FINAL DAY WEDNESDAY, SEPTEMBER 19

TOPTICAL IPO LOOMS

By Lawrence F. Gooden

September 19

“Unease” is the best word to describe today’s Toptical initial public offering. Touted as the biggest public offering of all time in some quarters with figures in excess of $100 billion being bandied about, insiders have sought to downplay expectations for weeks, asserting the IPO will not exceed $30 billion. The reality is that there is no way to know where the valuation will land as expectations often dictate outcome.

For nearly two years, Toptical has been the hottest social networking platform on the Internet, attracting users because of its seamless interface and perception of control. Businesses like the clever way marketing has been designed into the system. This has addressed the most serious problem social networking sites face upon going public — they have to make money or at the least demonstrate the path to it. Now payday has arrived for the company’s founders and early investors. And that’s just one of the problems.

The Toptical IPO is heavily skewed in favor of insiders, that is, those who have been invested with the company from early days. As many as half of the shares being offered come from them. This is far more than is common and suggests to some observers that those in the best position to know have no long-term faith in the company. Others argue that there are just a lot of players looking to profit and that the big percentage of total stock coming from them is not all that out of line when applied in each case.

The sheer volume of stock being made available raises serious questions as to whether or not the stock is oversubscribed. If it is, and it may very well be, too much stock will dilute share value. This will put the price into a nosedive initially and no one will be able to accurately predict at what price it will settle. This uncertainty is causing many principal clients of Morgan Stanley to reconsider their position.

The tip-off came a few days ago, when Morgan Stanley issued a last-minute revised prospectus. Readable between the lines of what was ostensibly an upbeat report was the suggestion that institutional investors exercise caution today. It is unlikely such caution will be demonstrated by the average investor for whom Toptical is often considered a close digital companion.

Looming over today’s IPO are two issues not commonly appreciated by the investing public. The first of these is the fact that the NYSE is employing new software to handle this IPO. Reports indicate it is still buggy. Given the track record of special software for IPOs there is legitimate concern. You need look no further than the disastrous BATS offering, and it was in the business of IPOs. A major meltdown by the software isn’t even required. A single glitch at the wrong moment can send a tremor through the marketplace that could become a self-fulfilling prophecy. We’re told there are no problems but that’s what they always say.

The second major issue is the role the high-frequency traders will play today. It is estimated that as many as 80 percent of the trades will be their creation. HFTs have come in for a lot of criticism of late, and deservedly so. The problem for the public and for Toptical is that most of the abuses HFTs engage in have not been eliminated. We can be certain that at least some stock price manipulation and false volume will be solely their creation. This alone will cause uneasiness and hesitation on the part of big players.

The primary problem associated with HFTs is that they make money if the stock goes up, or if it goes down. The consequence is that they have no vested interest in maintaining value. The algos HFTs use tend to act in unison with slight variations as each seeks an advantage. If the HFT algos decide Toptical is going up, they’ll join in the ride and from their participation we may witness the largest public offering in world history. But if the algos decide the stock is tanking the HFTs will pile on and drive the stock into oblivion. Either, or neither, could happen today.

What experts recall is that a trade of just over $4 billion when the average volume was $200 billion on a single day created the infamous Flash Crash. They claim that the measures taken since then will not prevent a repeat of it. We can expect more than one trade today to exceed $4 billion dollars. The consequence is that what is at stake isn’t whether or not people make money. It is if Wall Street can sustain the shock of another Flash Crash incident. And if it cannot, then the world financial system could very well totter on the brink of collapse. All it will take is a single push to shove it into the abyss.

© Copyright Financial News Analysis, LLC

75

WALL STREET
NEW YORK CITY
12:07 A.M.

Daryl noted how clean the air was outside on the street after the stuffy, closed space of the Exchange with all its electrical devices. There was a light, cool breeze, heavy with the smell of the Atlantic sweeping the Wall Street canyon, and she drew her suit jacket close in front of her.

“The coffee shop is just there,” Iyers said with his usual smile. “It’s not bad. The best part is that it’s open 24/7.”

Daryl had noticed it before. Iyers took the outside position as they walked toward it.

This was a situation she was uncomfortable with, but she didn’t know how else to deal with it. Iyers was part of the operation, though she had no reason to think he knew that she knew. Still, she couldn’t help but be on edge. She’d made good progress with the logs and copied the suspect ones to a thumb drive. With the two in-house names and the incriminating information she’d collected leading to Brazil she was satisfied she had enough to get the SEC to back off Jeff and Frank and take another look at what was really going on.

What she needed to do now was block the rogue code so it wouldn’t be operational when the IPO launched. The more she’d seen of the operation, the more it frightened her, and the speed with which changes had been made to the code in recent days suggested to her a lack of proper care. High-frequency traders, even the Exchange itself, took months to carefully craft every bit of code they inserted into the trading engines, yet glitches still happened. How much damage would a group of freebooters, their common sense dulled by greed, cause with sloppy code?

Iyers was chatting, and she feigned attention, glancing up at him from time to time, as if this were a first date. He was an attractive man, no doubt about it, but she’d seen enough of him to realize there was a forced congeniality in his interactions. There had been moments when it struck her that he was acting.

How different Jeff was. If anything, when they’d been together she found his lack of spontaneity almost too much. Looking back on it, she realized how refreshingly honest he was. Even when he was ending their intimate relationship, he’d been unable to be anything but candid. She’d taken offense at that, had nursed her anger for a wasted year. Now she understood how rare it was. If she ever got a second chance, she told herself, she’d embrace his candor, not see it as something to deal with.

As they passed an alleyway just short of the coffee shop, Iyers looked up the street, then down. Without warning, he bodychecked her off the sidewalk into the gaping blackness. Stunned, Daryl staggered, recovered her balance, then opened her mouth to scream. Iyers struck her on the side of her face with his fist, like a prizefighter delivering a knockout blow. Daryl fell, her head swimming as she struggled to remain conscious.

