On May 6, the stock market suddenly plunged and the Dow Jones Industrial Average lost 1000 points. At first it’s unclear why it happened and who is responsible for hundreds of millions of dollars in losses. A small team of investigators from the Securities and Exchange Commission unravels the truth. Hedge fund billionaire Oren Ferber and his sexy protégé, Jenny DeBeaux, try to outfox the team of attorney Ian McRae, cognitive psychologist Candice Alexander, and physicist Max Feymann. The chase starts in New York City and ends in Las Vegas, Nevada. Who will prevail: Money and power – or – justice and fairness? It's an intellectually challenging story of intrigue and passion and a search for answers.
Thursday May 6, approximately 2:30 PM
He sat forward in his chair staring at rows and columns of numbers scrolling across the screens of his four computer monitors. His leg bounced nervously and his fingers tapped nonstop. The charts and graphs danced to a rhythm more chaotic than a mosh pit. The loud hum of activity was distracting to normal people, but not to the hundred or so at the small Wall Street trading firm.
Steve picked up the phone on the first ring. He didn't have time for his wife but had blown her off earlier. "I just bought the most amazing pair of shoes," bubbled Kristin. "You're going to love them. They're sexy as hell."
"Uh huh," said Steve. What he wanted to say was… you’re bothering me with this shit… today… really?
"You sound distracted; what's up?"
"The market is wild today," said Steve rapidly. "The Dow is down three hundred points. Some crazy shit is going on in Europe." He paused and shifted his gaze to the large TV monitor at the far end of the ultramodern office. "CNBC has been repeatedly broadcasting violent protests in Greece. The European debt crisis has everyone spooked." He wasn't sure why he was explaining the market to Kristin – she really didn't care. "Gold spiked, the euro plunged. It's a mess."
"I thought I'd wear them Saturday night," said Kristin totally oblivious to the gravity of the situation.
"What are you talking about?" mumbled Steve, annoyed at her ignorance.
"The new shoes, the sexy ones… I thought I'd wear them Saturday night."
"Oh… okay," his voice trailed off. He couldn't think of sexy shoes, not right now. He stared at the computer monitors like a master studied the chess board.
"Do you remember … we're meeting my high school friend for dinner? He's bringing a new girlfriend."
"Yeah right… what's his name, Ivan?" said Steve distractedly. He was accustomed to doing fifty things at once and was especially adept at half listening to Kristin. "He's a government attorney or something." He banged on the keyboard.
"His name is Ian," said Kristin. "He's a great guy and; I think you’ll get along well."
The volume of noise in the trading room suddenly exploded. Every price quote on the screens turned red. "The Dow was down three hundred points a few minutes ago, now it's down four hundred." He raised his voice to a shout. “Kristin, I'll call you back." He slammed down the phone.
"What the hell is going on?" another broker shouted. "Now we're down four hundred and fifty points. I've never seen anything like this. Down five hundred…" As fast as he could say the numbers, they changed.
Steve took over the play-by-play. "We’re down five hundred and fifty, down six hundred… holy crap." Although he was shouting, nobody heard him. The room erupted into a cacophony of chaos. Some traders stood up and looked out the window, others frantically dialed the telephone. Trading assistants fielded phone calls from panicked clients. It was louder than the final seconds of a close basketball game at Madison Square Garden. Steve shouted, "A few minutes ago Procter & Gamble was $62 per share, now its $50 a share. I wonder if North Korea set off a nuke." Steve scanned the Reuters news feed but saw nothing unusual. "Maybe the Iran-Israel conflict boiled over. Or another terrorist attack; I hope the fuck not."
A guy in the next cubicle shouted, "Something is definitely going on. I've been involved in the financial markets for twenty years and have never seen anything like this; major companies are trading at $1 a share. Holy shit, Accenture is trading at $0.01."
Steve glanced at the clock hanging on the far wall. It was quarter to three. "Down six hundred and fifty… down seven hundred and fifty points; the fucking thing is melting down." If I had balls I'd buy into the panic. He heard a voice in his head. Buy when there is blood in the streets. It was the mantra that his father always preached.
