Scott Turow - The Burden of Proof

"And then sell once the market has risen.."

"You betchum. They got all kinds of names for it. 'Front tannin." 'Tindin ahead of the customer." But they been playin this game ever since there was a market." Margy looked up. Ungroomed, her hair was darker, and her eyes seemed bloated a bit by the short night. She remained, however, a pretty sight, this large hearty woman, smart and energetic. Stern noticed that she had never removed her earrings, little berries of gold.

"I would assume that the compliance staff of the Exchange is alert to this?"

"Shore. Exchange catches you at it, you're out on your keester in a big goddamn hurry. And they're always lookin."

"And how, then, were such precautions avoided here?"

"Error account."

"The error account," said Stern, merely for the sake of repetition.

Somehow, as she snaked along on her belly, the shirt had came away completely from one breast, which rested pale and round on the bedclothes. He had momentarily fallen into their discussion, but this new sight revived other inclinations. Libido was like a rusty gate, he decided; finally open, it was difficult to close. He picked up a piece of paper on the bed and casually hid his erection.

"I gotta give it to ole peckerhead. I'd never have figured this one.

The house error account is where we clean up mistakes. Right? Sometimes we buy or sell a contract on one commodity, customer wanted another. We buy three cars, customer only asked for two. Any dumb o1' mistake.

Account number isn't right or somethin. Soon as somebody notices the error, down on the floor or in accounting or when the customer complains, trade gets moved to the error account.

If we can't get the trade where it belongs, we close out the pOSition-you know, sell what we bought or buy what we sold. Okay?"

Okay, said Stern.

"Now suppose I'm a real clever peckerhead and I wanna trade ahead of my customers and I don't wanna get caught. t buy a little in Kindle of what I know they're gonna buy a lot of in Chicago. Price'll move tick for tick in both places. All I gotta do is wait for the market to jump.

And I don't do it in my name. I make a mistake. Deliberately. Wrong account number, say. Then, after the market runs up, I sell out the position."

"Once more, with a wrong account number?"

"Right. Couple days later, when the smoke clears, both trades are sittin over in the house error account. Compliance'll never be lookin at Kindle, and even if they do, they won't find anybody buyin ahead of the market. All they see is some dumb ole mistake. But when we close out the two positions, the buy and the sell, we got a hell of a nice little profit in the error account."

Stern wagged his head in amazement. How nice a profit, he wanted to know.

Margy shrugged. "[haven't finished lookin yet. Four trades here made close to a hundred thousand, though. I'd say you probably got six times that. Not bad, you' know, for a few phone calls while you're scratchin your fanny."

Six hundred thousand, thought Stern. Ms. Klonsky was not pursuing a petty offense.

"Only thing," said Margy, "is this little scheam still doesn't seem much like our friendly peckerhead."

That had been Stern's thought as well, that the rewards were not Worth the risks for a man of Dixon's wealth. But Margy laughed at the idea when Stern said that.

"Oh, he'd screw you in the ground for a buck and a quarter, let alone half a million. Naw, it isn't that. Just doesn't seem like Dixon. Our customers? That's his religion. I can't figure him makin them suckers.

He's loyal." Lawl. She grabbed Stern's hands. "But I know he done it," she said.

"Because he must be informed before any large order is traded?" This fact, which Dixon had admitted in Stern's office, had already come to mind.

"That's one thing. But lotsa folks in house know what we're doin. Only, ifI stole five, six hundred thousand bucks, am I gonna hide it in your pocket? It's the house error account. And o1' Dixon Hartnell is shore enough the house.

He owns MD Clearing Corp, MD Holding Corp, Maison Dixon.

The whole shootin' match is his. This is probably some dumb old game he was playin, seein' if he could get a laugh or two up his sleeve."

Stern contemplated the notion of Dixon committing crimes for his own amusement. It was not impossible. With Dixon, of course, nothing was.

"And what became of the money?" Stern was thinking about the subpoenas the government was serving at Dixon's bank.

Margy turned onto her back and wobbled her head a bit to indicate that she did not know. Her breasts went loose and splayed against her chest; beneath her chin, where the blush-on ended, a pale rim of flesh was visible, oddly pallid, as if the years of cosmetic treatments had drained her complexion of color. These flaws meant little to Stern; he remained in heat.

"I can't tell without a lot more lokin. But you want my guess about what he did with the money?"

"Please."

"Nothim"

"Nothing?"

"Nothin. Just leaves it there. That's What I'd do. Error account always runs at a deficit. That's because when you.goof on an order and the customer makes money on it, he won't tell you it's an error. He just accepts the trade.

You only hear about the losers. And that's okay. Cost of doin business. But you can lose forty thousand a month, and if you start makin some profits, all of a sudden you're only losin two thousand a month. See? Nobody knows the difference. Except oe peckerhead. Cause, at the end of the year, that six hundred thousand's gonna end up on the bottom line. Sort of like he give himself a bonus."

"Very clever," said Stern of the entire scheme. "And quite adept of you, Margy, to figure all this out." He kissed the back of each of her hands.

"Oh, I am a clever harlot," she said, smiling up at him.

Stern wondered whose phrase that was, who had called her that before; it seemed to be something she was repeating.

He, naturally, might guess. "But I'm not the smartest one."

"No?" asked Stern, sitting beside her now on the bed, where she waited sunny-side up to face him. "Who is that?"

"Ole you-know-who. They won't never catch him. All he had todo was call the order desk to put on these positions that ended up in the error account. He only does that twenty times a day. Nobody's gonna remember him doin it. And there isn't one piece of paper in this mess with so much as his initials on it. He's gonna point to forty other people Shoulda done it instead of him. Phone clerks. Customers' reps. Coulda been me." Margy smiled then. "They may think it's him. They may know it's him. But they ain't gonna prove it's him." Margy had watched television, heard these lines; perhaps she was imitating Stern. She had certainly convinced herself. Dixon was confident too, Stern thought, recalling Dixon's predictions of vindication on the phone.

His client was fortified by his prior successes with the IRS and his knowledge that the government had run off to rangack his checking accounts when the mqney had never really left the company. Stern, however, was hardly as sanguine. The Assistant U.S. Attorneys were often adroit financial investigators. They might blunder about at first, but if Margy was right in her suspicions about how Dixon had handled his ill-gotten gains, the prosecutors would find them eventually, in his hands, and draw the same conclusions as she had about who was responsible. Dixon remained at substantial risk.

"I should speak to the MD employees in Kindle who received these orders on the desk to be certain their memories are as vague as you suppose," said Stern. It would be wise to remind whoever might have dealt directly with Dixon of how long ago these events occurred, and the confounding volume of orders received. each day; Stern would have to do that promptly, before the FBI unearthed contrary recollections.