Iyers looked quickly back toward the sidewalk for any sign of alarm. Seeing none he seized Daryl’s feet and dragged her deeper into the dark, pulling her beyond two overloaded Dumpsters. Satisfied they could no longer be seen, he stopped and stood astride the prostate woman like a conqueror, breathing heavily.

From the ambient light and dim glimmers from windows facing the alley he could see her prostrate form. Her skirt had been pulled up above her waist revealing her panties and legs, looking pale and vulnerable. He was suddenly aroused to a fever pitch.

He reached down and jerked her out of her jacket, her body twisting side to side as he pulled it off with force. Next he tore at her white blouse, angry when it refused to give at once, tearing at it harder, finally ripping it apart to reveal her bra.

Iyers had never raped anyone before, though it was one of his recurring fantasies. Until now, he’d always taken his victims drunk or drugged, sometimes dazed from his rough handling. They were always unwilling, or at the least in no position to be willing. Still, he’d had to be careful they’d not report him and that caution had always limited what he could do.

But not tonight, not now. He could do what he wanted before killing her. It was that realization that excited him. He’d be gone in a few days after all. There was no reason he’d be suspected, no reason to hold back.

Daryl moaned and Iyers slapped her. Then he knelt beside her and began clawing at her panties.

76

GRUPO TÉCNICO
RUA ADOLFO MOTA
GRANDE TIJUCA
RIO DE JANEIRO, BRAZIL
12:08 A.M.

As they approached the parking area in front of the wide stairs leading to the French doors, César gestured for the men to stop. He stood examining what he saw. After a moment, he turned and whispered to Bandeira. “Chefe, wait here while we approach. It doesn’t look right. There’s no guard on the grounds and I can see no one at the desk.”

“My son is in there,” Bandeira said in a nearly normal voice so all could hear. “Nothing must happen to him.”

César gestured for the other two to follow, then moved cautiously toward the building. Bandeira held back, then, unwilling to wait, moved with them, his weapon at the ready.

* * *

Carl was watching the outside approach. “Trouble,” he said. “We’ve got visitors, and they’re moving like a combat patrol, weapons ready.”

“Shit,” Oscar said as he took out his automatic pistol and moved to position.

“Four armed men approaching cautiously, Frank,” Carl said into his mic. “They aren’t sure about us yet, but they soon will be.”

“I’ll be right down.” Frank gave Pedro a “stay right there” look, then moved to the door as he pulled out his weapon. “We’ve got company. I’m going down. You need to get in here and keep an eye on this one. He’s our ace in the hole. And keep your head down.”

Jeff had just pocketed Pedro’s hard drive and was about to move into the outer office to start on the computers there. He came into the office as Frank was running down the stairs. He looked at Pedro. “Don’t move.”

Pedro nodded. His father was back and with him was César and two bodyguards, hard men he’d often seen over the years. These Americans were in serious trouble. This whole raid had struck him as lunacy. What did they expect to gain from it? No one here was going to talk. He certainly wasn’t. And the way things were going, they’d be dead in a few minutes.

In the short time he’d been seated, Pedro had steadily worked at the plastic strip binding his wrists. It still held him fast, and he doubted he could free his hands, but he had to try.

* * *

César halted the men once again. He still could not see either of the guards who should have been in plain sight.

“Spread out. I think we have trouble. Be careful of your targets,” he ordered.

“Anyone who harms my son dies, along with his family,” Bandeira hissed.

* * *

Frank, Oscar, and Carl spread themselves about the ground floor, taking up firing positions they’d instinctively selected when entering the building. Each had cover and together they provided a lethal triangulated firing zone anyone foolish enough to use the front entrance would find unforgiving.

Frank spoke into his mic. “Think we can bargain using the son?”

“Maybe but I wouldn’t bet on it right now,” Oscar answered. “They don’t look in the talking mood.”

“One of you know where the light switches are?” Frank asked.

“Behind Oscar,” Carl said.

“All right. Once we know they mean to fight kill the lights. Until then, let’s see if they want to talk.”

They didn’t have long to wait and no chance to communicate.

Sergio came through the entrance first, kicking the doors open, moving fast and low, followed immediately by Paulinho with his heavier weapon, one darting left, the other right. Oscar reached for the switches. Paulinho fired from his position against the front wall, striking Oscar in the stomach just as he slapped the lights off. He fell to the floor, clutched at himself, an excruciating pain rendering him all but immobile.

Carl returned fire, aiming at the flash point of the assault rifle. But Paulinho had already moved to the side. Sergio fired back at Carl and was struck in the chest by three bullets from Frank’s handgun.

“Sergio!” Paulinho called out. “Sergio! Are you all right?”

César was now inside, moving to his right toward Paulinho. Behind him he realized Bandeira had come in as well. “Over here, Chefe!” he shouted. If something happened to him, César knew his days were numbered.

Paulinho opened up with a full auto blast, bullets striking the wall behind Frank, pictures shattering and falling, plaster flying from the walls.

“Pare! Você está louco? Meu filho!” Stop! Are you crazy? My son! Bandeira shouted.

“Paulinho, single fire. And careful!” César ordered. Sergio and Paulinho had been close friends for years.

César saw flickering light behind him. A fire had started on a curtain, lit by a sparking wire exposed by the bullet holes in the wall behind it. César turned to see if he could risk putting it out but decided against it. The flames would make him a target.

“Oscar,” Frank said into the mic. “Are you all right?”

“It’s bad,” Oscar groaned.

“Carl?”

“I’m clear,” came the answer.

A lull had come to the firefight. The only sound was the snapping flames of the growing fire.

Upstairs Jeff clutched the revolver. He’d been startled when the lights went out below, but the reason had come at once when the gunshots began. He went to the doorway at the top of the stairs and turned out the lights upstairs as well. Should he go and help?

Behind him, Pedro had given up on his hands, but he had to do something. He was certain that his father was down there, risking his life to save him. In the darkness he could just make out the tall American standing in the doorway, not far from the top of the stairs. Impulsively, he shot to his feet and charged him.