"Right," said Steve aloud. No one heard him. A Rudyard Kipling poem came to mind. If you can keep your head when all about you…"Down eight hundred, I can't believe it. Procter & Gamble is trading at $40 a share." He typed frantically – he input an order to buy 1000 shares in his personal account and was executed at $39.75 per share. He just invested $39,750 of his own money.
Steve continued narrating aloud the market's decline. "Down nine hundred points… Procter & Gamble is stabilizing… Down nine fifty points…what else can I buy?" He noticed that Apple Computer dropped below $200 a share. He input an order to buy 1000 shares. He was in deep – he had just invested nearly $240,000, almost his entire liquid net worth. The ringing telephone snapped him back to reality.
"Steve, what the hell is going on? I just got home and flipped on CNN. They're talking about a market meltdown. Are you there? Can you hear me?"
"Yes, I'm here. The market is recovering as quickly as it fell. The Dow bottomed-out down 1000 points. I have to go. I'll call you later."
Steve stared at his computer monitors. He was dumbfounded – the markets are not supposed to behave like this. By three o'clock, Procter & Gamble bounced back to $62 per share. Apple climbed to $240 per share. The noise level subsided. Panic was replaced by perplexity. Some shook their heads while others searched for answers to the sudden decline and swift recovery. No one understood what had just happened.
By four o'clock, the end of the trading day, the entire stock market had recovered. It was the most amazing thing Steve had ever witnessed. It was also the most amazingly profitable day in his five year career – he made $62,375 in less than twenty minutes.
Friday May 7, early-morning
Ian rubbed his bleary eyes; the alarm clock came into focus. It was barely six o'clock – dawn was breaking over Midtown Manhattan. Shadows slowly disappeared and slivers of sunshine sliced through the tall windows. He took a moment to orient himself – his brain was not fully functioning. This wasn't his bedroom… a naked girl slept peacefully beside him…clothes were scattered about… his head hurt. Slowly the fog lifted – he'd spent the night at his new girlfriend’s apartment… shots of tequila… loud music… amazing sex. He eased out of bed and slipped on his boxers. He’d spent the night once before and knew where she kept the coffee.
Jenny was awake and aware of Ian’s movements but she remained motionless and concentrated on keeping her breathing at a sleeping rhythm; she needed a minute alone. She slowly opened one eye and confirmed what she thought– Ian was safely down the hall and fumbling with the coffee maker. She quietly rolled over and stretched for his pants on the floor. She carefully removed his wallet and quickly rifled through it. She copied his driver's license number, credit card numbers and made other notes in a small notebook. She left his $87 undisturbed. She returned his wallet exactly as she found it. She quietly opened her nightstand drawer and hid the notebook out of sight.
Ian poured himself a cup of coffee and read the New York Times on his iPad. How the hell could Jenny afford an apartment like this? It must've cost millions. There was a Concierge and a doorman, floor-to-ceiling windows, a stunning view of the park, a massive Subzero refrigerator, granite countertops and mahogany cabinets. The artwork was original, the furniture was classic, the hardwood floors were Brazilian, the bathroom was Portuguese limestone; it looked like this month's feature in Architectural Digest.
Ian was an attorney for the Securities and Exchange Commission. There was no way he could afford anything like this. She must have a rich aunt. Maybe she has a killer job. She’s smart and good-looking… his mind wandered. He and Jenny had met a couple of weeks ago through a friend-of-a-friend. Beside the drunken sex they had in his hotel room, he doesn't remember much about their first date. Now that he thought about it, he didn't know much about her at all. A bit odd… He wasn't usually this quickly involved with a girl, but I not complaining… He stared out the window, a silly grin formed. He took another sip of coffee and looked down the hall and saw Jenny bounding his way wearing his blue oxford shirt and a tiny pair of panties.
"Good morning," said Jenny. "Up and at ‘em early…" She kissed him on the cheek.
"Good morning to you too," he smiled. "I thought I heard you coming. I poured you a cup of coffee." He unconsciously stared at her half buttoned shirt, maybe a second too long, before politely averting his eyes. "Sorry to run; I just got an e-mail from my boss and need to be in Washington DC right away. There was a stock market anomaly yesterday." He wasn't sure how much to tell her but he didn't see the harm in continuing. "We've got to figure out if the stock market plunge was a colossal clerical error or if some hedge fund guy got too greedy."
