Andrew Gross - Reckless

“The ship sank,” one veteran hedge fund manager said. “Since the news of that trader, there’s been a weeklong run on the accounts. They no longer had the reserves to fight it off.”

The firm succumbed to a balance sheet eroded by heavy investments in toxic subprime mortgages and hurt further by the recent admission that one of their most highly regarded traders had lost as much as twelve billion dollars through unauthorized activity. These latest losses only came to light in the wake of the Glassman family shooting deaths, thought to be a robbery at his spacious Greenwich, CT, home, but now questions have arisen as to whether it was indeed part of a recent home break-in spree there.

“They were too big, too brash,” one Wall Street insider said. “They didn’t see the oncoming train. How fitting that it was being driven by their own star.”

For the fifth straight day, the stock market was expected to tumble to new lows, dragging the financial sector farther down. Shocking revelations of losses and malfeasance have become part of daily life on Wall Street, and the biggest concern, given the loss of reserves and the increasingly questionable value of all mortgage-related securities, is no longer whether Wertheimer Grant will survive, but which “unsinkable” Wall Street icon will be next.

In her cluttered, windowless office, in the basement of a drab gray building a block from the Treasury Department in Washington, DC, Naomi Blum was trying to put it all together too.

Everyone was buzzing about it. Wertheimer Grant going under. Years of believing they were the right hand of God had dragged them to the edge. Not to mention huge bets on the subprime mess and leveraging up thirty to one.

All it took was a single rogue money manager to push them over.

But what was adding to the trouble was the new news feed on her computer: MURDERED TRADER NOT LINKED TO LOCAL BREAK-INS.

Not linked…

Naomi sucked on a kiwi-mango smoothie, her lunch. On her desk was a slim blue folder labeled SECRET AND CONFIDENTIAL. She had been copied on it by a liaison over at the FBI. The file contained a series of transcripts picked up from the cell phone of a wealthy Bahraini businessman long suspected of being a financial go-between with people in the region who might want to do the U.S. harm. Probably why the transcript had landed on her desk in the first place. She put on her glasses and browsed through the last, cryptic entry, dated February 8.

What did it mean?

As the lead investigator for the newly formed Financial Crime and Terrorism Task Force, a unit of eight under the Department of the Treasury, her job was to identify and interrupt wide-scale financial fraud and conspiracies that might have national-security or market-impact implications.

They were the first responders, so to speak, in potential economic attacks against the United States. They followed money around the world, charted patterns of deposits in nonconforming banks, monitored the real work of certain questionable “charities,” and pretty much “chalkboarded” various potential security threats to the financial landscape here.

It all sounded very important-at least that’s what Naomi’s mother always told her.

Still, Treasury wasn’t exactly the glamour posting these days.

In her two years on the job, they had laid open giant health care schemes aimed at bilking hundreds of millions of subscribers with underpaid claims. They’d prosecuted two prominent hedge fund principals who had diverted billions in duped investors’ assets-one who was apprehended trying to fake his own death in an attempt to flee the country, the other presently serving a twenty-year RICO charge at the federal correctional facility in Jesup, Georgia.

Of course, by the time it all got to an arrest, Treasury was no longer running the show. It would be turned over to the financial terrorism section of the FBI. Or the AG’s office.

Still, Naomi didn’t mind. She sort of liked being the behind-the-scenes investigator. Like CSI. The real CSI, not the TV glamour guys who took the bad guys down and, guns out, were first through the door.

Not that she couldn’t handle herself in that way if she had to.

Naomi was five foot three, fit as any field agent, wore stylish black glasses, and kept her dark hair short, Mika Brzezinski-style. She had what guys might call a sort of “bookish” look, like a library rat, despite, behind her frames, her brilliant gray eyes.

She hadn’t set out to be in this role. She had actually started out studying music theory at Princeton. Under Amos Kershorn. Her big claim to fame was being first cello in the Anne Arundel County High School Orchestra outside of Baltimore. Along with being an all-Ivy striker on the women’s field hockey team.

After 9/11, her twin brother, Jeremy, a lacrosse player at UVA, had dropped out and enlisted. All he said was it was something he just had to do. Growing up, the two of them couldn’t have been less alike and still come from the same womb. Jeremy was six foot two, wide shouldered, charismatic, solid as a rock. Cocky as all hell. Only started cracking the books the night before a test.

She was a foot shorter, quiet, to this day actually kept her driver’s license hidden behind her library card. She’d gotten the brains, they always joked, and Jer got whatever was leftover. After a tour in Iraq, he was sent to Fort Benning in Georgia as part of Airborne Ranger training, but in his second week there, the copter he was flying in crashed. He survived but lost both his legs. When she went to see him in the hospital-this big, brave, brawny guy, first-team all-ACC-he turned away. Empty. A shell of what he once was. Even a blind person could have seen the disappointment written on his face.

Two days later, she left Princeton and signed up herself.

She had never really been into the military or overly patriotic before. Her dad was a newspaper editor in Baltimore. She just felt inside that it was something she had to do. In the steps of her big brother. She even pushed for Jim’s old regiment, but the army took a look at the fancy school she’d come from and those impressive test results and placed her into an intelligence unit. Naomi spent two years in Iraq as a junior member on the army’s internal investigative team. One of her assignments was to look into the bloodbath that occurred at Nisoor Square in Baghdad, where a handful of private security guards, claiming they were provoked, fired wildly into a crowded square, leaving seventeen Iraqis dead. Naomi pushed hard in her search, sure that an unprovoked and criminal act had been committed. She urged her superiors to detain the participants, but by that time the agency had secretly whisked the guilty contractors “out of country,” and the government seemed intent on papering everything over and letting them go.

Years later, it still burned her.

Naomi realized that the accountability went much higher, but by that point the result was merely a whitewash, a PR exercise, though in the wake of press exposure from her findings, the security outfit was forever banned from Iraq.

After her second tour-she saw action on a couple of hairy convoys-she opted out and went back to school. Changed her major to economics. A degree in music no longer carried the same weight in her new way of thinking of the world. She figured she’d go to law school, maybe Wall Street, do the sixteen-hour-days-until-you-make-partner thing, but when she was recommended to Treasury by a superior she had worked with in the field, and he told the department they would never find anyone smarter or more dogged on a case, something just clicked.

What clicked was the chance to finally feel she was making a difference.

She’d always been on the small side physically, and private. Part of her had always needed to prove that she was tough enough. It went back to the way she played attack on the field-hide on the flank, spot the opening, worm her way in among the bigger girls. Use her speed and guile and knowledge of the game.