Bull Street (4 page)

Jack came back to the moment, how strange Milner was behaving. Leaving over a quarter of a billion of value on the table just wasn’t like him. Clients acting out of character meant busted deals, usually at the eleventh hour. He looked over at Mickey, see if he noticed anything. Mickey and Harold had already started jawboning each other about stereo equipment, their perpetual argument. Solid state versus tubes. Vinyl records versus CDs.
Stereo schmereo. A couple a big kids.

Richard felt as if LeClaire’s question had given him his first opening, like this trip to New York hadn’t been a waste of time. “I was doing great in advertising, but…”

“Richard, my friend, I accept that. But why are you here?”

Richard glanced at his watch. This was his shot. “I told you I’ve been a student of deals. And deals guys. I’ve read just about everything on James J. Hill, Harold Milner, Carl Icahn, Sam Zell, even J.P. Morgan and Jimmy Walker.”

“What about Donald Trump?”

“A comb-over windbag who licenses his name to real developers. Are you kidding?” Richard saw LeClaire smile, a genuine smile this time that showed his teeth, his face losing its angular lines and dissolving into roundness. Richard went on, “The guys I mentioned were the ones that convinced me to go back to business school.”

LeClaire said, “But I’m still waiting to be convinced.” He lounged back in his chair, cradled his teacup in both hands and settled down as if to wait for Richard to make his case. “Just tell me about money.”

“I see money as the true medium of the financier. It has an allure and an intrigue of its own; money begetting other money, compounding upon itself. It’s a fascinating notion that almost defies the idea that matter can neither be created nor destroyed. You stick some in a little company, add brains and sweat and before you know it you’ve got a big company.”

“So how do you feel about making money yourself?”

“I’ve never had enough of it, and I can’t ever imagine having too much. If I get there I’ll let you know.”

“What do you know about being an investment banker?”

“From a day-to-day, get-the-job-done standpoint, not much. But on a broader level, I’m more a student of deals than anybody
at Michigan, and that’s given me a grounding in reality for the concepts I’ve learned in my finance classes. I don’t think my classmates understand the idea of ripping a company apart and putting it back together as more than when you started. I do.”

LeClaire looked at his watch. Richard felt his stomach drop, thinking he was going to cut the interview off. Then LeClaire started talking. “I should tell you something about us. Starting with me. I’m a graduate of Ecole Polytechnique in France, was on a fast track at Groupe Credit Generale, then sent by GCG to Harvard Business School, graduating first in my class. I was then seconded by Philippe Delecroix himself to Walker shortly after the amalgamation of Walker, Schoenfeld & Co. and GCG. I am a living example of how a motivated, young banker can excel financially and in creative and career development at Walker. I am on track to be the youngest Managing Director ever elected at Walker, except for Jack Grass himself.”

Richard stayed quiet. Interviewers who did a lot of talking always felt the interview went well.

LeClaire continued, “And you know what? If you work hard and focus the intelligence you obviously have, you could be a member of this elite group.”

Richard felt a tickle of excitement.
Now he’s selling me.

“Now let us take Walker & Company itself. We are one of the hottest firms on Wall Street today. Four years ago, streetsavvy Walker & Company amalgamated with Schoenfeld & Co. and Groupe Credit Generale. The old-school establishment English connections of Schoenfeld & Co., one of the last great English private merchant banks. The powerhouse financial clout of Groupe Credit Generale, my first employer and our French partner, the largest bank in France. The deal that Jack Grass and
Mickey Steinberg put together was an amazing coup. They got Walker access to Schoenfeld’s and GCG’s prestige and capital without giving them control. They got them to put up 51% of the capital for 40% of the vote. In the four years since the amalgamation, Walker has catapulted from a mid-tier firm to a top ten rising star on the Street.”

LeClaire paused, as if to say, “What do you think of that?” Richard didn’t want to kill his momentum, just nodded.

“Look,” LeClaire said, leaning forward like he was letting Richard in on a secret. “Sir Reginald Schoenfeld runs Schoenfeld & Co. like a personal fiefdom, handpicking his people, preserving the unique culture of the firm. GCG, despite its scale, is carved into individual profit centers run by aggressive entrepreneurs. Philippe Delecroix is on GCG’s Board of Directors, and heads two of GCG’s most entrepreneurial profit centers: the investment banking business and the merchant banking subsidiary that holds GCG’s investment in Walker. Do you know why Sir Reginald and Philippe sought out Walker?”

A question LeClaire would obviously answer himself. Richard didn’t dare even nod this time, afraid he might stop.

“Because they wanted Walker’s DNA. Because they know it is their unique DNA that drives their own organizations. What we are looking for, Richard Blum, is exceptional people with that same DNA.”

“I know what you mean,” Richard said, seeing an opening for his final pitch. “I really believe I was born to this. I know I have it in me and I can make a major impact here at Walker. But I won’t come in here with the notion I’m entitled to it; I’ll work my butt off, learn the business from the bottom up. Give me a shot. I won’t let you down.”