"I heard about it on the news yesterday," said Jenny nonchalantly. "I think they’re calling it the Flash Crash." She took a sip of coffee and picked up the iPad. Ian hurried down the hall and dashed into Jenny's palatial bedroom.
A half-hour later, Ian stepped out of the shower, refreshed and refocused. The beginning of a new investigation was stressful and he was glad for the time to organize his thoughts. He wrapped a towel around his waist, cleared a patch of steam off the mirror and shaved. From the corner of his eye he saw Jenny standing in the doorway slowly unbuttoning the shirt she'd borrowed earlier. She peeled off her panties, smiled and slowly walked forward. She wrapped her arms around his neck and kissed him slowly and passionately. Her deep brown eyes were captivating; she teased him with her tongue; she ran her fingers through his wet hair, kissed his chin, and nibbled his lower lip. Their hands interlaced and she led him to her king-size bed.
Washington will have to wait.
Friday, 11 AM
Jenny sat at her desk and concentrated on the spreadsheets in front of her. She was a financial analyst for a small Wall Street firm. She'd been there for a number of years and recently earned the right to a private office and her own secretary. Her cell phone rang but it wasn't her business mobile phone, it was her personal one. Not many had that number and she didn’t recognize the number that was calling, "Jennifer DeBeaux speaking."
"Jen, it’s Oren; are you busy?"
"Hi Oren; I didn't recognize your number. What's up?"
"Meet me at Starbucks… the one near your office… in ten minutes." Before Jenny could reply, he hung up.
Jenny arrived before Oren. She ordered a latte, patiently waited while the barista prepared it and found a seat at a table in front of a large glass window overlooking Fifth Avenue. She had a perfect view of customers coming and going. She spotted Oren entering the coffee shop – his pace was fast and excess energy seeped out. Jenny wasn't entirely surprised by his hurried look, after all, he was a billionaire hedge fund manager. Instead of ordering coffee, Oren rapidly scanned the shop and joined Jenny at the small table.
Oren wasn’t the typical Starbucks customer; he enjoyed a double espresso as much as anyone but his socioeconomic strata didn't usually stand in line for coffee. His finely tailored Italian suit cost more than most spent on their first car. His handcrafted English shoes, diamond cufflinks and platinum Rolex cost more than most homes.
With typical efficiency, he dispensed with pleasantries and got right to business. "Any luck getting close to that SEC guy, what's his name, Leon?"
"His name is Ian," said Jenny. Many were intimidated by Oren – he was a large man, over six feet tall, and looked like a retired football linebacker. He was in his fifties, didn't smoke, rarely drank and was always in control. But Jenny wasn't fazed – she'd known him for over ten years. When they first met, his net worth was only ten million dollars; the past decade had been very good.
"As a matter of fact, he slept over last night," smiled Jenny. "He's quite taken with me."
"Good, did he mention anything about yesterday's stock market?" Oren didn't often give himself away, but Jenny sensed a tinge of unease. Most wouldn't have recognized anything but Jenny had a sixth sense. She noticed imperceptible eye movements, minute muscle twitches and other nuances that others simply missed. Besides her gorgeous good looks, large breasts and high IQ, it was her most valuable trait. "I've had calls from the Wall Street Journal and New York Times asking me to explain what happened. No one understands how the stock market could plunge and recover in such a short period of time." He paused, crossed his legs and interlaced his fingers, in a cocky way, like when he knew an answer before everyone else. "I want to make sure we're prepared in case there's a backlash."
Jenny slowly nodded and understood what Oren meant. "How deeply involved is your hedge fund?"
"Not now… I'll fill you in later," said Oren using his hands to push her words away. He was often dismissive, even to his close friends. "What about the attorney?"
"He's on his way to Washington this morning; he’s attending meetings to try to figure out who did what to whom and why. He said he might be gone for a couple of weeks."
