A Killing on Wall Street: An... | Buy

PRAISE FOR A Killing on Wall Street "Derrick Niederman brings special qualities to his novel: He is funny, smart, and imparts to A Killing on Wall Street a wicked, jaundiced eye and an insider2s ability to both educate and amuse." -John Spooner investment advisor and bestselling author of Confessions of a Stockbroker "Derrick Niederman2s A Killing on Wall Street is at the same time an absorbing whodunit and a textbook for Investment Finance 101, written with witty dialogue, and not without puns, anagrams, and one or two references that escaped this reader who remembers 1929." -Charles P. Kindleberger Ford International Professor of Economics, MIT Emeritus; author of Manias, Panics and Crashes: A History of Financial Crises "A Killing on Wall Street grabs you from page one and won2t let you go until the final word. Intrigue, insight, and passion combine for a rocketship read. If Derrick Niederman were a stock, I2d be buying." -Keith Ablow author of Denial and Projection

Derrick Niederman, PhD, is a mathematician turned securities analyst, an investment and mystery author, and a life master at bridge. He was a contributing editor at Worth magazine and is the author of The Inner Game of Investing (Wiley).

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Chapter One

Would you pay $59.98 a month for a phone that never rang? That's the question Cliff Cavanaugh was asking himself. Never mind that his extra line was programmed to ring like the Hawaii Five-O theme song. For now, all he got was "The Sounds of Silence," which was lousy for Cliff but good, in a way, for the Wall Street population as a whole.

Cliff Cavanaugh was fifteen years into the Compound W of investment careers. Everywhere he went, he met up with a big fat wart. He had managed to be one of the few genuinely miserable stock-brokers of the 1980s, all because he hadn't foreseen three wart-like occupational hazards. Wart number one: Building a client base by sucking up to rich people. Wart number two: Realizing that the people whose money you manage want a hand-holder, not a money manager. Wart number three: Discovering that none of your colleagues loses one minute of sleep worrying about warts one and two.

When the mid-'90s arrived, Cliff figured he was ready to put his stockpicking skills to work as an online trader. No more office politics. No more armpit views of Manhattan on the 7: 00 A. M. IRT. It was just man and machine this time around, and he was a smash success, at least by the traditional standard of dollars and cents. He had been racking up 40 percent per year on his personal nest egg while incurring next to nothing in brokerage charges.

Alas, that was the problem. Put a buy-and-hold mindset on a day trader's timetable and you get a hybrid with the functionality of a centaur. A really bored centaur. Other traders cured their boredom by shorting Microsoft or buying futures on the Thailand baht, which is to say that losing money quickly does more for your adrenaline than making money slowly. But Cliff knew that his excitement had to come from a different source. A lemonade stand on the autobahn would be an improvement. He was holding out for more.

Cliff 's new lot in life began at an investment analysts' luncheon at the Waldorf, in the fall of 1998. He found himself trapped at the same table with August (" Augie") Beauchamp, a part-time portfolio manager and full-time name-dropper at Frontier Associates, a mid-town boutique that managed equity portfolios for college endowments and other such institutions. Frontier had been all over the news, and not because of its wizardry with 401( k) plans. Less than a week earlier, its media analyst, Schuyler Dutton, had been beaten to death in his East Side condo. You heard right. Murdered. In cold blood. By some anonymous killer nicknamed "Bamm-Bamm" by The New York Post . The crime stood out not only for its locale--a posh bungalow at 89th and Madison--but also because it occurred in the early morning, not exactly prime time in the world of bludgeoneers.

Anyway, when Cliff offered his personal condolences, Beauchamp promptly boasted that he had seen George Soros that very morning, near Rockefeller Center. Amazing. A colleague of his gets snuffed out and all he can think about is sharing sidewalks with his personal hero, Mister Quantum Fund himself. It seems that Soros had appeared on the Today show--plugging his book, The Crisis of Global Capitalism --at almost precisely the time that Dutton was being murdered some 50 blocks away. That's what Beauchamp said, anyway, at which point Cliff broke into the coldest sweat he'd ever felt outside the hepatitis ward.

It's not that Cliff was impressed that Beauchamp had seen Soros. No, that wasn't it at all. What Cliff knew--and Augie evidently did not--was that George Soros, for all his dabbling in foreign exchange markets, isn't a morning person. He doesn't get up to walk his dog or check what's going on in Zurich, and there's no way in hell he'd get up to appear on Today or anything else.

