Chapter 23: Endings and Beginnings

October 26, 1982, Chicago, Illinois

Monday had been routine, but Tuesday was anything but. First, when I arrived, the IBM technician was working on some kind of problem with the SNA network controller. That meant the Suits were going to be in a foul mood, but worse, there was a problem with the quotation machines, which was unrelated to the computer problems.

Mr. Nelson was going to have a severe headache the minute he arrived, which would be about ten minutes later. Of course, with him not in the office, my phone was ringing off the hook, demanding that I ‘do something’ when I had zero control over the Computer and Telephone Services Team, and there were already service techs working on both problems. All I could do was attempt to placate irate Suits, an impossible task.

“It’s going to be a bad day on the floors,” Bob observed after hearing me tell someone for the third time that the problems were being worked on, and that I didn’t have an ETA.

“You think?” Jack asked. “And it’s not even our problem!”

“Yeah, but the manager of the computer team never goes on the floors!” Bob countered. “So we take the heat because we’re part of Mr. Nelson’s team.”

As if summoned by his name, Mr. Nelson came into the mailroom.

“How bad?” he asked.

“I wouldn’t show my face upstairs,” I replied. “Just saying. Did you speak to Kent?”

“Yes, and both systems should be back inside of twenty minutes. We’ll make the opening bell in New York.”

That was a good thing, but anyone trading in Europe was having to do everything by phone, and that would include Mr. Matheson’s overnight ForEx trader. Mr. Matheson already called twice, and there wasn’t anything I could do beyond tell him the problems were being addressed.

“OK to call Mr. Matheson and give him that ETA?” I asked.

“He won’t hear ‘should’ and if we don’t come up until 8:31am, he’ll lose his shit.”

“What if we tell him it should be before 9:00am, and the techs are working hard to bring the terminals up as soon as possible?”

“Let me call him,” Mr. Nelson said. “I need to call the Big Boss first, though.”

“OK. If any calls come to me because you’re on the phone, I’ll just say what I’ve been saying — the problems are being worked on.”

“Good,” Mr. Nelson replied.

He left to make the calls, and I certainly didn’t envy him having to talk to Mr. Spurgeon or Mr. Matheson, but that’s what he was paid to do. Situations such as this one were why I was happy I’d be moving to the business side of the firm, rather than the support side. But the situation also reminded me of my promise to myself to be more understanding when I was on the other end of the phone call.

Very few people, overall, had come up from the bottom, and those who did often simply toed the line, as it were, and fell into the same behavior patterns as everyone else. That wasn’t going to be me, whether it was being reasonable about problems with technology or using the female staff as a personal harem. I was positive I’d get grief for it, but there was no way I was going to violate my personal ethics simply to fit in. But that was a concern for some time in the future; the current concern was the systems being down.

Fortunately, they were all up and running by 8:25am, so we did make the New York opening bell, though I was positive that wouldn’t placate anyone who had European traders on their team. They’d want somebody’s butt in a sling, despite the fact that all the quotation equipment was leased, and Mr. Spurgeon had red-lined the redundant systems for the computer terminals.

Just before 10:00am, Mr. Nelson called me to his office, so I asked Jack to cover for me, then went down the hall.

“Come in and shut the door,” he said.

I did so, then sat down when he motioned to one of the chairs across from his desk.

“What’s up, Boss?” I asked.

“Two things. First, I spoke to that Goombah, Theo, and tried to head off any union trouble. I think we have a deal, and it only cost us some Bears tickets.”

“They suck, so no great loss,” I chuckled. “Assuming the strike is ever resolved.”

“Next season. You know they’ll play, because the owners can go for ages without a dime in revenue while the players are all fucked. They’ll cave in the next few weeks, for sure.”

“And you think the Bears tickets will do it?” I asked.

“If they screw us, I renege on the tickets. I made that clear.”

“And that covers all six unions?”

“It does.”

“What about the final plans?” I asked.

Mr. Nelson smiled, “That’s the second thing. Mr. Spurgeon found a way to convince Matheson to take 29.”

“Care to share?” I asked, surprised that it had happened.

“He didn’t reveal any details, except to say that it would be announced in a memo by the end of the week. Matheson is meeting with the architect this afternoon at their office to go over the floor plan. The final floor plan is supposed to be approved by Friday so we can have two general contractors bid on it so we can start December 1st.”

“Same unions either way, right?”

“Yes.”

“OK. Just let me know what you need me to do, and I’ll make sure it gets done.”

“I hate losing you, Kane, but I’m glad you’re sticking around until the end of February.”

“I wasn’t about to leave you in the lurch,” I replied. “And by March 1st, Jack will be up to speed on everything.”

“Keep up the good work, Kane!”

“Yes, Boss!”

