Nincompoopery Redefined

Rep. Chris Collins is in major hot water, according to a recently unsealed 10-count, 30-page indictment from the U.S. Attorney for the Southern District of New York. Allegedly, Collins, from an upstate New York district near Buffalo, tipped off his son to inside information before it was publicly disclosed about the failed drug trial of an Australian biotech company’s only drug with any prospects of success.

Ironically, or sadly, or pathetically or outrageously, or all of the aforementioned, Collins was at the time the largest shareholder and a board member of the company, Innate Immunotheraputics Limited. He was also on a subcommittee of the Energy and Commerce Committee that oversees the healthcare and drug industries and had been under investigation for months by the Congressional Ethics Office as a result of serving on the company's board and promoting its prospects. To make matters worse, he allegedly lied to the FBI about the whole thing.

Whew. If all this is true, Collins is about the biggest nincompoop in Washington. (Well, maybe the second biggest.) That’s a photo of Collins at left from his Facebook page, showing him at a recent constituent event holding a plate of fried dough. Fried dough is exactly what he’ll be if the U.S. Attorney has the goods on him. And it sounds like it does.

The indictment says that after Collins’ tip his son, Cameron, sold almost 1.4 million shares of Innate in 54 trades starting the next morning, avoiding some $570,000 of losses he otherwise would have incurred when the stock tanked over 92% the day the failed drug trial was announced. Cameron is also under indictment for passing on the insider info to his fiancé’s father, Stephen Zarsky, his fiancé and other of their relatives and friends, who also sold their stock and avoided close to $200,000 in losses.

All that is documented in the indictment by emails, texts, phone records and stock trading data. That includes the email Collins got from Innate’s CEO saying the drug failed the trial while Collins was on the South Lawn of the White House attending the annual Congressional Picnic. It includes Collins’ email back saying, “Wow. How are these results even possible???” It also includes records of Collins’ frantic seven phone calls to Cameron, in the last of which he finally got through to him. Also the substance of a phone call from Zarsky to one of his tippees, a longstanding friend in which he said Cameron intended to buy a house so he would have an ostensible excuse for the timing of his trades if he were ever asked about them (Cameron is also indicted for lying to the FBI). Ditto a press release Collins had his staff release, stating that Cameron sold his stock only after a halt on its trading had been lifted, and at “substantial financial loss.”

Collins & Son and Zarsky are all named in the indictment that alludes to six other unindicted co-conspirators (Zarsky’s wife, daughter, two brothers and that longstanding friend, and a friend of Cameron and his fiancé). I stress unindicted, because if the U.S. Attorney’s previous modus operandi—and that of any other methodical prosecutor—is any guide, it started at the bottom and got the six minnows to flip by squeezing them into ratting out the bigger fish.

One of my first novels, Bull Street, is about an insider trading ring, and I never would have put a character in it who behaved as idiotically as Collins is alleged to because nobody would believe it.

A few years ago I wrote a blog entitled You Can't Make This Stuff Up on the psychology of insider traders based on my experience on Wall Street. They seem to have no shame or no memory of previous convictions for the crime. The practice will go on forever.

And they’ll keep getting caught. The U.S. Attorney for the Southern district of New York has a winning record in getting convictions for insider trading. They’re the guys who sent Ivan Boesky, Marty Siegel, Dennis Levine and Mike Milken to jail in the 1980s. Preet Bharara, the previous U.S. Attorney for the Southern District of New York, won over 85 insider trading cases in a row at one point. They don’t go to a grand jury unless they’ve got the goods. Collins’ tip to his son occurred over a year ago, the FBI took until April of this year to interview Collins & Son and Zarsky, and the U.S. Attorney until now to indict them. They’re efficient, systematic and relentless. Usually when they surface, where there’s smoke there’s fire.

In the few days since his indictment, Collins has been kicked off the Energy and Commerce Committee and suspended his re-election campaign for his House seat in November. “Meritless,” is what Collins has called the charges. We’ll see. Unless Collins has redefined the word.