Jeff felt the blow from behind and was shoved through the doorway toward the top of the stairs. He twisted around fumbling to grab the young man who was grunting as he struggled and pushed him. Jeff clung to the revolver in desperation, trying to use both hands against the young man but Pedro was strong, stronger than he’d looked. Before Jeff had control, the two of them were on the landing, then tumbling down the stairs.

The fire had spread across the front wall. It licked at the office furniture, inching along the carpet and casting the room in a fiery glow. Paulinho had moved to his left, checked Sergio, and found him dead. Filled with rage he lay prone and searched for someone to kill.

“Pick your targets, Carl,” Frank said into his mic. “Oscar’s hurt. We need to make short work of this.”

Carl used an old dodge. He felt around on the floor, found an object that felt like a heavy ashtray that had fallen, then tossed it away from him. Paulinho fired at the sound, Carl instantly returning fire. Paulinho grunted from the impact of the bullets, slumped flat onto the floor, and was dead within a minute.

César replied to Carl’s shots with controlled semiautomatic fire but Carl had already moved. Frank fired on César, who twisted away as a bullet burned its way through his left bicep. “Merda,” he cursed under his breath as he rolled onto his back.

Looking behind him as he tried to determine how bad the wound was, César saw that the room behind him was now engulfed in flames, smoke beginning to spread everywhere. There was no turning back, but then, that had never been an option.

77

WALL STREET
NEW YORK CITY
12:11 A.M.

Consciousness came to Daryl like a bad dream. Something weighty had struck her. She had a vague memory of being pulled across rough ground, worried as her dress rode up to her waist. Then something was hitting her, grabbing at her. The sensations were remote, though, almost as if they were happening to someone else. She felt no pain, no discomfort of any kind. It was as if she’d lost all sense of feeling, as if her body had turned numb.

Then suddenly she was awake, the cocoon of silence that had engulfed her filled with sound. The rough asphalt of the alley, the debris under her, was harsh against her exposed skin. And her face hurt as if she had a terrible toothache. Above was more sound, moaning, and she felt her body being pushed back and forth.

Daryl opened her eyes and saw at first just darkness interspersed with faint light, foggy and undistinguished. A form hovered above her, near, weaving back and forth, muttering to itself, the words slurred, impossible to make out.

Richard. The name shot into her memory. I’m being murdered.

The realization came as a shock. Then, feeling her panties pulled from off her feet came the other realization. I’m being raped!

Without thinking her self-defense training took over. She’d been taught to simply act if this ever happened to her. An attacker, she’d been told, is stronger than you, may have a weapon, but he is vulnerable.

Iyers had surrendered utterly to the drives within him. Desires long suppressed were now raging out of control. He was no longer, strictly speaking, human. He wanted to possess, to destroy, to kill.

On his knees, sound coming from his mouth that made no sense, he unbuckled his belt and lowered his trousers. Daryl, no longer feeling his hands on her, forced her eyes to focus. He was standing right there, his legs slightly parted. With all her strength, following her training, she raised her right leg, and before Iyers could react, shot her foot into his groin like a bolt.

The pain coursed through Iyers’s lower body, sickening in its intensity, the nausea almost overwhelming as he doubled up. Daryl pulled her leg up again, then kicked him a second time, now in the face, with everything she had.

Iyers cried out, then rolled away, writhing on the ground, one hand on his broken nose, the other clutching himself. Blood was streaming, clogging his throat, and he thought for an instant that he was choking to death.

Daryl also rolled, then with a sense of urgency, she pushed herself up and onto her feet. Run! Run! That’s what she’d been taught. She looked and could just make out the street beyond the Dumpsters. She could be there in seconds, long before Iyers had any chance of recovery.

She took a step, then another, finding it very hard to move her feet. She was walking like a zombie. She felt naked and held her arms across her body. She took another step, then another. It wasn’t far. She could see cars driving by.

She reached the first Dumpster. Exhausted, she braced her hand on it to draw a deep breath, to gather her strength. Just then, Iyers leaped on her from behind. They fell to the dirty pavement, Daryl trying to push him off, Iyers’s hands clutching at her throat.

He was too heavy, too strong, she knew. This wouldn’t work. She tried rolling right, then left, but the man used his legs to pin her down. In desperation Daryl spread her arms and searched the ground about her, looking for something, anything, to help.

Nothing.

She could no longer breathe, and for just an instant, the thought formed that this was the end, that her life would extinguish in this filthy alley, at the hands of a rapist. She felt a sense of loss, of regret.

Then her right hand had it. She didn’t know what “it” was but it was heavy, with sharp corners. She slammed it against Iyers’s head, glancing off it. His hands relaxed on her throat, and she drew a lungful of welcome air. She struck again, and this time he fell from her.

Daryl struggled to her knees but stayed where she was. He’d come after her again if she ran. He’d come. She knew it. She lifted the object and struck his head again, then again, then again, until finally she knew he wouldn’t chase her, that he’d never chase anyone again.

78

GRUPO TÉCNICO
RUA ADOLFO MOTA
GRANDE TIJUCA
RIO DE JANEIRO, BRAZIL
12:24 A.M.

Sergio and Paulinho were dead. César could see their bodies in the light of the raging flames. The fire was to the ceiling now and had begun to spread along the walls. Wooden furniture here and there was spontaneously combusting under the intense heat, making sounds like popcorn in a kettle. How many men was he facing? Four, five? He couldn’t tell but surely his team had hit someone. Sergio and Paulinho were too good to have missed entirely.

Bandeira crawled from where he’d been hidden to César, his weapon at the ready. “We have to get out of here before we are burned alive. Have you seen Pedro?”

“No. He’s probably upstairs.”

“I hope you’re right. Rush them,” he ordered. “I’ll cover you.”

Rush? César thought. Yes, stand up, run forward, draw fire, and chefe will kill them. And I’ll be dead. He didn’t move.

“I said ‘rush them’!”

Just then, a voice called from across the room. “We’ve got Pedro! Leave us while there’s still time. We’ll be in touch. We’ll release him unharmed afterwards.”