I left his office and returned to the mailroom, wondering what exactly Mr. Spurgeon had offered Mr. Matheson to convince him to move to 29. I also wondered if the memo which would come out later in the week would give any details, or simply announce that Mr. Matheson and his team were taking over the new space on 29. Ultimately, it didn’t matter to me, though I wondered if anything would be said, as it had been my analysis of the costs that had led to the result.

As, in the end, all I could do was wait, I pushed that into the back of my mind and got to work.

October 29, 1982, Chicago, Illinois

Stacks of memos were brought to the mailroom on Friday morning for distribution, and I quickly read the top copy. It was, as I expected it to be, light on details other than the reorganization of the office space. The only detail about the deal was that Mr. Matheson had been made the first Senior Vice President in the history of Spurgeon Capital. I was sure there was much more to it, though if I was going to find out, it would be in the future, if ever. It was, I thought, entirely possible that the deal was completely secret and meant to stay that way.

“I wonder what he got besides the title,” Bob said.

“We may never know,” I replied. “On the plus side, it makes our lives a lot easier, because we’ll only move five people to 29, rather than playing musical chairs of moving people off 32 to 31, and off 31 to 30, off 30 to 29. My biggest fear was that they’d move the mailroom to 29.”

“That would have sucked!” Jack opined. “What happens with the vacated offices?”

Mr. Nelson had shown me the final floor plan, and the big question would be who would rate the large office next to Mr. Spurgeon. As far as I could tell, there was nobody as yet, but I didn’t have all the information. Two spots used by Mr. Matheson’s team would go to Mr. Thiele’s two new hires, increased from one, leaving two empty analyst/trader desks.

“Two of them will be used by Mr. Thiele’s new people, but the big office and the other two desks are empty on the plan I saw this morning.”

“How many people is Matheson hiring?” Sandeep asked.

“Two right away,” I replied. “Plus up to five sometime after the move.”

“So his team will be more than twice the size of any other team, right?” Jack asked.

I nodded, “Given he brings in twenty percent of all new business, it makes sense. Spurgeon wouldn’t be what it is without him.”

“He was one of the first guys hired, right?” Bob asked.

“It was just the two of them and an assistant in 1971,” I replied. “Kristy’s dad has been here almost since the beginning.”

“1973,” Jack said. “Two years after he was hired, his mentor, who was the third trader after Spurgeon and Matheson, retired due to health issues, and he took over.”

“The distribution form for the memos says ‘ASAP’,” I said, “so let’s get them out.”

Jack, Bob, and Sandeep grabbed stacks of memos and left the mailroom to distribute the memos. That was actually the only thing even remotely interesting the entire day, and at 5:00pm, Jack and I left together.

“Is everything OK between you and Huifen?” Jack asked as we got into the elevator.

“I think so,” I replied. “Why?”

“Tell me if it’s none of my business, but Kristy said Huifen has been hanging out with a guy at Loyola.”

“We’re not a couple,” I replied. “And you know I see other girls.”

“Violet is just a friend and classmate, right? And Jeri is a business partner.”

“There are other girls,” I replied. “I’m not ready to settle down, and you know about Bev.”

“I wondered if that was it. So long as you’re cool with things. Kristy was afraid Huifen was cheating on you.”

“Our relationship is fairly casual,” I replied. “So it’s not cheating on either of our parts. I do appreciate you voicing your concern, though, because cheating is completely unacceptable.”

“I agree, though the Suits sure don’t.”

“And I have no intention of falling into that pattern of behavior when the time comes.”

“Any word on that?”

“I need to get my licensure exam results before anything could happen,” I said.

“Mid-November, right? About two weeks?” Jack asked as we got off the elevator.

“Yes. There’s the background check as well, but I’ve never been in trouble with the law and I have no credit cards or any other debt. Want a ride? Loyola isn’t out of my way.”

“Sure.”

We walked to my car, got in, and I left the parking garage.

“Your credit report matters?”

“According to the instructor of the class I took, any financial problems make you a risk, and recent judgments or a bankruptcy can block your license. If you think about it, it makes sense.”

“Is this like the military, where an unpaid parking ticket can mess you up?”

“It’s not quite that bad, but anything serious, especially if it’s recent, will block your application. And if it’s serious enough, you might never get a license. The SEC has the authority to bar you from ever holding a license for serious or repeated violations of securities laws, and, of course, you can go to prison.”

“Kristy said someone was arrested last year.”

“Jack Gilham,” I replied. “For securities fraud. He’s in prison and is barred from holding a license for life. That’s what happens when you front-run your clients. Mr. Spurgeon turned him in.”

“Kristy neglected to tell me that detail!”

“If you think about it, once Mr. Spurgeon found out, he had no choice. There’s no way he’s going to risk his license or his firm for someone who breaks SEC or CFTC regulations.”

“Matheson?”