He may also have redefined the word “nincompoopery.”

Bull Street - My White Collar Crime Thriller #1

Bull Street is the first of my White Collar Crime Thrillers. It's the story of Richard Blum, a freshly-minted MBA who goes to Wall Street as a naive, novice investment banker and soon discovers he’s landed smack in the middle of an insider-trading ring. As Richard peels away the layers of the skulduggery he's uncovered, he finds out that all the insider trading surrounds the deals of his firm’s largest client, Harold Milner. Milner is the takeover maven of his generation who Richard has idolized for years. In fact, on Richard’s first big deal on the Street, Milner has taken him under his wing. So Richard can’t believe Milner is involved in the insider trading, but stops short when he thinks of telling Milner what he’s discovered.

What if Milner is part of the ring? What if he isn’t but if Richard’s disclosure to Milner leaks to the traders and triggers them to come after him because he knows too much? And then what about the Feds he finds out are sniffing around? Will the footprints he’s left with his own digging cause the Feds to think he’s a participant in the ring and put him in their crosshairs?

Not only does Bull Street have those thriller elements, it's a coming of age story about Wall Street told from an insider's perspective. That's because I wrote the first draft of it when I was a freshly-minted MBA who landed on Wall Street as a naive, novice investment banker. As such, the novel includes many of my jarring learning experiences as I cut my teeth in Wall Street's sharp-elbowed world. I started my career there in an era that saw major insider trading and securities fraud scandals: the likes of Ivan Boesky, Marty Siegel, Dennis Levine and Mike Milken paid huge fines and went to jail in those days.

And so among the usual outsized personalities, misfits and oddballs I encountered in my early days on Wall Street, I also met a number of crooks from that era, a few of them high-profile. Bull Street is fiction, but the grandiose egos, the bare-knuckles negotiating tactics and the questionable ethics of many of the men and women of Wall Street portrayed in the book are true to life.

I hope you’ll give Bull Street a try. It's the first of my White Collar Crime Thrillers, and like all of the books in the series, it offers a window into the world of Wall Street’s financial gamesmanship from the perspective of one who’s been there.

Read a sample

Buy Bull Street: Buy US  Buy UK

Visit David Lender's Website

You Can’t Make This Stuff Up

Preet Bharara, U.S. Attorney for the Southern District of New York, was on a roll until earlier this month.  He’d successfully prosecuted 85 insider trading cases, including sending Raj Rajaratnam, head of the Galleon Group of hedge funds, to jail for 11 years.  This month, Bharara lost against Rajaratnam’s younger brother, Rengan.  He lost in part because the judge threw out two insider trading counts, and along with them much of the evidence.  Commentators suggest that evidence would've caused jurors to convict Rengan if they had been allowed to hear it.

Still, think about it: 85 to 1.  That’s an amazing batting average.  It’s also startling that Bharara had 85 cases for which he was able to amass enough evidence that he could prosecute them.

I can remember back to a time when, as a young investment banker in the 1980s, I thought I'd seen everything with insider trading cases.  That was during the era when Rudy Giuliani had Bharara’s job as top Wall Street prosecutor.  It was the era when Ivan Boesky paid a $100 million fine and went to jail for trading on inside information.  When Dennis Levine got sent up the river for trading on inside information on his investment banking firm‘s deals, and for cutting his friends in on the action.  When Marty Siegel, who had tipped Boesky on his firm's deals—and took a (big) briefcase containing $700,000 in cash from Boesky for it one night—went to jail and lost everything in fines.  When Mike Milken paid a $600 million fine as part of a plea bargain on securities and tax violations.

In those days I was naïve enough to think that after that era’s firestorm of public outrage, fines and the perp walks that Giuliani invented—dragging traders out of their offices in handcuffs, or from their apartments at 6 a.m. to the sound of press cameras snapping away—that anybody with a brain would know the rewards for stepping over the line weren’t worth the penalties if you got caught.