It was Bandeira who answered. “Filhos de putas! Release my son now, and you’ll live! Otherwise, you and your families are all dead!”

Bandeira aimed at the direction of Carl’s voice and opened fire. The bullets churned up the woodwork around Carl, rising in an irregular line along the wall, then bore down toward him. Carl rolled away from the lethal spray.

Frank fired three times at the muzzle flash, then an instant later felt a blow to his side followed a moment later by pain. He too rolled away, grabbing at his side.

Agora!” Now! Bandeira ordered and this time César leaped forward, firing as he did.

Across the room Carl saw the figure rise, then rush forward in a crouch. He fired and the man stumbled, then fell. Bandeira opened up on his gun’s flash but Carl had already moved, one bullet stinging as it struck his boot.

On the stairs, Jeff and Pedro were struggling, but one-sidedly as the young man’s hands were behind his back. Still, the young man kept at it, pushing at the American, instinctively trying to shove him the rest of the way down the stairs, into the open, where someone would surely see and kill him.

Though still limited primarily to the walls and ceiling, the fire crawled into the living area. The flames now reached the lower steps of the stairs, blocking them intermittently. The air was filled with heat and smoke, and it was becoming increasingly difficult to breathe.

Carl moved to Oscar and found him still alive but unconscious. He looked near death. “Come on,” he said, hoping Oscar could hear him. “Time to go.” He took Oscar by his arms and dragged him along, crawling away from the inferno toward the rear door and escape.

Jeff and Pedro continued to struggle. More than once Jeff had Pedro against the railing but each time the young man had found a way off. Finally, Jeff pinned him and shoved with all his strength. The railing gave and Pedro screamed as he was pitched off the stairs, Jeff teetering but managing to keep from falling after him. Pedro plunged backwards fifteen feet, falling headfirst to the floor, where he lay unmoving. His body wasn’t far from Frank who saw at once that the man was dead. So much for the ace in the hole.

“Jeff!” he shouted into his mic, no longer sure the cell phones even worked. “Jeff! Get out of here. I’ll cover.”

Jeff could see Frank below and heard him over the roaring flames.

“Get the others and go!” Frank shouted. “I’ll go out the second floor and meet you outside.”

* * *

Lying on the floor, Bandeira watched César die and was stunned. What had he done? His three best men, all dead within minutes. Then he looked up and there were two men struggling on the stairs. Suddenly, one of them, his son, had plummeted to the floor.

He saw another figure bolt across his line of fire but was too shocked to shoot. His son. His only son. He began moving toward him, hardly registering the man in front of him, to his left, pulling someone from the flames. The heat was intense. The acrid smoke bit his nostrils. When he finally reached Pedro, he could no longer see the man.

The salon was becoming an inferno of yellow and red flame. Smoke made it almost impossible to breathe. Bandeira knew if he remained here much longer, he’d be dead. He reached out and touched Pedro’s still face, felt his hair. An image of him as a toddler learning to walk flashed in his mind.

Bandeira forced his mind back to the now. He looked up to the second floor and saw his son’s killer crawling up the stairs, away from the flames and smoke toward the upper office. In a rage, Bandeira aimed and fired, bullets piercing the stairs. He fired his IMBEL MD97 empty, and he dropped it, pulled out the automatic pistol he often carried, and ran to the foot of the stairs, which were nearly engulfed in the fire. He paused, judged the dancing flames, then plunged across, scrambling up the steps, only one thought on his mind. To kill the man who’d murdered his son.

* * *

Jeff had seen the bullets lacing through the staircases and thrown himself against the wall. When the firing stopped, he rushed to the second-floor landing as Frank ordered, still clinging to the pistol. The smoke was now so thick, he could scarcely breathe and his throat ached. He turned, instinctively searching for his friends below but could see nothing beyond the bright flames and heavy smoke. He went into the offices, then to the back room and straight to one of the windows.

It was barred against burglary, and he could see no way in the dark of opening it. He stepped back and kicked, then kicked again. Behind him he could hear the fire. All around him the smoke filled the room. He coughed, then gagged. He knew that he’d pass out soon.

At the top of the landing Bandeira suddenly emerged, his clothes smoldering from the flames, his hair singed, his eyebrows nearly burned off. He spotted the figure at the window and fired.

The glass shattered in front of Jeff. He turned and there was Bandeira. Jeff dived to the side, Bandeira snapping off a round as he did. Bandeira reached the doorway, low against the floor, and risked a quick look. Spotting Jeff, he fired again, missing him, then ducked back from the doorway.

Jeff fired in return, then moved his aim and fired twice into the wall next to the door, as if it weren’t there, recalling from his childhood how often bullets easily penetrated seemingly solid objects. But he could see from the holes left in the paint that the interior walls of the mansion were made of brick and plaster and were all but impervious to bullets.

Bandeira rushed through the doorway, firing a snap shot toward Jeff as he did to keep him down, and came to a stop concealed on the other side of the desk.

For a long minute, the only sound was the raging fire. The heat through the floor was intense, and Jeff expected flames to burst into existence any second. Smoke had filled the room like a dense fog.

Out of time, Jeff lowered his face to the floor, could just see his adversary under the desk, his foot, knee, and lower leg. He fired.

Bandeira screamed, rolled in pain, then lay on his back, his head and arm just beyond the desk, he raised his pistol to shoot again. Before he could, Jeff had him in view and fired twice into his chest.

Bandeira let out a low groan. The weapon fell from his hand. He looked out of the office toward the stairs and his dead son. He felt nothing. No pain, no desire. Nothing. And he thought nothing as his life ended.

79

WALL STREET
NEW YORK CITY
12:33 A.M.

Daryl lay with her head against the Dumpster, utterly exhausted, sucking air, grateful just to be alive. The sweet sensation of existence swept through her, nearly matched by enormous relief. She wasn’t going to die. She would live.

She stayed like that for some minutes, unable to move, unable to think clearly, simply being.