It didn't take more than a quick call to NBC for Cliff to confirm his suspicions. Oh, Soros had been on the show that morning all right, but the segment had been taped the prior afternoon, at the great man's insistence. So much for Augie's pathetic alibi. And too bad for him that the cops had found Schuyler Dutton's TV tuned to NBC, Channel 4, just the way he left it. Case closed.

Cracking the Dutton murder was a nice feather in Cliff 's cap. It got him a front-page photo in The New York Post ("Famous shamus!"), and even an appearance on the Today show. (He asked if they would consider taping the segment the day before. They said no.) The capper was some serious reward money from Frontier Associates, which Cliff considered a payback of sorts for his years of aimless deposits into the Cavanaugh trivia bank. The whole episode got his mind to thinking, "I wonder, could I do this again?" On purpose, no less.

The betting man's answer was an emphatic No, but Cliff wasn't so sure. The simple yet largely unknown truth was that with the long bull market had come wealth, with wealth had come greed, with greed had come envy, and with all of those things had come a noticeable spike in the homicide rate among the well-to-do. Investment types still didn't get knocked off very often, mind you, but when they did, the firms loathed the bad publicity. Better still, they had oodles of money at their disposal to hire their own investigator--never mind the allegedly round-the-clock efforts of New York's finest. If they wanted a quick solution, Cliff didn't see why he couldn't be their go-to guy. He had a spotless track record, didn't he? He went so far as to give his fledgling business a name of its own: Moribund Stanley.

Which brings us back to the phone. Fast forward to February 2000. Hawaii Five-O was ringing for real. There was no wrong number this time, not even an overzealous telemarketer. This call conveyed word of a victim who was no ordinary victim. The decedent was none other than Kyle Hooperman, portfolio manager extraordinaire, philanthropist, mountain climber, social climber, and charter member of the Westchester Hunting Club.

And one more thing: He was Cliff Cavanaugh's former boss.

The case of Kyle Hooperman actually had one similarity to the Dutton case: the victim was found at home. Home for Hooperman was in the suburbs. He lived by himself in a magnificent old stone house on Oneida Road in Rye, New York, tucked in an exclusive residential neighborhood that was literally full of doctors, lawyers, and Indian chiefs. The adjoining streets had names like Seneca, Cayuga, and Onondaga. Nearby was an old-line country club called the Apawamis Club. A few hundred yards in the other direction were Route 95 and the Rye train station.

There were no signs of breaking and entering, so it was assumed that Hooperman knew his assailant. But unlike Dutton, who had been struck from behind, Hooperman was apparently a witness to his last moments on earth. The cause of death was a single shot from a Colt Government Model .380 handgun. The bullet had struck Hooperman just below the heart, perhaps explaining why the killer didn't bother with any additional rounds. One one thousand, two one thousand, and out.

Fittingly, the crime scene suggested that Hooperman was working until the bitter end. On the computer screen in front of his body was a Hoover's research report for a company with the ironic name of 3-D Live. Hooperman didn't even own the stock, which suggested that he was looking to the future even when he had no future. From the coroner's findings, he didn't make it much past 8: 00 P. M. on the evening of Thursday, February 24, 2000.

And who might have committed such a dastardly deed? The list of names was the good news. Hooperman had garnered plenty of rivals during his years in the money management field. He was good at what he did, plus he was outspoken, arrogant, and combined the tact of an armadillo with the smugness of a CNBC anchorperson. Anyway, that was the book on him at his longtime employer, Rutherford & Hayes, which, now that Goldman Sachs had gone public, was the last privately owned goliath on Wall Street. Hooperman oversaw much of the retail brokerage operation even as he juggled his own set of a hundred or so clients.

The bad news is that most of these clients figured to be happy. Hooperman was Rutherford & Hayes's answer to King Midas, and he made a mockery of the notion that the best portfolio managers end up managing money for institutions rather than individuals. There was some faint evidence that Hooperman might have lost a step or two, and Cliff found consolation in that. Plus, there was the fact that all it took was one person, pulling the trigger once. But if he was going to sift through a bunch of clients, brokers, portfolio managers, or just plain no-goodniks to find his needle in the haystack, he was going to need some help.