Now LeClaire smiled again, broadly, his face rounding out.

Richard sensed it was coming to an end and didn’t want to screw it up at the last minute. He stayed silent.

“You are sharp,” LeClaire said. “You are not full of sheet and you seem to know how to work hard and you definitely have the business under your skin. I like you, Richard.”

Richard felt he’d scratched partway through the surface. LeClaire was still smiling.
Close, shut up and leave. The guy just said he liked you.

“I like you too, François,” Richard said. He felt relieved when LeClaire looked at his watch again.

“Well, I need to get ready for my call. I will get back to you. It will be tough, but I will see what I can do.”

Richard got another toothy smile in the lobby as LeClaire escorted him to the elevator. Richard left with the feeling he’d passed the initial grilling, then connected. He felt a rush of relief, then a spasm of tension in his guts. It ended well; but well enough to be finally breaking in?

Richard got his callback to New York for a day of second-round interviews a week after he first met with LeClaire, and then didn’t hear anything until mid-April. When he did, LeClaire’s voice sounded ominous on the voicemail message. Richard’s heart was thumping as he called him back, sitting on one of the benches outside Sam Wyly Hall.

“Hello, my friend,” LeClaire said, “we are hoping you will join us as a member of Walker & Company. Tell me what we need to do to convince you.”

Richard felt his body go numb where it touched the bench, the sensation he was floating above it, and then a feeling like laughter rumbling up from his guts. He said, “You don’t have to do anything. I accept. I can’t tell you how happy I am.”

“Excellent. So let me just give you one element of our offer up front before I lay out all the details.”

Richard heard the change in LeClaire’s tone and now got a different sensation in his guts, like someone punched them. He was also aware that his butt had landed back on the hard slats of the bench and his legs were rubbery.

LeClaire continued, “I remember telling you in our first interview that it would be tough. I fought hard for you but got significant pushback. So here is what we propose: join us as an Associate in this year’s class on a probational basis. That means you have six months to prove yourself. If you accept, we will drive you hard. We will ask you to do things that may make you uncomfortable, even squeamish. We will test you to see if you are Walker material. But the other terms of your employment will be no different from any other Associate’s, and none of your classmates will be aware of your probational status.”

Richard cleared his throat, thinking on his feet, trying to put his interviewing hat back on. “I have no concerns about my ability to succeed. Of course, I accept.”

Richard listened to LeClaire walk him through the other elements of the offer, feeling the strength coming back into his legs. Probation or not, he was going to Wall Street, even if they could throw him out again within six months. But as he told himself there was no way he was gonna let that happen, he couldn’t shake the sense of a dull thud in his stomach.

Washington, D.C.
Roman Croonquist, Director, Division of Enforcement of the Securities and Exchange Commission, sat at his desk, feeling as if things couldn’t get any better. Yesterday he’d returned from New York, where he’d acted as government spokesperson at the sentencing hearing in his best insider trading bust since becoming the SEC’s top cop six years earlier. In the Ceremonial Courtroom of the U.S. Courthouse on Pearl Street, where Bernie Madoff got 150 years, 28-year-old investment banker Matthew Kowalski got the maximum: 15 years, plus disgorgement of his share of his 13-member ring’s $14 million in illegal gains, plus a $500,000 fine. Croonquist didn’t think it was enough for the slimebag, but that’s all the sentencing guidelines allowed. Kowalski, the little creep, had also passed inside information to his father, who traded on it through his niece’s brokerage account.
Pathetic.
At one point during the hearing Kowalski’s mother appealed to him with her eyes to help her son. Like hell. Croonquist had felt nothing but contempt. The kid knew exactly what he was doing. So did his old man.
They’re only sorry after they’re caught.

And even better than that, today, the SEC’s new $780 million MarketWatch system was officially on-stream, finished with its two-month benchmarking process. He typed a few keys and watched the symbols appear on the LCD screen on top of his desk, new dots in a blizzard of market trading statistics. The screen was one of 250 new MarketWatch terminals. Croonquist had been handpicked by SEC Chairman Green and Croonquist’s old boss, Phil Johnson in Surveillance to get MarketWatch up and running. It monitored trading activity worldwide through electronic surveillance of all major stock exchanges.

Now the bad guys
really
don’t stand a chance.
He cracked open a pistachio nut and popped the meat into his mouth.

Croonquist looked up and saw Charles Green, the SEC Chairman, walking toward his office. He leaned back and smiled.

“Charlie, what a surprise.”

Green sat down facing Croonquist. “Yeah. But it’s never a nice surprise when your boss just drops in unannounced, is it?”

“I don’t know, you tell me.” Croonquist didn’t have any reason to feel uncomfortable. He leaned forward and moved the picture of Ellie and the girls to the side so he could see Charlie, then settled back into his chair.

“You keep eating those things, you’ll get gout,” Green said, pointing to the pile of pistachio shells on Croonquist’s desk. “I won’t beat around the bush. I just got back from the Hill, and it wasn’t lost on those guys that you just pulled off the sexiest insider trading ring bust of the decade.”