Sara Paretsky - Killing Orders

Once we were settled she repeated her initial question. I told her about the forgery. “As far as I know, the Fort Dearborn Trust discovered it because the serial numbers hadn’t been issued yet. The FBI is being stuffy and close-mouthed, but I know the forgery was pretty high quality-good enough to pass a superficial test by the auditors, anyway. I’d like to talk to someone who knows something about forging-try to find out who’d have the skill to create that good a product.”

Agnes cocked a thick eyebrow. “Are you asking me? I just sell ‘em; I don’t print ‘em. Roger’s problem is the type of thing I’m equipped to handle. Maybe.” She turned to Ferrant. “Why don’t you tell me what you know at this point?”

He shrugged thin shoulders. “I told you on the phone about the call from our specialist in New York, Andy Barrett. Maybe you can start by telling me what a specialist is. He doesn’t work for Ajax, I take it.”

“No. Specialists are members of the New York Stock Exchange-but they’re not brokers for the public. Usually they’re members of a firm who get a franchise from the Exchange to be specialists-people who manage buy-and-sell orders so business keeps flowing. Barrett makes markets in your stock. Someone wants to sell a thousand shares of Ajax. They call me. I don’t go down to the floor of the Chicago Exchange waving ‘em around until a buyer happens along-I phone our broker in New York and he goes to Barrett’s post on the floor. Barrett buys the shares and makes a match with someone who’s looking for a thousand shares. If too many people are unloading Ajax at once and no one wants to buy it, he buys on his own account-he’s got an ethical obligation to make markets. Once in a great while, if the market gets completely haywire, he’ll ask the Exchange to halt trading in the stock until things shake out.”

She paused to give us time to order, Dover sole for me, rare steaks for her and Roger. She lit a cigarette and began punctuating her comments with stabs of smoke.

“From what I gather, something of the opposite kind has been going on with Ajax the last few weeks. There’s been a tremendous amount of buying. About seven times the normal volume, enough that the price is starting to go up. Not a lot- insurance companies aren’t glamor investments, so you can have heavy action without too much notice being taken. Did Barrett give you the names of the brokers placing the orders?”

“Yes. They didn’t mean anything to me. He’s sending a list in the mail… I wondered, if it wouldn’t be too great an imposition, Miss Paciorek, whether you’d look at the names when I get them. See if they tell you anything. Also, what should I do?”

To my annoyance, Agnes lit a second cigarette. “No, no imposition. And please call me Agnes. Miss Paciorek sounds too much like the North Shore… I guess what we’re assuming, to put the evil thought into blunt words, is that someone may be trying a covert takeover bid. If that’s true, they can’t have got too far-anyone with five percent or more of the stock has to file with the SEC and explain what’s he doing with it. Or she.” She grinned at me.

“How much stock would someone need to take over Ajax?” I asked. The food arrived, and Agnes mercifully stubbed out her cigarette.

“Depends. Who besides your firm owns sizable chunks?”

Ferrant shook his head. “I don’t really know. Gordon Firth, the chairman. Some of the directors. We own three percent and Edelweiss, the Swiss reinsurers, holds four percent. I think they’re the largest owners. Firth maybe owns two. Some of the other directors may have one or two percent.”

“So your present management owns around fifteen percent. Someone could carry a lot of weight with sixteen percent. Not guaranteed, but that would be a good place to start, especially if your management wasn’t aware it was happening.”

I did some mental arithmetic. Fifty million shares outstanding. Sixteen percent would be eight million. “You’d need about five hundred million for a takeover, then.”

She thought for a minute. “That’s about right. But keep in mind that you don’t need to come up with that much capital. Once you’ve bought a large block you can leverage the rest- put your existing shares up as collateral for a loan to buy more shares. Then you leverage those and keep going. Before you know it, you’ve bought yourself a company. That’s oversimplified, of course, but that’s the basic idea.”

We ate in silence for a minute; then Ferrant said, “What can I do to find out for sure?”

Agnes pursed her square face as she thought about it. “You could call the SEC and ask for a formal investigation. Then you’d be sure of getting the names of the people who are really doing the buying. That’s an extreme step, though. Once they’re called in they’re going to scrutinize every transaction and every broker. You’d want to talk to your board before you did that-some of your directors might not relish having all their stock transactions revealed to the piercing light of day.”

“Well, short of that?”

“Every brokerage firm has what we call a compliance officer.

Once you get the list of firms from Barrett, you can try calling them and find out on whose behalf they’re trading. There’s no reason for them to tell you, though-and nothing illegal about trying to buy a company.”

The waiters hovered around our table. Dessert? Coffee? Ferrant absentmindedly selected a piece of apple pie. “Do you think they’d talk to you, Miss-Agnes? The compliance officers, I mean. As I told Vic, I’m way out of depth with this stock-market stuff. Even if you coached me in what to ask, I wouldn’t know if the answers I was getting were right.”

Agnes put three lumps of sugar in her coffee and stirred vigorously. “It would be unusual. Let me see the list of brokers before I let you know one way or another. What you could do is call Barrett and ask him to send you a list of the names the shares were registered in when he sold them. If I know anyone really well-either the brokers or the customers-I could probably call them.”

She looked at her watch. “I’ve got to get back to the office.” She signaled for a waiter and signed the bill. “You two stay though.”

Ferrant shook his head. “I’d better call London. It’s after eight there-my managing director should be home.”

I left with them. The snow had stopped. The sky was clear and the temperature falling. One of the bank thermometers showed 11 degrees. I walked with Roger as far as Ajax. As we said good-bye he invited me to go to a movie with him Saturday night. I accepted, then went on down Wabash to my office to finish the report on pilfered supplies.

During the slow drive home that night I pondered how to find someone who knew about forging securities. Forgers were engravers gone wrong. And I did know one engraver. At least I knew someone who knew an engraver.

Dr Charlotte Herschel, Lotty to me, had been born in Vienna, grew up in London where she ultimately received her doctor of medicine degree from London University -and lived about a mile from me on Sheffield Avenue. Her father’s brother Stefan, an engraver, had immigrated to Chicago in the twenties. When Lotty decided to come to the States in 1959, she picked Chicago partly because her uncle Stefan lived here.

I had never met him-she saw little of him, just saying it made her feel more rooted to have a relative in the area.

My friendship with Lotty goes back a long way, to my student days at the University of Chicago when she was one of the physicians working with an abortion underground I was involved in. She knew Agnes Paciorek from that time, too.

I stopped at a Treasure Island on Broadway for groceries and wine. It was six-thirty when I got home and phoned Lotty. She had just come in herself from a long day at the clinic she runs on Sheffield near her apartment. She greeted my offer of dinner enthusiastically and said she would be over after a hot bath.