on the dollar, apparently. Everyone expects the company to file for bankruptcy. Claire says there is a rumour it is about to be taken over by the Japanese.'

I raised my eyebrows. Hamilton caught my expression. 'Yes, I know,' he said. 'It's only a rumour. And Claire knows very little about junk bonds. But if she is right, we make eighty cents; if she is wrong, the most we can lose is twenty. I think it's worth a look. Claire should be faxing some stuff through soon. See what you make of it.' He walked back to his desk, and then hesitated. 'But make sure you don't talk to anyone outside the firm on this.'

'Right,' I said, and set to work. I collected all the data we had on Mix N Match from our own files. I didn't have long to wait for Claire's fax. Then I set to work, surrounding myself with papers, and tapping financial information into my computer.

I had selected Mix N Match as the best of the five companies I had looked at the previous day. It didn't look a bad investment at twenty cents; even in bankruptcy, bondholders should be able to get fifty cents on the dollar at least. With a takeover play to aim for as well, it made a hell of a good trade. Irresistible, I hoped.

For the next four hours I put together an elaborate analysis of the company in bankruptcy. I carefully valued all the assets, and put the results on a nice spreadsheet, which I printed off, and showed to Hamilton. He had been hovering over my shoulder for much of the time, and had read a lot of the material himself. He looked at the spreadsheet and stroked his beard, thinking.

I left him to it, and made a quick phone call. Cathy answered. 'He's ready. Get Cash on the phone to him now,' I whispered, and hung up.

Within thirty seconds, the light flashed on the phone board. Karen picked it up. 'Hamilton! Cash on line one!' she called.

Hamilton was lost in thought. 'Tell him I will get back to him,' he said. Damn! I hadn't considered that Hamilton would play hard to get.

Karen got rid of Cash and called across, 'Get back to him when you have a moment. It's about "Mixer Mash" or something.'

Hamilton stiffened slightly. I knew he wouldn't call Cash back straight away, that would appear too eager. He waited five minutes before picking up the phone. He and Cash spoke for half an hour. When he had finished he called over to me.

'Well, you picked a good day to come back. I'm glad you are here, you can make yourself useful. Mix N Match may be more interesting than we thought.'

'Oh yes?' I said. I didn't have to fake excitement.

'That was Cash. Funnily enough he wanted to talk about Mix N Match. Apparently the Tokyo Stock Exchange is full of the rumour that the company is about to be taken over by a major Japanese retailer.'

I interrupted. 'You can't trust Cash on something like that, can you?'

'That's right, you can't. But it's nice that Claire's rumour is corroborated. The really interesting thing is that Cash is coordinating a consortium of investors to buy up the outstanding debt of Mix N Match.'

'What's the point of that?' I asked.

'The idea is to form a Special Purpose Vehicle that owns most of the debt of Mix N Match, and then force the Japanese to pay out par on the bonds when the company is taken over.'

'I see. So who are the other investors?'

'Just one so far. But he is big. Irwin Piper.'

'But he's a crook!' I said. 'You don't want to have anything to do with him, surely.'

'He might not be whiter than white, but he is smart,' Hamilton said. 'He is putting in twenty million dollars. Cash wants twenty million from us, and he thinks he has an investor in the States he can get another twenty from.'

'So let me get this straight,' I said. 'De Jong invest twenty million in a Special Purpose Vehicle, along with forty million from Piper and this other investor. The SPV uses the sixty million dollars to buy bonds on the open market. Mix N Match gets taken over by the Japanese, who find themselves facing a powerful owner of a majority of the outstanding bonds. We can negotiate a big pay-out under the covenants of the bond indenture.'

'Exactly,' said Hamilton. 'And if the takeover doesn't happen, and the company goes into bankruptcy, then according to your analysis, we should still make a profit.'

'OK, so what next?'

'Apparently Piper has already got the documentation drawn up. He is using Denny Clark as his solicitors. He is arriving in the country tomorrow morning. We can meet him at Denny Clark's offices. You can come if you want.'

Rob was hovering, straining to hear as much of the conversation as he could. 'Can I join you?' he asked Hamilton. 'I would like to find out more about the junk bond market and you will probably need some help once Paul has finally gone.' Rob said all this without once looking at me.

Hamilton raised his eyebrows, thought for a second, and then nodded.

I went back to my desk. Karen said there was a John Smith from the agency, on hold, for me. It turned out to be Cash.

'Couldn't you think of a better name than that?' I said.

'Hey, someone's got to be called John Smith,' said Cash. 'Did he swallow it?'

'Hook, line and sinker,' I said. 'Let's just hope Piper manages to do as good a job as you.'

'Don't worry. That guy is a real pro when it comes to conning people. How do you think he made all that money in the first place?'

'You have a point there,' I admitted.

'I gotta go,' said Cash. 'I've got a deal to sell to a certain Arizona savings and loan.'