It didn't take me long to get slapped awake to the fact that it's all part of human nature.  The combination of old-fashioned greed and thinking you're smarter than anybody else is a powerful cocktail that can induce entranced walks to the dark side.  People can’t help themselves.

I was still working on Wall Street when I started writing novels.  I relied on my experiences for most of my material, but I made up a lot of it.  In one of my early novels, Bull Street, I had the Feds use wiretaps to catch insider traders, a technique until then reserved for trying to snare Mafia dons.  Recently, wiretaps were an essential weapon in Bharara 's arsenal in bringing down Rajaratnam and his co-conspirators.  Also in Bull Street, I had the SEC use a sophisticated MarketWatch computer program, run on Cray supercomputers, to analyze an insider trading ring’s stock trades.  That’s the equivalent of a hand-held calculator compared to what the Feds are using today against insider trading activity.

In my current novel, Spin Move, John Rudiger is a fugitive financier living in Antigua, who was tricked out of $30 million by an ex-girlfriend, Katie Dolan.  As he's running out of money and the local officials are insisting on ever more exorbitant bribes to keep his alias intact, does he decide it's time to go straight?  Does he go back to the States and turn himself in, do his time?  Nope.  He's still hot for Katie, so it's natural he'd look for her, but that $30 million is also on his mind.  And when he finds out a conman has swindled her out of it, he uses all his skills to come up with an elaborate scam to get it back.  He can't help it.

In my recent novel, Mickey Outside, Mickey Steinberg is getting out of a cushy white-collar federal prison camp after a slap-on-the-wrist sentence because he turned state's evidence.  His short sentence notwithstanding, he's been stripped of his securities licenses, banned from Wall Street for life, divorced by his wife and he's broke.  Has he learned his lesson?  He hatches a scam with another ex-con to sell a near-perfect forgery of a stolen van Gogh masterpiece in the shadowy underground market for stolen art.  Human nature.

I'm not going to spoil Mickey Outside for you, but there's a point where Mickey has to decide if he stays on the other side of the line or goes straight.  What does he do?

Somebody who's read my earlier Rudiger Stories with my John Rudiger character, called a book to my attention entitled How to Become a Professional Con Artist.  It’s an eye-opener.  I knew that Three Card Monte wasn't invented on the streets of New York in the 1980s, but I had no idea that scams like the Pigeon Drop, Change Raising, the Lotto Scam, the Oak Tree Game, or the Double-Play had been around for centuries.

So I guess I'm never going to run out of material as long as human beings are greedy enough to cheat, and suckers are equally greedy enough to allow themselves to get duped by con artists.  You can’t make this stuff up; you don’t have to.

The Theft of the Mona Lisa

In 1911, an Argentinian con man, the Marques Eduardo de Valifierno, came up with the idea for the signature scam of his life: the theft of the Mona Lisa.

But that was only half of it.  The other half was that, before the theft, he commissioned a famous French art forger named Yves Chaudron to paint six perfect copies of the Mona Lisa and had them shipped to different cities around the world.

Next, de Valifierno hired an Italian carpenter working in the Lourve Museum named Vincenzo Peruggia to steal the Mona Lisa.  On the day of the theft, Peruggia hid in a broom closet until closing, then stepped out of his closet and lifted the Mona Lisa off the wall.  He hid it under his smock and simply walked out of the museum.

After the sensational publicity about the theft, de Valifierno lined up six wealthy art buyers who fell all over themselves to buy his copies for millions, each thinking they’d bought the genuine article.

Peruggia hid the original in the false bottom of a chest in his spartan Paris apartment for two years until the Paris police dragnet ran its course.  Then he took it back to Italy with him.  Once there, he contacted a Florentine art dealer, Alfredo Geri, saying he had the Mona Lisa and wanted to sell it. Geri agreed to meet Peruggia, bringing the director of the Uffizi Gallery with him to authenticate the painting.  Once Geri knew he was looking at the real thing, he phoned the police and Peruggia was arrested.  By the time the world learned that the Mona Lisa had been recovered, de Valifierno had disappeared and it was too late for the buyers of his forgeries to do anything about it.