Finally, she stirred and as she did the pain returned. It took her a good minute to get to her feet. When she was standing, she saw the dark form not far away. Iyers hadn’t moved. She had no intention of checking on him. He was dead. She knew it.

She spotted her jacket. She’d need it. Not far away was her purse, which had been dragged with her by the shoulder strap. She took them both, clutching them to her breast.

She swooned momentarily. When her balance returned, she reached into Iyers’s pocket and took his badge. That would get her back in the Exchange, and hopefully the night guard wouldn’t notice that she wasn’t a Richard. Then she began walking along the alley toward Wall Street, taking baby steps, stopping whenever the effort was more than she could manage. As she neared the exit there was more light, and for the first time, she considered her appearance.

She couldn’t leave the alley looking like this. Someone would call the police. By the time she explained what happened, the urgency of her work in the Exchange, 3:00 A.M. would have come and gone. By then, it would be too late to stop the operation.

But could she just leave a dead body in the alley in the heart of Manhattan? She laughed, then kept laughing. It happened all the time, why not now?

She got control of herself and began the process of fixing her appearance. She straightened her skirt, brushing off the worst of what clung to it. Her blouse had been ripped apart. She brushed the sleeves of her jacket, then slowly buttoned it in front of her, fixing the white blouse collar so it showed above the jacket. She reached for her hair, realizing at once there was nothing much she could do with it here. She rubbed her hands all over her face.

She removed her mirror from her purse but could scarcely make herself out in the darkness. She put the mirror away and removed her makeup compact. She ran the pad across her cheeks, sure it would be an improvement.

The street was quiet. The life and death struggle in the alley had gone completely unnoticed. She turned right and walked as deliberately as she could to the coffee shop, the bright lights like a welcoming beacon. She pushed open the door and walked into a wave of warm air, humid from the kitchen and bodies, the ripe smell of fast food and coffee almost overwhelming her.

She kept walking toward the rear, where she knew the bathrooms would be. A young waitress carrying paper-wrapped silverware said, “Miss, are you all right?”

“I’m fine.”

One of the men eating in a booth stared at her as she passed but said nothing; then she was at the restrooms and inside. She went into the stall and sat, holding her head in her hands for a long time, her mind numb. Get yourself together, she said silently. You’ve got work to do yet. You can collapse tomorrow.

She looked in the mirror with alarm. The left side of her face was already bruising and her eye was turning dark. There were livid scratches on both sides of her face. One of her earrings was gone. She removed the other. Her hair was a mess. She let it out entirely, then removed a comb and brush from her purse. When she had it as good as it could look, she removed her makeup compact. She gingerly applied a coat to the bruising, covered the scratches, which stung like hell, then used her pinkie to lessen the darkening around her eye. She finished with lipstick.

After she’d put everything away, she raised her eyes and took a hard look in the mirror. She looked like a hooker who’d just been beaten by her pimp, but it would do. She’d had a hard night, maybe a fight with a boyfriend, but there was nothing she could see that she couldn’t explain away if need be.

She removed her soiled jacket. She dampened several paper towels and worked over it. The worst was the back, where she could do only so much. When she finished, it was dark from moisture but would look better when it dried. She removed her skirt and repeated the process. It wasn’t as bad because it got turned inside out when she’d been dragged, leaving most of the damage on the inside.

With fresh damp towels she cleaned her legs. She took out her compact again and applied makeup to the worst spots. She slipped on her skirt, struggled into her jacket, buttoned it in front, fluffed the blouse collar, then looked again.

You’ll do, she said to yourself. You’ll do.

Outside, she took a seat in an empty booth far from the other customers. The same waitress came up with a menu. “You’re looking a lot better,” she said. “Rough night?”

“You have no idea.”

80

GRUPO TÉCNICO
RUA ADOLFO MOTA
GRANDE TIJUCA
RIO DE JANEIRO, BRAZIL
12:37 A.M.

Jeff kicked at the window bars again but they refused to give. He kicked, then kicked again. It wouldn’t go.

His lungs were burning and every breath was an effort. He turned away from the window, stepped over the dead man, then went to the landing. The room below was a raging inferno, the heat unbearable.

He was trapped.

But unable to get out from the second floor, Jeff had no choice but to race down the stairs. He dived through the fire at the bottom, hoping he was not diving into a blaze. He rolled, then came to a hard stop, balanced uneasily on his feet and hands. Just ahead, in the dancing flames, he spotted three prone forms. He crawled toward them, gagging and coughing as he did.

Carl and Oscar were overcome by the smoke. Carl had collapsed atop Oscar, shielding him from the fire. A few feet away lay Frank, bleeding and moving ever so slow.

“Frank! Frank!” Jeff shouted. “Get out of here! I’ll get the others.”

Frank looked blankly at Jeff as if seeing an apparition. Then comprehension came to his eyes. He nodded and began to crawl toward the rear door.

Jeff moved over to Carl and Oscar. “Oscar!” he shouted over the roar and snapping of wood. There was no answer. Jeff looked around. Frank was nearly to the door, which was not far away. They’d almost made it.

Jeff took the unconscious, bleeding Oscar by the arms and began dragging him. He knew he had little time but could move only so fast. He’d drag him, stop, then drag. All the while the fire raged, the smoke stinging his eyes and filling his lungs. He coughed until he thought his guts would come out; then he’d coughed some more.

Finally, he was at the door. Frank lay there unmoving. Jeff raised an arm, felt the white-hot handle, disregarded the shooting pain, and turned it. He tried to push it open with no success. He moved, leaned against the door with his back, and pushed.

A draft of cold night air was sucked into the inferno, creating a strong breeze that momentarily drove the flames and smoke back. Jeff drew a lungful of fresh air, staggered to his feet, and with all his effort pulled Oscar out of the building into the night. He kept dragging him until he was satisfied he was clear.

He could hear sirens now. The sound of emergency vehicles. Help was coming.

Then he turned and ran back in for Frank, pulling him to Oscar.

He looked up and could see flashing lights. He looked back at the mansion. The infusion of air had whipped the fire into a frenzy. The doorway was a wall of flames. Jeff turned, and for the last time, plunged into the inferno.

