Arbitrage Read online

  What hadn’t changed was working hard to get results. First at school, with nights spent on books, and then in the office. Ryan never stopped for a moment to reflect on life. That would have put more fear into him than death itself; since he had been a student, he had done everything in his power to avoid that question. After a day of studying came the revelry and drunkenness at night with other students, the parties … However, he always managed to not get into trouble. Not with the police, at least. With the bottle, it was quite another matter. Once he started working for Saunders, Whitehall & Passmore things hadn’t changed much. He lived to excess, a candle burning too fast under the night breeze, and often he found himself sleeping in the office, after a night of partying, alcohol, and strippers.

  Logan had a reserved parking space, right under the building of Saunders, Whitehall & Passmore, abbreviated as Sandie, a privilege that no one else could boast at the age of thirty-four. The fact was that Logan was damn good at his job. A genius, according to colleagues, even those who didn’t like him much.

  ‘Good morning, Mr Logan,’ said the security guard as soon as he saw him entering the building. ‘Today you are earlier than usual.’

  ‘I came across very little traffic; maybe because of the fog. How are Mike and Simon?’

  ‘Fine, thank you. Simon starts school today; luckily, I am doing the night shift, my wife phoned me and said that the little one raised hell. He just didn’t want to go to school. Must have got that from his father.’

  ‘Ah, yes, school, time passes quickly,’ said Logan, ‘nothing to worry about, they will love every minute of it.’ Logan had an innate ability to remember insignificant details, like the names of the security guard’s sons. He could never know when an aspect could come in handy in his trade, so he tended to remember everything. He didn’t really care about all those details, but he knew they were the key to opening doors that otherwise would remain inexorably closed.

  ‘Do you have kids of your own?’ asked the man.

  ‘Who, me? No, I don’t have time, but I was a kid once. I speak from personal experience,’ Logan said.

  ‘Today’s newspapers are by the lift,’ said the security officer. He knew the rules, chatting was allowed, but on this occasion, he had stepped too far. Never ask for personal details, especially of one of the partners. He could have lost his job for doing so.

  Logan took a copy of the Financial Times and glanced at the headlines waiting for the elevator to reach the floor, ignoring that invasion of privacy.

  ****

  ‘Good morning, slaves,’ Logan said to a group of employees who had spent the night at the office. They were all recent graduates looking for success otherwise, they wouldn’t voluntarily submit themselves to the torture of that job. Some would have thrown in the towel, many would remain employed with no real career perspective, others would seek work elsewhere after a few years of hard work under their belt. That was the price to pay, working a hundred hours a week, bill as many hours as they could, and then go somewhere else, and the company knew that. In fact, they had a high turnover, but newcomers looking for their dream job would replace them, in due time. The most tenacious would remain and, after their fair share of backstabbing, lying, elbowing, they would become partners, the same as Logan.

  ‘Good morning, Mr Logan,’ they replied in chorus.

  ‘Today’s mail, Mr Logan,’ said the secretary, a brunette in her thirties, trotting behind him trying to keep pace.

  Logan gave a look at the letters and threw them in a rubbish bin.

  ‘Mr Saunders asked if you could join him as soon as possible in his office, and you have a nine-thirty meeting with the Globalstar Financial executives.’ The secretary went on regurgitating appointments and deadlines without Logan paying any attention. He was sitting at his desk, back to the enormous glass window from where he could see the skyline of the City, and he opened the Financial Times. Logan preferred to take the day as it came, one appointment after the other, without having to prepare. His memory was photographic and he didn’t need much preparation before a business meeting. A quick glance at the files would trigger a flood of information in his brain.

  The Moleskine notebook, which he kept in his bag, contained a sentence or an evocative image for each customer, which would unleash a stream of uninterrupted memories, in case any of the partners asked about a particular customer.

  He would not move from his desk before having his second morning coffee, which, according to tradition, would arrive there within three minutes.

  The phone rang. ‘Where the fuck are you, Ryan?’ thundered the gruff voice of Newsham Saunders.

