When Options Expire

By Neal Grandy

In the wake of a family tragedy, a broken, vulnerable man returns home to end his life, only to be caught up in a multi-billion dollar fraud.

• Language: English
• Publisher: Neal Grandy
• Release date: Jun 10, 2021
• ISBN: 9780989880237

Book preview

Chapter One

New York - April 1992

A nd I feel just terrible, Victor Dennis says.

The comment is peculiar enough to tear me away from the rear seat window of Victor’s town car. I turn to give him look and catch a bit of light in his smoky gray eyes. There’s a hint of a smile there.

You’re an asshole, I tell him. The smile materializes.

It’s no secret among those who know him that Victor likes to fuck with people, especially me, probably because he knows that I’m an easy mark. It’s almost as if he can’t help himself. Still, I have to believe that it comes from a place of warmth; otherwise, I know, he wouldn’t even bother. He gives me a barely discernible wink, a twitch. Welcome home, son, it says, I’ve missed you.

I laugh and go back to the window. And as we head up Madison Avenue towards the park, through a cold, wet, dreary spring evening in April, I watch some of my old haunts drift by, and Victor goes on talking about his latest trade and the poor sap who was dumb enough to take the other side.

There’s a common presumption among this new crowd, he says, "which seems to suggest that they are the new smart money and tired, old relics like me now reside at the opposite end of the spectrum. It’s a profoundly flawed presumption, as this stupid fuck has so aptly demonstrated. How someone at that level lets himself walk into that kind of trap is beyond me."

Without turning I say, You’ve been setting those kinds of traps your whole career.

Sure, he admits, but that’s not the point. Our bread and butter is small, dumb game, remember? Bagging an elephant is…disruptive. Liquidity flows change, credit dries up, counter-party risk creeps in. People lose jobs. It’s not good for anyone.

I find that fairly ironic given Victor’s track record. He’s put more than a few people out of work in his time.

This deal was gift wrapped in red flags, he continues. It’s really rather remarkable. Stupid fuck.

Apparently the ‘stupid fuck’ in question works the bond desk over at Deutsche, or at least he did until his chance encounter with Victor. As Victor tells it, he and his crew found themselves in a rather untenable situation, the unhappy owners of a very large piece of non-investment grade debt—pure garbage, absolute junk—which they happily unloaded on this naive waif who was obviously chasing fatter yields. The trade consisted of two separate issues, one of which was called—redeemed by the issuer—shortly after this genius bought it, at a very nice premium to par no doubt. One would think that someone with that kind experience might have factored in a call, even though one had yet to be announced. But then again who could have possibly known?

The second issue was a simple case of bad luck, a thing some people claim Victor had a hand in inventing. And this was the one that really hurt. The issuer simply defaulted, couldn’t make the requisite interest payment, and the value of the bond did a header off the high board. This all took place, of course, after Victor turned this guy onto a sure thing. Some people will tell you that timing is everything on Wall Street.

Still feigning some interest, I say, I’m a little surprised you got away with that.

Victor says, You know what the effective manipulation of perception is?

I turn. Marketing?

He laughs. Exactly. If you package and present things a certain way, place them in a certain light, you can convince anyone of anything.

Interesting thesis, I tell him. You come up with that all by yourself?

Let’s just say that I refined it to suit my particular skill set.

This little theory of yours extend to character traits?

His eyes widen a bit. You have one in mind?

"I was thinking of those of a primarily benevolent nature. You know, mercy, pity, remorse. I give him my best judgmental face. And their ostensible existence in those born without them."

He scowls. I believe there has to be an underlying structure of sorts, a shard of truth if you will, in order for the trait to be effectively displayed. And, of course, believed. He holds my gaze. Ours is a tough world, Seth Lennard. And you know it. There’s no place for sentiment. And my level of empathy, which you seem to discount, is, and always will be, directly proportional to the level of effort and brainpower of those with whom I deal. It rises and falls accordingly.

It’s telling that you seem to gravitate to those whose level of effort and brainpower are…somewhat impaired.

He laughs again. World’s full of clowns, kid. What can I say? There’s no avoiding them. Even recessions don’t affect their production.

The recession’s over. Haven’t you heard?

Tell that to the Street, he says.

Victor is right. The recession may have ended, but its aftermath remains. Hundreds of once stable financial institutions have failed in the wake of the Savings and Loan disaster, and its unfolding trajectory is proving to be the very definition of moral hazard. Some have begun to question the stability of a system that allows that kind of thing to happen. There’s also the fact that the first anniversary of the Gulf War has just passed, and the long term costs and consequences of that little victory are just now becoming apparent. Whatever the reasons, markets are as unsettled as ever, and people are on edge. Maybe this is what Victor really means when he says he feels terrible.

He grows reflective for a moment. But maybe you’re right, he then offers. Perhaps dimwits are my fate.