It was Oren's idea for Jenny to get to know an SEC attorney. It was he who arranged the 'chance meeting' a few weeks ago. He didn't give specific instructions to Jenny – she knew what was expected; be a part of Ian's life and develop him as an asset, similar to the way the CIA developed their assets. Oren had a lot of human capital assets strategically placed throughout the financial world. It wasn't about assassination and torture, it was about information. Information and knowledge is the Holy Grail of the investment world. It didn't matter to Oren whether information was legally and ethically obtained, it only mattered that it was insightful and that he had it first. It was the difference between making millions of dollars and making billions of dollars. Oren had billions and wanted billions more.
"I'll keep in contact with him through texts and e-mail," said Jenny.
This wasn't the first time she connived in this way. Last year she used her special powers to con an investment banker into giving her information about a merger in the telecommunications industry. A few months ago, she had an affair with a 50-year-old biochemist at a large pharmaceutical company. Once she found out the results of a key phase III trial, before anyone else, she broke it off. Too bad, she enjoyed the attention of the sexy older woman.
Although she didn't work directly for his hedge fund, she and Oren often combined forces. She had a significant financial stake and benefited by its success. In economics parlance, their incentives were perfectly aligned.
Oren nodded. "I need to know what they're up to. You should consider a weekend rendezvous or something."
"Okay Oren… I know what to do," said Jenny with a wink. "This isn't my first rodeo."
He smiled, the first time since he arrived. "For the time-being, this is our top priority." His serious look returned. "We need to be discreet. No e-mails, only burner cell phones and conversations in public places. My sources in law enforcement tell me that the SEC is getting sophisticated. Let's keep our distance – no one should know we're connected."
"Okay," said Jenny. She had been nodding in agreement at everything he said. Throughout the meeting, her eyes never lost contact with his. When required, she had the same intensity he did – that's part of the reason why they got along so well. In one way, she was a younger version of him – she was his protégé, or so he thought.
"I'm on my way to give a presentation to a group of potential investors. We’re kicking off a major fundraising campaign. Strike while the iron’s hot, so to speak. And by the way," he smiled again, "we made $150 million yesterday."
Jenny raised her eyebrows and returned the smile. Oren pushed back his chair, gave a slight nod and was out the door before she could respond.
On the way back to the office, Jenny sent Ian a text message: Had a great time this morning ;) Miss you.
Almost immediately, Jenny's phone buzzed: Back on Saturday. Meet you @ Jasmines @ 8.
The hook was set…
Friday, 2 PM
The investor meeting was held in the large conference room of Oren Ferber's Park Avenue office. Nineteenth century paintings adorned the walls, antique Azerbaijani rugs covered portions of the terrazzo floors. Butlers served smoked salmon, caviar, shrimp, lobster and other exotic hors d'oeuvres. Once everyone was seated, Abigail, the twenty-three year old model turned receptionist, introduced Roger.
"I'd like to start by thanking everyone for coming today. For those of you who don't know me, my name is Roger Neil. I'm the director of investor relations." He cleared his throat and continued, "It's not often that we open our fund to new investors. The opportunity…"
Roger spent the next fifteen minutes giving an overview of the Black Onyx complex of hedge funds. "… but you didn't come to listen to me ramble on. I'm sure all of you know Oren's reputation – he's regarded by many as one of today's top macro fund manager. So, without further ado, ladies and gentlemen, Oren Ferber."
Oren stood up and was greeted with polite applause. "Wow, Roger. I hope I can live up to the high expectations you've set." He smiled broadly and everyone laughed. "Yes, thank you for coming today."
The conference room was packed with thirty high net worth investors and their advisors. The event was by-invitation-only, and some of the richest families on the East Coast were represented. Once word was out that Black Onyx would take new investors, there was a competition to be among the first invitees.
Not one for small talk, Oren started immediately. "According to modern portfolio theory, rational investors seek to hold a portfolio that is mean/variance efficient, that is, a portfolio that offers the highest level of return per unit of risk, and the lowest level of risk per unit of return. We're rational investors, but that's not what we do." He paused so that everyone could digest what he just said, but that's not what we do.