  ‘At my desk and I still haven’t finished my coffee. What’s going on?’

  ‘Get off your ass and come to my office, we need to talk!’ And then Newsham broke off communication.

  A wasted coffee. Upon leaving the office, Ryan shouted, ‘Slaves! I need a two hundred and fifty-page report on the taxation ambiguity in Panama. For this afternoon.’ An unnecessary task that had already been completed a year earlier, but by different slaves. Some pressure would keep the newbies guessing.

  He entered Saunders’ office without knocking. Whenever he entered, a tightness gripped him; the thick mouse grey carpets, three centimetres thick almost resembled a rug, the aluminium windows and the white panels of the ceiling were in stark contrast with the furniture. An antique desk in cherry wood with green skin insert, a Victorian relic for sure. On the walls, there were a mixture of abstract paintings and an ancient eighteenth-century portrait of a nobleman with a sword, definitely not connected to the occupier; a Japanese cabinet with flamingos in relief; a library with a collection of legal books, probably never read, next to a collection of cricket bats. Every time Logan put a foot in that place, he had the feeling of entering a pirate’s quarterdeck. A mountain of valuables, which didn’t have any relationship to one another because they were the result of raids; nor had anything to do with the current owner, for that matter. They didn’t say anything about the owner except cry out bad taste and a lack of style. Logan sat on a black leather chair right in front of the desk.

  ‘So, what’s the rush?’ asked Logan.

  Saunders was head bowed on the desk, trying to separate a little pile of cocaine into several strips with a razor blade. Then he pulled a gold tube from his breast pocket and inhaled the contents through his nose; he looked toward the ceiling and the white panels and then sighed.

  ‘Oh, Ryan, we are expanding,’ said Saunders.

  ‘Sure, the awakening of the Kundalini. You know that to refine the cocaine they use kerosene? Tell it to your pituitary gland and to the third eye chakra that it’s all an illusion unleashed by the chemistry of the Colombian jungle.’

  ‘Ah, ah, Ryan, you’re funny. No, we are not expanding the consciences today, or at the very least, it’s not the primary goal. We expand us, a merger.’

  Logan held back a couple of comments about his partner burning out his brain, but he merely complied without saying a word. He wouldn’t have fallen for the old trick of throwing a bomb of information and then wait in silence for a reaction. Saunders was the first to speak.

  ‘We are in an era of changes,’ the partner said, after having suitably rubbed his nose on the sleeve of his tailored jacket. ‘Either we evolve, or we die, we have to be laser-focused on success, we expect paradigm shifts …’

  ‘Without forgetting the innovative disintermediation of the markets and transforming the collaborative niches,’ said Logan knowing full well that Saunders was hopeless in the field of irony.

  ‘There, you see that you follow me? Well done, Ryan, I knew that we were right to give you the partnership. In October there will be the Big Bang of the stock market, with deregulation promised by Thatcher. I’ve spoken to the other two senior partners, and we want a piece of the pie.’

  ‘We are lawyers, Newsham, not bankers. We bill hours, we find financial loopholes, we take a percentage, and everyone is happy. No risk involved,’ said
Logan.

  ‘I know, but this opportunity is too tempting. We are talking here about millions of pounds in commissions, we just need a partner who already works in the field, we will merge, and we are ready to make the big leap. Think about it, if we get in business with a bank or a brokerage firm, we could share large clients, expand even in the legal sector …’

  ‘Create synergies,’ Logan completed the partner’s sentence. ‘We already have good clients, and we’re squeezing them like lemons.’

  ‘Ryan, this is a unique opportunity.’

  ‘No this is a colossal fiasco in the making. You made me a partner because I understand finance better than all of you put together. I don’t like this idea, and I will oppose it with all my will. My department is the one who brings in the real money in this firm, the one that makes you rich, the one that makes the difference between buying a forty-five-foot sailboat and a hundred and thirty-one. You should remember that.’