Some of that story is true, at least the part about Peruggia stealing the Mona Lisa in 1911, his means of accomplishing it, the fact he tried to resell it two years later and his arrest for it.  The stuff about de Valifierno, the forgeries and his wealthy art buyers are legend, and no one is sure whether or not any of that is real.  But it’s a story often retold, and probably embellished upon with each retelling.

That story inspired my new novel, Mickey Outside, about an art scam featuring Mickey Steinberg, one of the characters in my third novel, Bull Street.  And since novels are made-up stories, why shouldn't I use de Valifierno's apocryphal scam as the basis for Mickey Steinberg's story?

Click on Cover to Buy on Amazon

In Mickey Outside, Mickey Steinberg, the financier of his generation and the mastermind behind a $2 billion insider trading ring, is getting ready to get out of Yankton, the cushy minimum-security Federal Prison Camp where he's been serving a reduced three-year sentence for cooperating with the Feds.  He's broke, banned from the securities industry for life, divorced by his wife, and none of his old hoity-toity friends from the world of high society and finance in New York will take his calls.

So he needs to come up with a creative way to get back on top.  He's always been a behind-the-scenes genius, but he's not much of a face man, so he recruits another Yankton con, Paul Reece, a good-looking, smooth-talking car-salesman type to help him put together his new con.  He knocks off de Valifierno's idea, researches famous art thefts and settles on Vincent van Gogh's View of the Sea at Scheveningen, a stolen masterpiece that’s never been recovered.  He hires an expert forger to copy it and he's off to the races.

After his release from Yankton and his return to New York, he contacts wealthy buyers in the shadowy underground art market for stolen masterpieces and embarks upon an auction process to sell the painting to the highest bidder.

Then things begin to come unraveled, and the real story begins.

Mickey Outside is caper steeped in the art world, the glamor of New York, mega-rich luminaries, and some good fun.  I hope you'll give it a try.

Buy Mickey Outside: Buy US  Buy UK

Mark Knopfler, Rüdiger and Me

Click cover to buy on Amazon

I recently wrote a short story called Rudiger.  I titled it and created the main character, John Rudiger, based on emotions evoked by a song called "Rüdiger" by Mark Knopfler.   For those of you who don’t know him by name, Mark Knopfler is better recognized as the front man, guitarist and creative force behind the now disbanded rock group, Dire Straits.  "Rüdiger" is from Knopfler’s first solo album, Golden Heart.  "Rüdiger" has a haunting melody and soft backing instruments and vocals behind Knopfler’s trademark lead guitar and gravelly voice with lyrics that linger.

A link to Knopfler performing the song on YouTube in 1996, when it was released, is here: http://tinyurl.com/423d85w

The melody and pace of the song always called to mind the image of someone skulking around with something to hide.  For years I’ve thought of writing a story about a crook hiding out in the Caribbean from the authorities, and every time I thought about it the song, "Rüdiger," played in my head.  So, I wrote the story.

In it, John Rudiger is a fugitive financier living under an alias in the Caribbean, because he ran off with close to $100 million from his hedge fund ten years ago.  He's now down to his last $2 million.  Katie Dolan, a lawyer with the US Attorney's Office in New York, is sent to Antigua to try to get enough evidence to extradite Rudiger back to the US to stand trial.  Rudiger recruits her to help him retrieve $50 million of stolen bearer bonds he can’t get otherwise get out of a safe deposit box in New York.

Katie is no dope, and neither is Rudiger, and each one has to figure out who's scamming who as they work their plan to sneak the bonds out from under the nose of Charlie Holden, Katie's boss, the Assistant US Attorney in New York (a character reprised from my Wall Street novel, Bull Street), who's wise to both of them.

I enjoyed the characters and writing the story so much that I’m creating a series out of it, called the White Collar Crime Series.  Rudiger and Katie will be back, and other shady types will be introduced as well.  I hope you’ll give Rudiger a try.