"We buy the most risky securities available and expect to lose money on ninety percent of the trades." He paused again and repeated, "We buy the most risky securities and lose ninety percent of the time." He poured himself a glass of water and continued, "But… we’re not fools with our money." He smirked and raised his eyebrows. "On our bets that work out, we make five, ten, or one hundred times the amount invested. In other words, if we commit $10,000 to a trade, we'll either have nothing – or – $1 million." He focused his eyes sharply. "The magnitude of our profitable trades dwarfs our losing trades," he paused, "SIGNIFICANTLY."
He continued, "I'll give you an example – In late 1999, our investment premise was that the Internet boom would turn into a bust. Among the investing public, there was too much enthusiasm for everything technology. Prices rose significantly, to levels that, according to our models, were unsustainable. We knew it was only a matter of time before it was revealed that the Emperor had no clothes. Our early trades were failures. The stock market defied logic and went higher, and higher. At one point, a company that sold dog food over the Internet and featured a sock puppet on a Super Bowl commercial had a valuation of several billion dollars. The options and futures contracts we bought expired worthless, month after month." He frowned. "That was, until, March 2000. The stock market cracked, and our investments paid off. By September, our portfolio was up by one hundred and thirty-five percent. We finished the year up over two hundred percent." His confident smile returned.
"By August 2001, we had exited most of our bearish trades. We were market neutral by September 2001, and then, the God awful events of September 11 occurred." Oren lowered his head in a dramatic effect. The room fell silent and others bowed as well. "We stayed out of the market for the remainder of the year, but finished 2001 up threefold. By sticking to our convictions, and being willing to suffer through losses, our investors increased their net worth at a time when most were retrenching and strategizing about living a lower standard of living." He picked up his tempo.
"The Internet boom and bust is not an isolated event. There was the stock market crash of 1987, the Japanese real estate and equity collapse that began in 1989, the Long-Term Capital Management debacle, the Asian financial crisis of 1997, the 1998 Russian financial crisis, and most recently the US housing collapse. During all of those periods, our initial trades lost money. But when the market came around to our way of thinking, we excelled and made considerable profits." He reached the critical juncture of his presentation.
"And today," he looked around the room and made eye contact with each potential investor, "we've identified a new set of market anomalies and conundrums that offer the potential for tremendous returns." He nodded his head and encouraged others to agree with him.
"For example, our complex-event processing, high-frequency trading algorithm is very profitable. Other strategies are producing extraordinary profits. The investments we've made in human capital and technology are paying off." He took another sip of water before continuing.
"The opportunity we're presenting today doesn't come along often. You're all sophisticated investors, and some of you are current investors." He raised his voice and spoke confidently and clearly. "Today, we’re opening our fund to new investors. The minimum investment is $5 million. From there, the sky's the limit. We're capping this round of fundraising at $1 billion."
Oren concluded the presentation by introducing some of his analysts and staff. "Roger can explain the logistics and details of the fund and provide you with an offering memorandum. This afternoon, I'll be available for questions."
The buzz in the room was palpable, almost giddy. Some talked among themselves, others lined up to ask questions or shake Oren's hand. By the end of the afternoon, the Black Onyx Fund had commitments for $500 million in new investments.
Greed is good…
Friday, 4:30 PM
Securities and Exchange Commission, 100 F Street, NE, Washington DC
Candice Alexander sat in the back of the conference room diligently taking notes and observing every detail. At five feet two inches, with the body of a long-distance runner, sporting geeky eyeglasses, and wearing little makeup, nobody noticed her. But she noticed everyone and everything. She noted the guy to her right half-listening and doodling on his yellow legal pad. The young woman two rows forward was engaged in a text conversation. The older attorney directly in front of her seemed to be dozing. Two men at the back of the room were deeply engrossed in a discussion of who had a better pitching lineup, the Yankees or the Red Sox.
Apparently she wasn't the only one who was bored with the attorney at the podium who droned on. For the past eight hours she and fellow Securities and Exchange Commission attorneys and investigators had been listening to experts discuss what the SEC was calling an extraordinary rapid decline and recovery of many US-based equity products. The meetings were convened to put the pieces of the puzzle together, to find the answers to yesterday’s events, what the popular press was calling the Flash Crash.
