No One Would Listen: A True Financial Thriller Read Online Free PDF Page A

National Association of Securities Dealers (NASD) in Philadelphia, and they never did a thing about it.
     
    My younger brother had similar experiences. At one point he was hired by a respected brokerage firm in New Jersey to run its trading desk. On his first morning there he walked into the office and discovered that the Bloomberg terminals that supposedly had been ordered hadn’t arrived. Then he found out that the traders didn’t have their Series 7 licenses, meaning they weren’t allowed to trade. And then he learned that the CEO had some Regulation 144 private placement stock, which legally is not allowed to be sold. But the CEO had inside information that bad news was coming and he wanted to sell the stock. My brother explained to the CEO, “You can’t sell this stock. It’s a felony.” The CEO assured him he understood.
     
    My brother went out to lunch with the Bloomberg rep to try to get the terminals installed that he needed to start trading. By the time he returned to the office, the unlicensed traders had illegally sold the private placement stock based on insider information. My brother had walked into a perfect Wall Street storm.
     
    He called me in a panic. “What do I do?”
     
    I said, “These are felonies. The first thing to do is write your resignation letter. The second thing you do is get copies of all the trade tickets; get all the evidence you can on your way out the door. And the third thing you do is go home and type up everything and send it to the NASD.” That’s exactly what he did. The NASD did absolutely nothing. These were clear felonies and the NASD didn’t even respond to his complaint.
     
    When I started at Makefield in 1987, the industry was just beginning to become computerized, so most of the business was still done on the phone. I would spend all day with a phone hanging from my ear. I spoke with many of the same people every day and often got to know them well—even though I never met them in person. Among the people I most enjoyed speaking with was a client named Greg Hryb, who was with Kidder Peabody’s asset management arm, Webster Capital. Greg was nice enough to take time during those calls to teach me the business. When he started his own asset management firm, Darien Capital Management, in June 1988, he hired me as an assistant portfolio manager and an asset manager trainee. I moved to Darien, Connecticut, that August, and it was there that my education really began.
     

    Darien Capital Management was a small firm; there were only four or five of us working there. But in the early 1990s we were managing slightly more than a billion dollars. And that’s when a billion dollars was a lot of money. We considered ourselves an asset management firm, but we operated as a hedge fund. Because we were so small, each of us had to wear many hats, which was a great opportunity for me. I did everything there from routine correspondence, monthly client statements, and handling of compliance issues to assisting a very good fixed-income portfolio manager. It was a lot of grunt work, but I was in on all the action. I got to learn the business of being a money manager by being an assistant portfolio manager. I learned more there in three years than I might have learned elsewhere in a decade.
     
    Certainly one of the more important things I learned was that the numbers can be deceiving. There is a logic to mathematics, but there is also the underlying human element that must be considered. Numbers can’t lie, but the people who create those numbers can and do. As so many people have learned, forgetting to include human nature in an equation can be devastating. Greg Hryb showed me the value of networking; he helped me build the wide spectrum of friends and associates I was able to call upon during the nine years of our investigation.
     
    I stayed at Darien Capital for three years. One of the people who marketed our products was a woman named Debbi Hootman. Eventually I became