  Saunders wasn’t frightened by Logan’s harsh words, and instead, he continued, ‘Let’s do it this way, prepare me a report on Mortcombe Bank. Dig, make one of your spells, discover, investigate, go and talk to Mortcombe himself. We did some early private negotiations, and everything we found looks promising, but we must not forget due diligence,’ said Saunders and then pushed himself headlong into the cocaine.

  As soon as Logan exited the office, Passmore, the second senior partner entered the room.

  ‘I told you Logan would pose a problem.’

  ‘I’m not worried about Logan. If the merger goes ahead his department won’t be as important anymore, we could even do without him.’

  Passmore nodded. It wasn’t one of his battles, not anymore. At that point, he was only counting the days separating him from his deserved retirement. Let Saunders deal with it. His only objective was to keep his bottom glued to his chair until the merger was done and dusted, get his rich bonus and a golden handshake. He would retire happy.

  The Mortcombe Bank. Who in hell had ever heard of it before? thought Logan.

  CHAPTER 2

  1989

  The Mortcombe Bank building was located in the centre of Brighton, not far from Regency Square. A nontraditional choice for a banking institution, far from any financial route in the rest of England. What was the headquarters of a bank doing right on the seafront in a tourist town? Of course, that area had become fashionable, prices were skyrocketing, and bars and restaurants grew like mushrooms after rain. An ideal place for retirees and young people in search of freedom and a joint to smoke, but a bank?

  Logan parked his car in front of the building and lit a cigarette. The architect had been busy, on that there was no doubt, the construction was made of glass and steel and reflected the morning sun on that spring day. The walls were curved, and Logan speculated that the building could look like a four-leaf clover if viewed from above. An anonymous bank, with funds to throw away and based in an inappropriate location. Not to mention the eyesore that that structure represented, surrounded by Victorian houses. He reserved his judgment for after he had been able to analyse the financial aspects. The numbers never lied.

  Logan threw the half-smoked cigarette on the pavement and put it out with the point of his shoe. He entered the modern building, noting the wooden floors, and that the plants that adorned the entrance were cleverly arranged. Two receptionists waited at the front counter, both brunettes, with hair tied in ponytails. They didn’t seem to have much to do. They were attractive. Logan’s footsteps echoed in the half-empty lobby while heading towards the two women. He said his name and signed a register. They asked him to wait, and he sat on one of the grey cloth couches to the side of the reception area. The sofas were elegant but hard as marble. At least they weren’t cold. A couple of newspapers lay on a glass table in front of the couch. No brochures on what the bank did. No mortgages or bank account leaflets. Nothing. Every bank had them, happy faces of well-dressed young women who could now afford a mortgage. Men portrayed while discussing a loan with a friendly and smiling employee. Retirees glad to have put their entire savings in a safe place, while staring off into the horizon, dreaming of holidays in exotic countries after a life spent saving. None of this. Zero brochure.

  Another secretary came out from one of the elevators behind the front desk shortly afterwards. Logan had had time to look around, noticing that there was no sign of bank cashiers or any other typical components of a bank.

  ‘Mr Logan, Mr Mortcombe is waiting for you.’

  Logan got up and followed the woman up to an office on the second floor; everything in the building made him think about an abundance of money; the modern paintings on the walls, even in the hallways, some sculptures positioned to attract attention. It looked more like walking into a Tate Museum corridor, rather than being in a bank. Mortcombe occupied a corner office overlooking the waterfront. It was a very formal office, with modern furniture and defined and square lines. That ample space could have been considered minimalist, almost empty, except for a desk, positioned at least twenty feet from the entrance. A couple of sculptures, a single painting on the wall that Logan identified it as a Kandinsky. Maybe authentic. Maybe a copy. But judging by the lustre of that place, possibly genuine. A stack of dossiers was resting on the floor next to the desk. Maybe it was also a modern sculpture, Logan couldn’t decide.