That almost sounds like resignation. You prefer something more? I ask him.

He takes a breath and releases a very faint sigh. A challenge, he replies, now and then would be nice.

I catch something in his aspect then before he turns away, something unresolved. It strikes me as a muted kind of longing, which is completely out of character, and it makes me wonder. Generally Victor’s not one to show any kind of hand, but this odd subdued disclosure comes to me in just that way—as a soft and subtle plea. And for reasons I can’t fathom, I suddenly feel quite strongly that it falls on me to make it right.

He turns back my way, abruptly brighter now, his eagle-like features almost mirthful. What the fuck, he says. There’s nothing to mourn here. All these feckless wonders are like manna, a veritable feast from generous gods. He grins. It’d be sinful not eat em, right?

And, I interject, you don’t want to piss off any gods.

Hedge those bets, my boy, he quips. Gamblin’s for saps. This from a man who’s spent the past forty years rolling the dice and wagering the farm.

The son of working class Brooklyn parents, Victor had a fairly typical childhood. He was smart, not brilliant, but what he lacked in brains he more than made up for in perseverance and tenacity. And one hell of a work ethic; kudos mom and dad. He managed to get into NYU and from there he made his way to the Street. He did the tour—from New York to LA, Montgomery Street, La Salle, good old Broad and Wall. And in all those well-worn streets, in all those hallowed halls of financial misbehavior and malfeasance, his one unique accomplishment is the money that he’s made. I don’t believe that is what he most wanted. What Victor wants is stardom. He wants to be an icon, a champion.

But that is probably not to be. At 68, his time is running out. For Victor Dennis there will be no Hall of Fame. Events have passed him by, and while he’ll never let it show, I suspect he knows it.

That’s not to say that he hasn’t had an impact. He has in many ways left his own peculiar stamp, particularly on me. Many have come to learn that one of Victor’s better skills is his nose for imprudence and neglect. He can almost smell poor judgment. But in addition to the ability to recognize the lapse, he’s also willing to exploit it. Victor will go where others will not. I guess, in a sense, he serves a kind of evolutionary purpose—he culls the mindless herd, rids the mewing swarm of the sick, the lame, the weak. So most who can will testify that, yes, he’s left his mark. Whether it’s awe or fear or simple scorn, he’s graced us all with something, an imprint we recall. And beyond the elemental task of merely doing well, of beating whatever set of benchmarks are currently in vogue, his reward, I now believe, comes from simply being in the fray. From being in the game.

To that end, he runs an investment pool, a hedge fund. Comprised of limited partners—mostly pension funds and trusts, three or four foundations, the odd insurance firm—it’s an all-purpose type of vehicle, geared for flexibility, designed to capture things that run. Long or short, big or small, special situations. It’s a ballsy fund and it nicely compliments Victor’s somewhat jaded personality and his particular brand of dissonance.

A large chunk of the fund is devoted strictly to risk arbitrage—investing in mergers or takeovers before or after a deal is announced. The bets and the risks are large. Many tiny variables can influence an outcome. One insipid detail, seemingly benign, can blow a deal wide apart and wipe out a whole career.

I remember Victor saying once, You’re dealing with people here, complex human beings. So you know they’re bound to fuck it up.

Just south of the park, as we creep along with the late afternoon traffic, we retreat to our own thoughts. After a moment Victor turns, sees the troubled look upon my face. What? he asks.

It occurs to me that many of your relationships seem a little bit one sided.

The only relationship there was between ignorance and fate, he says. And one always affects the other, He slowly shakes his head. A kind of soft pallor washes over him. He lowers his eyes, his shoulders sag a bit, and he shows the stoic air of an old man weighing this strange world, humbled by the force that makes things turn, perhaps chastened by how things meet their end. He shakes his head again and says, softly, Stupid fuck.

That’s when it really hits me. I’m home. Hearing Victor’s mindless, abject, two-word phrase, which tends to favor nearly everyone—and to which many can connect him—for some stupid reason solidifies the fact. I’m home. Where I grew up, went to school, fell in love and married. A career. A family. A future. A life. All lost in a heartbeat. Just like that. A snap of the fingers. A clap of thunder. Just…gone.

Home. Two years ago I made a promise to myself that I would never set foot in this town again. Stupid fuck.

You think you were unprepared?

Unprepared?

For what you’d find, how you’d feel?

I was overwhelmed. Bombarded. Everywhere I went, everywhere I looked. I’d see a shop or a cafe, and this torrent of memory would simply swamp me. Even the smell of the city was evocative. And I couldn’t stop it. It enveloped me, swept me up and spiraled me right back into that black hole. And I welcomed it. I embraced it. I wallowed in it.

That’s because you’re an addict. Despair is a drug. But you already know that, don’t you?