The final session of the afternoon was concluding with an understanding of what didn't happen – no single event appeared to cause the market collapse, there was no evidence of a fat finger error, there was no unusual trading before the plunge and FBI intelligence pointed neither to hackers nor terrorists. Many of the experts believed the most likely scenario was that professional liquidity providers stopped trading at approximately 2:45 and no one stepped forward to absorb the massive trading volume. Interestingly, no one speculated why it happened.
Candice was amused by the evolving blame game – the New York Stock Exchange blamed the NASDAQ. The Chicago Board Options Exchange pointed fingers at high-frequency traders, human traders blamed computer trading; everyone was to blame, but no one was responsible.
Candice wandered to the back of the room, to the refreshment table; she needed a strong coffee. She saw a familiar face milling about and tapped him on the shoulder, "Having fun yet?"
It was Ian McRae, an SEC attorney currently assigned to the New York City office. "Candice Alexander, is that you?" He extended a hand and firmly shook hers. He was nearly a foot taller than Candice, lean and athletic – he played college baseball and had a successful collegiate pitching career. He wasn't good enough to be recruited by major league baseball, but his scholarship was a free ride to a major Midwestern university. He subsequently graduated in the middle of his class from a small law school in upstate New York. "I'm glad to see you," he smiled. "I heard you were going to be here."
Candice and Ian had worked together several times. Recently they investigated and got a conviction of a hedge fund operator who misappropriated $75 million from elderly investors. It wasn't a huge case, but it raised their profile and resulted in promotions for each. They meant to stay in closer contact but hadn't spoken recently.
"How are you doing?" asked Candice. They spent several minutes catching up on each other's lives.
"I didn't mean to be rude," said Ian. He turned to his left, "This is my friend… and resident genius, Max Feymann." Candice smiled and shook his hand. "What do you think about today's proceedings? The flash crash has everyone stymied."
"It's the largest one-day point decline in the history of the Dow Jones Industrial Average," said Candice. "It's also the most significant financial market event since the financial crisis ended. Everyone is spooked."
"The experts I've heard today seem to think this is a microstructure market anomaly, you know, the result of computers going haywire, or something like that. Personally, I think there's more," said Ian.
"Yeah, I'm with you. I have a theory that…," Candice's voice trailed off. "I have some leads that I would like to explore. There are huge volumes of data that require analysis. Unfortunately, I have low expectations about being able to do anything with my ideas."
"Don't give up hope," said Ian. "The director has given me the opportunity to build a small team and investigate alternative explanations for the market meltdown. As you point out, the SEC and the New York Stock Exchange are hedging their bets that it was a computer error. My team and I will determine if a crime was committed, you know, figure out if somebody tampered with the markets."
"Wow, impressive," said Candice, a little cynically. She worked for the Securities and Exchange Commission long enough to know that sometimes the bureaucracy missed the obvious.
So that they could have more privacy, Ian led them down the hall and into a small conference room.
"I've already recruited Max," said Ian to Candice. He patted Max on the shoulder. "He has an unusual and unique background that makes him ideally suited for the team." He raised his eyebrows, "but I need a bulldog like you, someone who understands that what happened may not have been a technology failure; that it probably wasn’t a market anomaly or a one-off event; that this may not have been a perfect storm of coincidence and system failure." He took a breath and continued, "… that what happened may have been man-made by a highly intelligent, deviant, criminal mind whose only goal was to turn his billion dollars into five billion."
Candice nodded her head in agreement and a smile formed in the corners of her mouth. She raised her eyebrows, "I'm glad you think I'm a pit bull. But what do you think I bring to the table?"
"We've worked together a few times and I've read a lot of your reports. Nobody but you can weave together cognitive psychology, evolutionary economics, behavioral finance, and predictive profiling of financial criminals into a concise document."
"I'm glad somebody appreciates my insights. Most people think predictive profiling is quackery akin to dousing or shark cartilage cancer therapy. Most don't even accept the principle of Occam's razor, that the most likely explanation is the simplest one."