Update: since I wrote this post I introduced a new short story about Rudiger, Rudiger Comes Alive. It's the prequel to Rudiger, about how Walter Conklin, wunderkind hedge fund manager who runs a $1 billion technology fund, gets stuck between his CFO cooking the books to draw in more investors, Charlie Holden on his trail to arrest him, and his wife Angela, who's never at a loss for (sharp) words. Leaving the country begins to seem like a viable option to him.

Click cover to buy on Amazon

Rudiger is a 10,000 word short story.

Read an excerpt from Rudiger

Buy Rudiger

Rudiger Comes Alive is a 13,000 word short story.

Read an excerpt from Rudiger Comes Alive

Buy Rudiger Comes Alive

Now Rudiger's subsequent adventures are available in the collection, Rudiger Stories.  And a Rudiger novel, Spin Move, takes Rudiger and Katie on a new jaunt from the Caribbean to Africa, Continental Europe and the UK.  I hope you'll give them a try as well.

Click cover to buy on Amazon

Buy Rudiger Stories: Buy US  Buy UK

Click cover to buy on Amazon

Read an excerpt of Spin Move



Buy Spin Move: Buy US  Buy UK

Visit David Lender's website

Merry Christmas to Janet and Hank Lender

I ran a post on September 2nd, which would have been my father's 88th birthday, entitled "Hank Lender's Photographic Legacy."  I've reproduced the post below, with the addition of the cover photo I used for Vaccine Nation, my current thriller.  That photo, from the dock at Mom and Dad's house on Twin Lakes, PA, was the last he ever took.  Mom passed away a year and a half ago, and we sold the lake house just last week.  Now the photo has extra meaning.   Merry Christmas, Mom and Dad.

Copyright 2005 by Herman J. Lender

Dad was an accomplished man on many levels, including having a good sense of humor.  I was with him when Dr. Kimmel, his cancer surgeon, visited him the night before his final surgery.  The odds weren't good, and one of Dr. Kimmel’s final comments was that Dad’s chances of survival were, "miniscule."  After Dr. Kimmel left, Dad said, "Well, at least I don't have to worry about running out of money."

"The Man in White"
Copyright 2005 by Herman J. Lender

Then he got serious.  He made a rueful comment about "all this knowledge" he'd accumulated, and that it would pass on with him.  Dad seemed to be interested in just about everything—classical music, photography, opera, The Beatles, bread baking, gardening, finance, running; the list is endless—and after high school was totally self educated.  We talked about his legacy and I made the point that the knowledge he accumulated, his interest in things, and his intense approach to learning about them was something that would be carried on through his four sons and all his grandchildren.  Ironically, one thing we didn't talk about was his photography, a life-long interest of his.

Copyright 2005 by Herman J. Lender

My brothers and I grew up hearing about Leicas, Nikons, Hasselblad's, telephoto lenses, light meters and f-stops.  Dad built basement darkrooms in each of the three houses in Mt. Tabor we lived in growing up, then another in New Canaan after I went off to college.  We all experienced the magic of going into the darkroom with Dad and watching under a dim yellow bulb as Dad's 35mm black-and-white images appeared in the developer bath.  He taught us how to pick up a photo from the developer bath by the corner with the plastic tweezer, let it drain, then dunk it in the fixative, then in the water bath.  Sometimes I detect a scent that reminds me of those chemicals and it always takes me back to those days.

After Mom died a year ago, we went through all of Mom and Dad's things to close up her apartment.  They had tons of his framed prints on the walls and stacked in boxes in the closets; they’re still sitting in my attic because my brothers and I haven't finished divvying them up.  Most of Dad's 35mm negatives and his color slides are upstairs in their house at Twin Lakes.  But after we closed up Mom's apartment, I put all of Dad's digital collection—he converted to digital in 2000—on 16 GB USB flash memory drives and sent one to each of my brothers.  So that's another part of Dad's legacy we can all carry on.