  Mortcombe was a man of about thirty-five, not particularly tall; he was wearing a blue pinstriped tailored suit and a crimson tie; short, well-groomed hair and a pair of metallic glasses. He moved quickly and precisely, as one who was accustomed to playing sports. As soon as he entered, Logan saw his interlocutor get up and head towards him; a good sign, he thought, at least he’s not one of those assholes who pretend to be busy.

  They shook hands and Mortcombe went straight to the point. ‘Saunders must have informed you about the merger.’

  ‘Indeed he has. I know enough to find it’s a terrible idea,’ said Logan and without asking permission, he lit a cigarette.

  ‘There will be benefits for all of us, especially for you.’

  ‘Ah, exactly as I thought,’ said Logan, ‘you are a benefactor. I understand Saunders’ motivations; he is an ambitious and greedy bastard. The more he gains, the more cocaine he manages to squeeze into his nostrils. Your motivations are a little more obscure, though. Where did the money come from? I didn’t see half a customer during the ten minutes I waited in reception.’

  ‘Ah, but our customers are special,’ said Mortcombe with a fake smile on his face, ‘they are received in private offices, they certainly don’t go over the counter. And then they leave us to make decisions on how to invest.’

  Logan’s concerns grew even more significant, if nothing else, however, he had been able to observe his questioner closely. He looked around searching for an ashtray and, not finding one, he put out the cigarette inside a Chinese jar in front of him, probably Ming dynasty. It looked authentic. Mortcombe did not blink.

  ‘Do you have the financial documents I requested? I would like to take them back to the office today.’

  ‘Of course, I gave the order to take them down to the front desk. Someone will help you to load the documents into your car. Ryan … may I speak frankly?’ asked Mortcombe. Then, without waiting for an answer from Logan, he continued, ‘this merger will go ahead, with or without you. I remind you that you were made partner only recently and your words don’t mean shit. I’m not here to discuss strategies with you nor am I interested in your opinion. You wanted the financial statements? You can find them at reception, as far as I’m concerned you can read them or make paper aeroplanes with them, nothing will change.’

  The switch in Mortcombe’s behaviour was sudden. They had come to that. Saunders & Associates knew that Logan would have objected to the merger and instead of spending hours discussing the pros and cons, causing bad blood among them, threatening to say things that gentlemen shouldn’t voice, they had left the task to Mortcombe. A stranger.

  It was evident to Logan that M
ortcombe was not interested in hearing his reasons and this triggered alarm bells in his mind. Not that he was worried about his role in the new company, he had a list of wealthy clients, and if things were turned for the worse, he would love taking them with him. The inability to hear was a bad sign in business; vision and determination were necessary, for sure, Logan himself had never pulled back when he faced risks, but this was anything but. The reasons for the merger couldn’t be only economic in nature and jump to footer the due diligence activities were not a smart move. He would have done it for a client but not for the company he was working for.

  ‘I understand, I guess this meeting is over,’ Logan said finally. It wouldn’t make much sense, at that point, starting a battle between alpha males. He knew when it was time to remove the noise.

  ‘You bet your ass it is!’

  Logan got up and left the room without saying goodbye. He knew only too well he was being ambushed, strained by Saunders without his knowledge. That prick, Ryan thought. Saunders had no financial experience, he had been a criminal lawyer, but his strength lay in political and economic connections. Finding clients, convincing them, make them fork out vast amounts of money, but a merger like this? It was not up his street. It didn’t make any sense.

  Once he loaded the bundle of documents into the car, Logan departed in a hurry, leaving behind the gleaming building of Mortcombe Bank, and only then he realised what was wrong. The bank wouldn’t have needed to do a merger, thought Logan giving one last look at the building from the rear-view mirror; with that kind of money, they could have bought a Saunders, Whitehall & Passmore unflinchingly. If they could throw a hundred million for their headquarters, they could waste fifty odd million to buy themselves a law firm, although perhaps not as renowned as Sandie.

  Why? He wondered. Why, why, why?

  He was sure he would find the answer in the documentation from the bank and if that weren’t enough, he would trawl through every single file in Sandie’s archives.