81

TRADING PLATFORMS IT SECURITY
WALL STREET
NEW YORK CITY
1:39 A.M.

Back at her workstation, Daryl was beginning to feel something close to normal. It was as if what had happened in the alley was a bad dream, not an actual event. She’d had three cups of black coffee and forced herself to eat half a breakfast at the coffee shop. When she finally left to return to the office, she’d passed the entrance to the alley, not looking into it, sensing and seeing nothing that told her Iyers’s body had been discovered.

She’d scanned Iyers’s badge, the sleepy security guard paid her no attention, then ridden the elevator up. She found perhaps a third of the day shift was still at it. Everyone looked exhausted. She’d thought to check on Campos, but there was no reason. The man was busy. With his helpmate out of the way, he would be busier than ever.

Now she turned to the rogue code. She’d had time to think about it and believed she could stop its functionality, but she still had a lot to learn about the deployment system first. Also, she’d have to sabotage it at the last minute, as it landed on the jump server; otherwise, Campos might discover what she’d done and override it.

Her plan was simple enough. Once she understood the key functions of the code she planned to obfuscate them by corrupting the files. She’d didn’t want to delete them, since there might be automated checks for missing files.

But first, she had to find these key files, and she had to do it in just over one hour.

* * *

Marc Campos couldn’t understand what was going on in Rio. There’d been no updates for hours. He’d sent work to Pedro earlier and heard nothing back. He’d tried calling with no luck. The call simply went to voice mail. He’d tried Skype and again there’d been no answer.

It was possible the system in Rio was down but that was highly unlikely. He had expressly selected the location for Grupo Técnico with that in mind. The company had the services of two Internet companies. It also had a backup electric generator system. It was important it never be offline or unable to function.

Something was wrong.

He tried calling Jorge César. He’d rather not but it had to be done. No answer.

Did he dare call el chefe? It was the middle of the night in Brazil as well. And what could Bandeira do in the short amount of time left? No, he’d make do.

His other problem was that Iyers had vanished. He’d done nothing on Carnaval for nearly two hours. The time for the upload was rapidly approaching and Campos needed him for that. Campos could do it himself in a pinch but it was a job Iyers had always done in the past because it fit his job function. Campos would be running a risk of getting noticed.

He had tried calling Iyers with no luck. He’d sent him secure e-mail and text messages. Again, nothing. He’d finally risked going to Iyers’s workstation. Empty.

Where could he be?

Campos returned to his work. If Iyers didn’t show soon, he’d have to go with what he had. The code was 90 percent there. Carnaval would function as it was. He’d have to do without the other 10 percent. He checked his watch. He’d spend the next hour fixing what he could; then he’d follow up with Iyers. If he still couldn’t find the man, he’d handle the insert himself.

Then a thought came to him: What about the woman? Had Iyers seen to her? That would explain his absence. Maybe he was being too hard on him. He couldn’t be in two places at once. Maybe he’d decided he couldn’t risk having her in the building. That would explain everything except his failure to answer his cell phone.

Campos resisted the impulse to check on the woman. Unless she was already dead — the thought startled him with the ease with which it came to him — she’d be at that workstation. He could drop by later. Right now, he had more important work. Iyers would show. Too much was on the line for him not to.

* * *

Daryl was now satisfied she’d identified the files that were key to the function of the rogue code. It was only twenty minutes until the scheduled 3:00 A.M. deployment, so she assumed the final version was already on the jump server waiting to be copied into the trading engine. She doubted the last update would change the structure in any significant way, so she corrupted two of the files. When she merged her changes with the final deployment, she would in effect render the malware inoperable.

She looked at her watch. Less than ten minutes to go. How long could she wait before pressing the Enter button? If Campos was working on or watching the code, he’d see the change. It would take him only a few seconds to replace it with an untainted version.

On the other hand, she didn’t dare wait too long. If the update took place early, she’d miss her chance. Still, she was certain the malware was going to ride in with the IPO and standard nightly updates. She had to have a target opportunity, and that was it.

Her work was nearly done. She ached from head to foot. She wondered if she should go to a hospital. At the least she needed to see a doctor.

And what about Jeff? And Frank? What were they doing in Brazil? Had they acted on the new address she’d given them? She knew Frank had once been a man of action, a super-secret special agent as she’d once called him after too much wine. Everyone at the table had laughed, though Daryl knew it was largely true.

But Jeff was no secret agent. He wrote code. He understood computers. Sure, he was in good shape, and she knew from previous experience that when everything was on the line, he rose to the occasion, but still … how much could reasonably be expected of him? He was barely out of the hospital.

She wished she had a message from Jeff and Frank telling her everything was fine. In a few minutes, she planned to send one telling them that she had the evidence to clear them and that the rogue code had been stopped in its tracks.

She leaned back in her chair and closed her eyes.

* * *

Campos had still heard nothing from Iyers or from Pedro, so proceeded on his own. He would check on the woman when he was done.

He completed his work fifteen minutes before 3:00 A.M. He went through the steps to make the insert, steps designed in part to conceal the fact that he was doing it. Then he copied the rogue code onto the jump server. The master stroke was in position, all that was needed for Carnaval to be in place when the market opened was the last Exchange update.

* * *

The hallways were largely empty as Campos made his way to Daryl’s workstation. She’d picked it carefully as he recalled.

There she was. Her arms were crossed and she looked asleep. He was amazed at her audacity, simply insinuating herself into the offices of Trading Platforms IT. In theory this should have been impossible, but he’d long noted how lax security had become. He and Iyers had obviously taken advantage of it many times over the years.

He looked at her monitor and was shocked at what he saw. It was a core part of Carnaval, files essential to its operation. She’d done something to them, he knew. That’s why she was here. He stepped toward her.

* * *

Daryl jolted awake, experiencing an instant of vertigo as she did. It took a moment for her to realize where she was. She immediately checked her watch. 2:57 A.M. Time to go to work.