“I’m not sure even he could get away with it,” I replied. “It’s just too risky. As my instructor said in the course, there are no shortcuts, and guys who try to take them always get caught, eventually. And think about the damage to Mr. Spurgeon’s reputation and the reputation of the firm if it got out that he condoned basically cheating his clients.

“Where I am sure Matheson would be cut some slack is the gray areas, which mostly have to do with insider trading regulations. And those are often open to interpretation. There are some clear situations, such as corporate insiders dumping stock before they announce negative financial results or some adverse regulatory event, but there are plenty of situations where it all depends on how you view what happened.”

“Example?”

“Mostly it has to do with discerning non-public information without hearing it from an insider or using corporate espionage. The SEC can question how you obtained it, and it can be tough to prove you didn’t get it illegally. And they can use patterns of trades as evidence. For example, you made the right trades at the right time that were counter to the market and counter to what appeared to a public observer to be obvious. In other words, being smart and inferring things can cause an investigation. That’s why Mr. Spurgeon has three compliance officers who review all major trades before they’re executed.”

“Doesn’t that slow things down?”

“It could, though the kinds of things they review usually aren’t about market timing or arbitrage, but moving large positions. A good example would be the Chrysler stock I bought. With the small amount I bought, nobody blinked, but had I wanted to buy, say, five thousand times as much, then Compliance would have looked at the trade to make sure I wasn’t acting on inside information.”

“When you do get moved upstairs, what will you do at first?”

Actually, I was going to move downstairs, but I couldn’t say that.

“I’ll be an analyst, which means I do research to back up Mr. Matheson and the other traders on his team, including proposing trades. Given Mr. Matheson is a currency trader, I’ll spend a lot of time looking at economic data and world events to try to discern which way currencies and major commodities, especially precious metals, will move. I’ll also look for arbitrage situations, as well as analyze hedges.”

“When do you get to actually trade?”

“That would be up to Mr. Matheson, but with a valid securities license, it could be at any time.”

“Just remember the little guys when you’re a Suit!” Jack said with a grin I saw out of the corner of my eye.

“One thing I’ll never, ever be is a Suit,” I replied. “I may work with them and dress like them, but I won’t be like them.”

I dropped Jack at Loyola, then headed home. I had no specific plans, so I hung out with Shelly and Bianca, and after having dinner and watching a movie, they joined me in bed.

October 30, 1982, Chicago, Illinois

On Saturday, I met Violet at the computer lab at 10:00am, we worked for two hours, ate lunch, then spent another four hours working on our project, which was almost done. We decided we’d only need one more Saturday session before we were ready to submit it.

When we left the computer lab, we walked to Violet’s house so she could get her costume, and then we headed towards Rogers Park. We stopped to buy ice, then drove to the house where I parked. We grabbed the bags of ice, and we went inside where Shelly, Bianca, Kristy, and Julianne were putting up Halloween decorations.

“The coolers are in the front room and kitchen,” Shelly said.

Violet took one bag to the front room, and I took one to the kitchen and we filled the coolers, then added the pop and beer. A few minutes later, Aurelio’s delivered pizza for our dinner, so we stopped to eat, then finished putting up decorations and setting out snacks.

“I need to change into my costume,” Violet said.

“You can change in our room,” Bianca offered.

Violet accepted, and we went upstairs, meeting in the hallway once we both had changed into our costumes. We went downstairs, and Bianca and Shelly went up to their rooms to change. They came down less than ten minutes later, just as our friends began to arrive. There was a wide variety of costumes, with the cutest being Violet as Little Red Riding Hood, and the sexiest being Ellie, who was dressed as a naughty nurse.

We had a great time, and just after midnight, I drove Violet home as planned. The party was still going when I returned home, but about half the guests had left, including, to my surprise, Huifen. To me, that made it clear that our relationship had fundamentally changed when I admitted I wasn’t going to ask her to go steady, or whatever it was I was supposed to call it now that we were out of High School.

I saw Shelly go into the kitchen, so I walked quickly after her.

“When did Huifen leave?” I asked.

“Basically, right after you left with Violet. I thought Huifen had told you.”

“No. I let her know I was taking Violet home, as I’d promised, and that I’d be back in an hour. Huifen didn’t say anything except ‘OK’.”

“That’s strange because she knew you were going to drive Violet home, right?”

“She did.”

“Did something happen?”

As I thought more about it, Huifen’s suggestion that we not plan to see each other regularly should have been a clue, but I’d missed it, or had misunderstood what it meant.

“Nothing that should have caused her to leave without letting me know.”

“I’m sure you can find someone to keep you warm tonight,” Shelly smirked. “I know Ellie would love to!”

And I was sure Lily would as well, though she had her mom’s car, so she had to go home so she could go to church with her mom in the morning.

“Perhaps,” I replied with a smile.

I left the kitchen and rejoined the party. As Shelly had predicted, Ellie made it extremely clear she wanted to spend the night, and as Lily did leave as I’d expected, Ellie got her wish.