I thought I could shake it. I really did. I thought by going back home, maybe I could finally let it go. Let her go. But I couldn’t do it. And from the very first day, I started to question my reasons for being there.

Come on, you went home for one reason, and only one reason, and it wasn’t to do a job. It was to end it. It was to end your pain.

Yes.

And that wasn’t the first time, was it?

No.

No. At one point, well before returning home, you attempted to address that little dilemma in a particularly visceral way.

So?

So I understand. When there’s no way forward and there is no point. There’s only that pain.

Yes.

But you did move forward and you did find some point. Because you still had faith.

In what?

I don’t know. Yourself. Your friends. Your work. Whatever. Maybe even God.

The last thing I had faith in was God. What kind of benevolent God casts a man down whose only sin is happiness?

"So what’s it been? Victor asks, deftly changing stride. We’re almost at a dead stop in the evening traffic. A couple of years? To what do we owe? You in town for a romp? A little pillage and plunder? His gray eyes narrow. You here to do some damage?"

I haven’t yet decided, I tell him bravely, as if my fate were in my hands.

Well, he quips, maybe I can help. Maybe I can put together something special. There’s a flicker of a smile. Maybe something you can really make a mess of.

Gee, I didn’t get you anything.

Or maybe you’re here to do a little of that financial sleuthing, the kind for which you are so well known.

I let a circumspect expression drift across my face.

It’s okay, he says. I can keep a secret. He feigns a smile.

Something about that bothers me. You ok? I ask him. I know he’s been under some pressure.

Nothing I can’t handle, he replies. They’re not storming the gates just yet.

Recently I’ve heard that Victor is in trouble, and that several of his partners have threatened to pull out if things don’t improve. Victor, always sanguine, says that’s nonsense. He puts that down to the invidious machinations of some of the Street’s more prominent liars, beggars, and thieves (which, we know, doesn’t do much to narrow the field). Still, there are those rumblings.

The past year, it’s true, has not been kind. In addition to a lack of deals, the fund had significant exposure to two proposed transactions that eventually collapsed, taking roughly 20% of the fund’s equity with them. A loss of nearly sixty million dollars. But Victor’s been here before and folding under pressure is just not his style. In a show of some bravado, he recently fired off a curt memo to the partners—directed primarily at those pesky pension guys—effectively demonstrating that the term risk arbitrage is called that for a reason.

I, myself a limited partner, having placed nearly everything I own in Victor’s wayward care, am well aware of his travails and am not the least concerned. I know what he is capable of. Plus I still believe in dated concepts like loyalty and trust. And then, of course, there is the fact that he’s always been there for me. He was at my side when I married Katie, and he was at my side when we put her in the ground. He’s the closest thing to a father I’ve ever had. I won’t desert him now. I will honor and defend him because that is what we do.

I now look at him judiciously. I know you’ll figure it out, I say. But I also know that sometimes people under siege do lots of crazy shit. I mean that to reflect my own personal experience, but in some way it makes an impact, catches Victor’s eye like a diamond glinting in the sun.

His response, however, throws me. You mean like Roland Ryberg? he says, as if the name just sort of came to him—all innocence and light. He’s referring to the president and CEO of SGA Industries Inc., a diversified conglomerate, which is currently the subject of a hostile takeover by a man named Lymon Broz, and the very reason I am here—something which Victor no doubt has already surmised. The raid has been a fixture in the press the last few weeks, and Victor’s query is more than happenstance. His antennae are up and on.

You’ve heard something? I ask.

"The odd rumor,’ he says.

On Wall Street?

Go figure.

"So what’s the word?

"Just tomorrow’s headline: Ryberg Dumps Assets, Saves His Fat Ass."

No way.

That gets me a look. What, he says, hocking the jewels to hang on to perks is no longer in vogue?

Not in this lifetime, I tell him. Not with that Board.

What makes you so sure?

Have you seen these guys? They make noises like practical folk. Some of them actually believe they have some kind of fiduciary duty to the stockholders.

Those fucking guys. They’re gonna get sheared.

Meaning what?

He lifts an eyebrow, a cryptic gesture I find difficult to read. Let’s just say I’ve got a hunch.

I’ve known Victor long enough to fully believe that airy things like hunches have no place in anything he does. Still, I decide not to press.

What’s the story with this Broz character? I ask him.

We’re beginning to think he has no long term plans.

Really?

We think he’s looking to take it apart.

Hmm I mumble. You don’t make a lot of friends that way.

"I don’t think that’s a major concern. Like I said, we’ve been hearing some things, some real Kamikaze type shit. The tag Broz the Butcher is now making rounds. Kind of catchy, huh?"

Lovely, I say. Where does this shit come from?

Victor offers up a little shrug, but it’s kind of hazy and oblique—vintage Victor Dennis. He wants me to know that he still has an inside track, a certain edge that will always be just outside my reach.