Copyright 2005 by Herman J. Lender

The cover photos for all three of my books—Trojan Horse, The Gravy Train and Bull Street—are Dad's.  Dad's originals are presented here, before I cropped and Photoshopped the first two so the lettering would stand out on the covers.  Most think the pictures are of Wall Street, which was the image I intentionally tried to evoke based on the content of my books, but they're actually of Second Avenue and the 59^th St. Bridge, taken from the balcony of Manette’s and my 24^th floor apartment at 58^th St. and Second Avenue in New York City.  Dad titled the photo for the Trojan Horse cover, at top left, "The Man in White."  If you look closely, you can see a man dressed completely in white jaywalking through the heavy traffic (he’s inside the “D” of “Lender” on the book’s cover).  The photo for the cover of The Gravy Train, at center, is about the same shot taken at night.  The Bull Street cover photo is at left, a night shot of the 59^th St. Bridge.

Hank Lender's Photographic Legacy

"The Man in White"
Copyright 2005 by Herman J. Lender

Dad was an accomplished man on many levels, including having a good sense of humor.  I was with him when Dr. Kimmel, his cancer surgeon, visited him the night before his final surgery.  The odds weren't good, and one of Dr. Kimmel’s final comments was that Dad’s chances of survival were, "miniscule."  After Dr. Kimmel left, Dad said, "Well, at least I don't have to worry about running out of money."

Then he got serious.  He made a rueful comment about "all this knowledge" he'd accumulated, and that it would pass on with him.  Dad seemed to be interested in just about everything—classical music, photography, opera, The Beatles, bread baking, gardening, finance, running; the list is endless—and after high school was totally self educated.  We talked about his legacy and I made the point that the knowledge he accumulated, his interest in things, and his intense approach to learning about them was something that would be carried on through his four sons and all his grandchildren.  Ironically, one thing we didn't talk about was his photography, a life-long interest of his.

Copyright 2005 by Herman J. Lender

My brothers and I grew up hearing about Leicas, Nikons, Hasselblad's, telephoto lenses, light meters and f-stops.  Dad built basement darkrooms in each of the three houses in Mt. Tabor we lived in growing up, then another in New Canaan after I went off to college.  We all experienced the magic of going into the darkroom with Dad and watching under a dim yellow bulb as Dad's 35mm black-and-white images appeared in the developer bath.  He taught us how to pick up a photo from the developer bath by the corner with the plastic tweezer, let it drain, then dunk it in the fixative, then in the water bath.  Sometimes I detect a scent that reminds me of those chemicals and it always takes me back to those days.

After Mom died a year ago, we went through all of Mom and Dad's things to close up her apartment.  They had tons of his framed prints on the walls and stacked in boxes in the closets; they’re still sitting in my attic because my brothers and I haven't finished divvying them up.  Most of Dad's 35mm negatives and his color slides are upstairs in their house at Twin Lakes.  But after we closed up Mom's apartment, I put all of Dad's digital collection—he converted to digital in 2000—on 16 GB USB flash memory drives and sent one to each of my brothers.  So that's another part of Dad's legacy we can all carry on.

Copyright 2005 by Herman J. Lender

The cover photos for all three of my books—Trojan Horse, The Gravy Train and Bull Street—are Dad's.  Dad's originals are presented here, before I cropped and Photoshopped the first two so the lettering would stand out on the covers.  Most think the pictures are of Wall Street, which was the image I intentionally tried to evoke based on the content of my books, but they're actually of Second Avenue and the 59^th St. Bridge, taken from the balcony of Manette’s and my 24^th floor apartment at 58^th St. and Second Avenue in New York City.  Dad titled the photo for the Trojan Horse cover, at top left, "The Man in White."  If you look closely, you can see a man dressed completely in white jaywalking through the heavy traffic (he’s inside the “D” of “Lender” on the book’s cover).  The photo for the cover of The Gravy Train, at center, is about the same shot taken at night.  The Bull Street cover photo is at left, a night shot of the 59^th St. Bridge.

Hank Lender would have been 88 years old today.  Happy Birthday, Dad.