"Or Sutton's law," interjected Max. Up until now, he was a quiet observer of the give-and-take between Ian and Candice. "Physicians are taught that when diagnosing, they should first consider the obvious. Even though Willie Sutton didn't really say I rob banks because that's where they keep the money, he should have." Max was focused on Candice. "When you hear hoof beats behind you, think horses, not zebras; right?" His hands were flying wildly as if he were lecturing to a packed classroom. "If a lot of money is missing, somebody probably took it."
"Exactly," said Candice smiling. "Finally, somebody understands me."
"I hope you'll join us," said Max, returning the smile. "Ian and I are convinced that the market gyrations were engineered, probably by a financial genius and market manipulator."
"Subterfuge, intrigue, mad genius; do you think we'll be taken seriously?" asked Candice.
"It will be difficult to prove," said Ian. "But that's why we need you. You lend academic credibility to our hypothesis."
"Some financial crimes can be easy to spot," said Candice. "But if the flash crash is financial shenanigans, we’re dealing with an incredibly complex situation, not an ordinary crime."
"Incredibly complex situations," said Max, "that's my forte." "I'm a particle physicist turned econophysicist."
"Physics what?" said Candice with a laugh and a smile.
"For ten years, I was a physicist at the Brookhaven National Laboratory at the Relativistic Heavy Ion Collider," said Max matter-of-factly. He didn't consider that most people had no clue what he was talking about. "We were working with quark-gluon plasma by smashing accelerated gold and lead ions into each other, trying to discover a new state of matter. I was recruited to work at CERN in their search for the God Particle. But I lost interest in experimental physics and needed a change."
"Lost interest, I can't imagine why," said Candice with another laugh and smile. For some reason, even though she just met him, she liked Max.
"At about the same time," continued Max, "I read an article entitled An Introduction to Econophysics: Correlations and Complexity in Finance, and was hooked. I studied and read everything that I could find on this nascent field."
"Econophysics," said Candice. "Does that mean a combination of economics and physics?"
"Exactly," said Max excitedly. "I subsequently worked for one of the largest mega investment banks as a Quant and stashed away a bunch of money."
Ian was listening and nodding his head, but really wasn't part of the conversation. Candice and Max didn't intentionally exclude him, but it was obvious they were interested in each other.
Max continued, "After a while, I was disillusioned… again. As it turns out, making money is not my primary motivation."
"Mine either," said Candice in agreement.
"Thank goodness I ran into my old friend." Max wrapped his arm around Ian's shoulders and bear hugged. "He convinced me to work for the good guys."
"Finally," said Candice, "an interdisciplinary approach to financial regulation."
"Excellent," said Ian. "The three of us will join forces and crack this case."
"It's not going to be quite that easy," said Candice. "We're dealing with some of the smartest men and women on the planet. Über intelligence plus high-stakes equals unstable and unpredictable; we've got to be careful and methodical."
"I agree," said Max. "I’ve worked with plenty of Wall Street Masters’ of the Universe and know what they're capable of."
"Okay," said Ian. "What do you suggest?"
"Let's be subtle," suggested Candice. "Do you think we can work outside normal channels? You know, off the grid."
"Good idea," said Max. "These guys have their hands into everything. If you announce the formation of our team, the bad guys will be one step ahead."
"I'll convince my boss that we should work covertly," said Ian. "I'll arrange for a small office in downtown Manhattan. There are a lot of SEC employees in the area; we'll blend in."
"Okay," said Max.
"For the past year, I've been working in the San Francisco office," said Candice to Ian. "Can you get me transferred to New York City?"
"No problem," said Ian. "I'll arrange the details and send you an e-mail."
"I'm going to skip out of the rest of the meetings," said Max. "I have personal affairs to wrap up if I'm going to be in the City for a couple of months." Max shook Ian's hand and gave Candice an awkward hug. "I'll talk to you next week, Ciao."
Once Max was on the elevator, Candice said to Ian, "He's a little strange, but I like him."
"Strange, but brilliant," said Ian. "Let's get out of here. Are you up for us a drink, something a little stronger than coffee?"
"Yup, sure am. I'll meet you in the hotel lobby in twenty minutes."