Just then, she sensed movement behind her. She turned and there was Campos, looking wild-eyed and angry. “What are you doing?” he demanded as he barged into the small work space.

“I don’t know what you mean. Just a second and I’ll be right with you.” She reached for the Enter button.

“Stop! Stop!” Campos shouted as he lunged at her.

The two toppled off the chair onto the floor, Daryl experiencing a sense of déjà vu. But Campos wasn’t the psychopath Iyers had been, nor was he as strong. The two wrestled on the floor, grunting in effort. Daryl struggled to get to her feet, Campos pulled and tugged at her to keep her away from the keyboard.

Finally, Daryl rolled on top, briefly pinning Campos. She struck him in the face with her fist. An image of Iyers flashed in her mind, and she struck the man again and again, no blow enough to knock him unconscious but the flurry momentarily dazing him.

Still, Campos was both bigger and stronger than Daryl, and her superior position didn’t last long. He heaved her up and off him, then moved to place himself between her and the computer. “I’m calling security,” he said breathlessly. “You should leave.”

Daryl reached onto the desk beside her and grabbed her purse. Fumbling inside she removed the pepper spray and before Campos could react, she sprayed him, right to left across the eyes just as she’d practiced. He screamed, grabbed his eyes, and all but fell to the floor.

She leaned around him, reached for the keyboard, and pressed Enter.

She stood back as Campos danced in a circle screaming for help and looked at her watch. 2:59 A.M.

82

MITRI GROWTH CAPITAL
LINDELL BOULEVARD
ST. LOUIS, MISSOURI
10:00 A.M.

Jonathan Russo stood with most his employees, watching the giant monitors arrayed across the wall of the office. Everyone was tired, but they’d made it. The new algo was in place. Over the next two or three hours, all the recent losses would be recovered and Mitri Growth would earn upward of $100 million. It was the most exciting day in Russo’s life.

He looked around. Everyone was sitting at their desks or standing and watching the screens. In fact, they’d not know the outcome for at least an hour, but they would be able to confirm the algo was functioning properly. It had worked in the tests, but the sting of their failure the previous week was still with them. Nothing was certain.

“Here we go,” someone said as the IPO trading began. No one said a word for some minutes.

Colored graphs arrayed across the displays grew in height as trading volume surged. The Toptical stock best bid and offer prices, known as National Best Bid and Offer, or NBBO, which were displayed in a large font on the primary wall screen began to change. The initial Toptical price had been set at thirty dollars. Speculation was that too much stock was being made available and that the price might very well fall at first. And that’s what happened. But not for long. The Mitri algo was designed to take a large position at the start of trading. It responded at once to the drop by executing thousands of small sales, a process called quote stuffing.

This move was part of Russo’s secret sauce. Mitri’s sophisticated statistical algo was based on past market behavior to determine optimal sale sizes and price drops, the small trades incrementally squeezing money out of the system and slowing the reaction of other algos with their sheer magnitude. Only collocated algos like theirs would be immune to the delays in getting an accurate view of the NBBO.

The pent-up demand of regular investors now kicked in as the price looked like a bargain below thirty dollars, joining Mitri and no telling how many other high-frequency traders following the same course of action. The impact of the HFTs was greater than they’d calculated but they’d allowed even for that possibility. The price began to rise. A small cheer went up.

Mitri Growth’s special Toptical IPO algo assumed that it possessed an advantage in latency over everyone else, that is, it acted based on the programmed belief that it knew the true price just slightly ahead of everyone else. The increase in HFT trading was pushing the limits of that advantage but Russo and Baker were convinced they still possessed it.

Next the combination of regular investors, both institutional and personal, taken with the high-frequency activity, caused the quotes even to the collocated algos to start to lag behind actual prices, just as in 1929 with the ticker tape. Unknown to anyone until days later, the lag was initially just a second, but it was soon five seconds, then fifteen, then a minute, then three to four minutes.

Nearly all of the HFTs algos immediately moved into a rhythm with the other high-frequency trading algos that were seeing different prices and as was the case in the infamous Flash Crash the price was quickly driven down. In usual trading the New York Stock Exchange applies artificial “brakes” in such a situation, to allow latency to catch up, to permit traders a few moments for reflection or to override their computers, but such safeguards don’t apply to IPOs. This was a free for all and the stock, for now, would be allowed to go where the trading took it.

Toptical rose to $32.43, then at 10:21 A.M. began to fall steadily: $31.19, $30.44, $29.56, $28.23, $28.02, $27.06, $25.37, $24.01.

“My God,” someone said, “look at that.”

$23.46, $22.43, $20.09, $18.33, $12.56, $9.07.

The free fall continued until 10:33 A.M., when the New York Stock Exchange suspended trading. Toptical’s price was frozen at $2.22. Those watching were stunned by what they’d witnessed.

A pall of gloom spread across all trading on Wall Street. The market recorded a loss of 11.2 percent, one of the largest in history. But there was no collapse, no worldwide panic, no end to the international financial market as it was known.

Later that morning, Baker brought Russo the figures. “We made a hundred thirty-seven million dollars,” he said with a grin. “A lot more if you include Toptical, but we have to wait to see what the Exchange does with it.”

“What a collapse,” Russo said. “I never imagined.”

“No, but the code we wrote did. Congratulations.”

83

TOPTICAL
JACKSON STREET
SAN FRANCISCO, CA
10:51 A.M.

Samantha Mason was in her office. She’d seen the writing on the wall much earlier, and left what was supposed to be a celebratory party. She was sitting at her desk, playing around with a game she’d been designing in her free time when Brian came into her office, shut the door, and took a seat.

“How bad?” she asked as she looked up.

“Two twenty-two,” he mumbled.

She could barely hear him. “I’m sorry, Brian. I know how much this meant to you.”

“What happened?” he asked. “I just don’t understand it.”

“I’m not exactly sure. Morgan Stanley did us no favors. They were serving at least two masters, and I think we were the less important one. We may find out it was the Exchange’s new IPO algo. It was buggy. But my guess right now is that it was the high-frequency trading algos. Their greed, and recklessness, finally caught up with them. We just paid the price.”