What does the smart money think? I wonder.

That gets a laugh. You think anyone has a lock on this guy? Up until two months ago nobody ever heard of him. This guy is a nobody, from nowhere. I think that kind of trash talk serves only one purpose—to scare the hell out of people. It’s so obvious it’s laughable.

How so?

Come on. Unless this troll Broz is a complete fucking dolt—an open question to be sure—I’ve got to think that most of that stuff comes right out of that big corner office over at SGA.

You thing Ryberg’s that sharp?

He gives me a look that leads me to believe that he has a whole bag full of doubts—a face a father might offer to a dim-witted son who’s just said something remarkably bright. I think it’s safe to assume, he says, "that he’s getting some help. He’s using tried and true means. You know, rally the troops with a large common threat, an imminent scourge. Make the guy out to be a monster, a villain. A lawyer. Anything from which people instinctively recoil. Brand him a demon and people respond. And the best thing for Ryberg is that he’s working with clay. He’s got a blank fucking canvas. He catches the question on my face. No one knows shit about this guy from the sticks. Ryberg can paint him whatever color he wants."

Pretty risky, I offer. That’s a double-edged sword, to say nothing of the legal ramifications.

At that Victor’s expression instantly gels, goes from smoky gray glass to implacable steel. Well so far, he says, no one’s had the balls to put that to the test. A rather notable failure, wouldn’t you say?

I don’t follow.

You’re not paying attention, Seth. It seems our little would-be raider has dropped the ball. And for all I know, he’s completely off the field. Lymon Broz hasn’t uttered one word in public since he submitted his bid. You’d think he’d have an interest in quelling that stuff. Stupid little fuck.

Victor’s assessment of the human condition aside, that sparks my curiosity. It makes me wonder if Victor has an interest here that he’s not to keen to share. Suddenly something doesn’t feel right. Our little would-be raider. An odd choice of words.

Perhaps, he now says quietly, less edge to his tone, we need to have a little chat, old Lymon and me. He turns to his own window. About procedure and tactics. Maybe a little lesson in basic etiquette.

I find the comment a bit much, arrogant and presumptive, and without thinking I say, You know him? regretting it at once. My next thought and hope is that somehow he missed that. He’s still facing the window and I can’t read his face. But when he swings my way, and I catch that raptor look of his, all my confidence instantly evaporates. And suddenly I’m adrift, swimming in a lifeless sea of brine of Victor’s creation, and he’s the only one I can look to for some kind of stupid lifeline. I’ve been in this swamp before and it’s nearly unbearable. Well, whatever the case, I press on, there may be other possibilities. I glance at him furtively. He simply may not care. Maybe he could give a shit about the rumors and the rest.

Victor shakes his head. Come on man, you’ve got to capture hearts and minds, sway the clan, show them who you are. You know that. You’ve got to get people on your side.

Not, I say, if the price is right.

Victor seems to like that. He smiles broadly. I’ve taught you well, my son. People become very flexible when they perceive value, don’t they?

We’ve seen that more than once. I laugh. Though it does beg the question. What constitutes value? How much is enough? Is it fair? Is it right?

He leans over and pats me on the knee. I’m guessing that’s why you’re here, my friend. To answer just those kinds of questions.

What makes you think that?

Don’t be coy. It’s no secret that you and Marvin Hewitt are friends. And he just happens to be…Oh yes, Chairman of SGA’s Board. And quite possibly one of the most influential outside directors extant.

"You are unbelievable."

"No shit.

I’m not a player here. I have no role whatsoever.

Sure.

Look, Marvin calls me up, says he needs some help. He tells me there’s an offer on the table and he needs a little input, maybe a suggestion. I recommend a firm that can act as an advisor, put together an opinion, but that’s not what he wants from me. He just wants me by his side. As an observer and a friend. Nothing more. I balk, of course, but he pushed pretty hard. And I owe the man. He did help seed my business, remember? What else can I do?

A strange look passes over Victor’s face. "Maybe Marvin has something else in mind. Another little job. A different kind of job."

Like what? I ask him.

Maybe he wants you to kill Lymon Broz.

You think?

It would certainly send a message.

We begin to laugh. A poison pill? I ask. "With real fucking poison?"

Oooh, he breathes. I like that. I like that a lot. It’s so…progressive. A new gilded age of corporate defense!

Come on.

No, wait! This is good.

And I can see it on his weathered face, those errant wheels turning, his swift intellect at work: cause, effect, possibilities and outcomes. I can’t help myself—the whim takes hold and the laughter tumbles out of me. And it’s exactly what I need right then.

We catch a breath, and I glance over at Victor. He looks to be contemplating something only he can see. He’s still smiling but it’s a different kind of smile now, darker, almost malevolent, and I note that the light in his eyes has shifted as well. Suddenly I feel cold. A small shiver runs through me, and then it