“Two dollars. How do I go out in public?” Brian said.

“How’s Heather taking it?” Heather was Brian’s former model live-in girlfriend, Sam’s replacement in his life. It was nasty to ask she knew. She didn’t care.

“Heather?” Brian looked at her as if hearing the name for the first time. “I don’t know. We haven’t talked. I think…” He paused. “I just don’t know.”

“We’ve both still made a lot of money, Brian. We’re rich, just not mega rich.”

“I don’t think so. Gordon talked to his people at Morgan Stanley. They think the whole trade’s going to be voided, like it never happened.”

“Wow. That’s something. I didn’t think of that.”

Brian said nothing for some time and Sam left him alone, waiting. “I’ve been thinking,” he said finally. “I hope you’ll reconsider your decision to leave. I need you. We all need you. This IPO thing was a mistake. You were right. I should have listened. We’re back to square one now. We’ve got to make Toptical a sustainable business model. I think together we can do it.”

“I’m leaving, Brian. I’ve had enough.”

“Sam…”

“Listen to me. I don’t want to spend any more of my life on this. I don’t even understand what’s been going on this last year. It simply isn’t what I want to do. I’ve got other plans. I’m sorry not to get the money but I’ve got other dreams, and I’m going to go after them. This—” She gestured grandly.

“—is in my past, even if I’ll still be here for a few weeks or a month or so to help in the aftermath. I still owe some of our people.”

“Sam—”

Just then, Gordon stuck his head in without knocking. “Brian, you’re needed on a conference call right now.”

“What’s going on?”

“Morgan Stanley needs our consent to announce the IPO is canceled. We need to work on the language of the press release.”

“Okay. I’m coming.” Brian looked back at Sam. “I need you.”

“Yes, you do,” she answered. “But I’m still leaving.”

Brian stood motionless for a moment, then quietly left.

Sam sat at her desk without moving until there was a knock at the open door. It was Molly. “Isn’t it wonderful?” she said as she came in and flopped in a chair. “The whole thing just collapsed! Now we get rid of all those finance assholes and get back to building Toptical. I know I shouldn’t show anyone how happy I am — everyone’s so depressed — but I know you understand. This really is the best thing that could happen to us.”

“I guess.”

“You don’t think so?” Molly looked crestfallen.

“I don’t know what I think,” Sam said. “Come on, Molly. I’ll buy you a drink. You’ve been putting in too much time here.”

“Really? At this hour?” Then Molly looked over her shoulder to see if anyone was watching, like a schoolgirl about to play hooky. “Okay!”

84

SAFE HOUSE
RIO DE JANEIRO, BRAZIL
7:07 P.M.

Jeff awoke lying on a bed. He ached across his entire body. The CIA doctor, if that’s what he was, had told him he’d be fine. He’d bandaged three or four places on Jeff’s forearms and neck where flames had touched him, then applied a greasy cream to other spots that gave off an angry glow. The hand Jeff had grabbed the doorknob with was wrapped in thick gauze. The doctor told Jeff to keep the cream applied and watch carefully for infection.

Frank was seated in front of the television in a worn armchair. He wasn’t wearing a shirt and his upper torso was also bandaged, especially around the right side. The television was off, and he was just ending a phone call with his wife.

“How’s Carol?” Jeff asked when Frank disconnected.

“Okay. She knew something was up but not what. She and the kids were glad to finally hear from me.”

“Did you tell her you got shot?”

Frank smiled wickedly. “I’m saving the best for last.”

“I thought the doc wanted you in a hospital,” Jeff said.

“He said something like that, but I told him I didn’t want to risk it even under an assumed name, so it was better to be here. He says I’ll be all right. He just doesn’t want any bleeding to start. I’m supposed to take it easy for a few days.”

“Any word on Oscar?”

“It was a near thing. He was in surgery for four hours, but they think he’s going to pull through.”

“I’m glad to hear that. I guess he’s in trouble, along with Carl.”

Frank stared at Jeff, then said, “You still amaze me at times, Jeff — you really do.”

“What do you mean?”

“We’re using a Company safe house, they got sophisticated surveillance equipment from the Company, a Company doctor is tending us — doesn’t any of that tell you something?”

“What are you saying?”

“Once Oscar and Carl knew the NL was involved, they called it in and got approval.”

“You’re telling me this was a CIA operation?”

“In the end, after a fashion. And the station chief is a very happy man right now. NL had been on the radar for a long time. Victor Bandeira, a really bad guy, is dead. So are his top enforcers, from what they hear. This was a good day for the good guys.”

Jeff absorbed the news. “I’m just glad everyone’s going to be okay.”

“That’s the bottom line. You should know that there’s also been some heat brought to bear on this SEC thing.” Frank had told him about his earlier conversation with Daryl and the evidence she’d uncovered. “We’re no longer suspects. The warrants have been quashed.” Just then, Frank’s phone rang. It was a Skype video call. Jeff heard Daryl’s voice when Frank answered. Frank held the phone out to him. “Someone wants to talk to you.”

Jeff took the phone and saw Daryl’s face on the screen. “Hi,” he said. She was wearing more makeup than usual, and he was sure he could detect scratches. He decided not to ask, not now.

“Hi to you. I see you’re still with us,” she said.

“Absolutely.”

“You’ll have to tell me all about it when you get back.”

“Sure thing. How are you?”

Daryl had not told Frank about Iyers or Campos. She’d save the explanation for when they were together. “Just fine. Tired. Did Frank tell you we stopped the rogue code?”

“He did earlier. But don’t you mean that you stopped it?”

“It was a team effort.”

“Thanks for helping. And it sounds like we can come home soon.”

“Good.” Daryl hesitated, then said, “Jeff, I’ve had some time to think about what happened with us. I want … I want to come back. Let’s do this right this time, okay?”

For a moment Jeff couldn’t speak. “Yes, let’s do it right.” He was almost choking when he said, “I’ll see you soon.”

Daryl smiled. “Can’t wait.”

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