"Commerce Department Subpoenas Businessman's Records."
Gray denied any violations of technology transfer regulations in using Russian facilities to launch his satellites. She jumped from article to article. They all tended to repeat the same facts, but some put an ominous, sinister spin on events. "Boy Wonder Buys Russian Rockets."
Gray had purchased dozens of huge Russian ICBMs scheduled for destruction under START III for use in launching his satellites into space at bargain-basement prices.
She skipped further back. "Federal Trade Commission Loses Antitrust Suit." Gray's proposed satellite transmission prices were outrageously low, but they weren't illegal "predatory" prices, the court had held.
Laura moved on. "Federal Communications Commission Begins Investigation." Gray said he would sell his systems in Europe and Japan if they were not licensed in the United States.
"Bad Boy Businessman Back Before Congress." Gray had been subpoenaed to testify in front of the Science and Technology Committee.
"What are your intentions?" he'd been asked. "To make money" had been his only reply. The packed hearing room had exploded in laughter, the Time Magazine article reported.
With a sigh, she leapt randomly a third of the way back through the search — further back in time. There was a Wall Street Journal article about a failed savings and loan in early 1988. Gray was called to testify on Capitol Hill as one of the people who had gotten a major loan from the S&L before it went under. Laura frowned and nodded. "It figures," she mumbled, mildly disappointed. He's just like all the others. The only way to get to the top is to cheat. One line at the end of the article caught her eye. "Mr. Gray's research laboratory in Palo Alto had repaid its promissory note in full with interest on request of the board audit committee one month before the S&L failed under its crushing load of bad real estate loans." Repaid in full? she wondered, perplexed for a moment. But who knows what went on? Laura decided, and she jumped randomly further back.
Just six months before that, Gray had been investigated again, this time in connection with allegations of market manipulation in the wake of the great stock market crash in October 1987. "Lovely," she whispered, tossing her sandwich wrapper into the trash. Her finger hesitated over the Exit key. She'd learned enough and was ready to get back to the pile of papers she needed to grade. Laura hesitated, and then read on.
Gray had purchased almost two hundred million dollars in something called "puts" in the options markets on the Thursday before the Monday crash. Put options, she read, give the holder the right to sell — or "put" — stock to the other party to the contract at a specified price.
They were "naked" puts, meaning Gray didn't own the stocks that he had the option to sell. When the price of the stocks plummeted, Gray bought the stocks cheap, "put" them to the other parties to the options for the contractually agreed higher price, and pocketed the difference.
In one week, Gray had turned two hundred million dollars into six billion, after taxes. He had made a fortune in the market's collapse, claiming during the government's investigation that he had used a sophisticated new computer program called a "probabilistic neural network" to spot the impending downward correction in the market.
The government found no evidence of any illegal manipulation.
Laura sighed. It looked dirty: 1987, she thought, Gray was twenty-four years old. A multibillionaire at twenty-four.
Somewhere, way back, there was the wellspring. The source of the money, the success. The more she looked, the dirtier the money appeared. Gray had been Michael Milken's whiz kid at Drexel Burnham in the early eighties, making millions analyzing high-tech stocks for the soon-to-be-jailed junk-bond king. Gray had been called to testify at the Milken trial. There apparently had been a falling-out between Gray and Milken in 1984, and the two had parted company. "Gray denied that he had resigned from Drexel Burnham on ethical grounds, insisting instead that he had resigned over disagreements regarding the feasibility of a computer project designed to forecast market trends. After leaving Drexel, Gray made hundreds of millions by putting together an investor group and undertaking a petrochemical project on his own."
Laura scanned further back through the articles. "Local Businessman Sells Plant," the Houston Chronicle had reported earlier in 1987.
"Industry giant Monsanto agreed to pay the Gray Corporation $700 million for the plant, which makes polyvinylchloride products."
Laura's upper lip curled on seeing a picture of the grimy plant, shaking her head as she imagined the tons of toxic products belched out to glutinous American consumers. "The products' main use is in lightweight pipes for drinking water of the sort found in most new construction." Gray had put four million dollars into the deal — every penny he had — in 1984 after leaving Drexel Burnham.
Other investors had put up forty million for preferred stock, and banks had loaned four hundred million, but Gray always owned all the common stock. He always had control. He had purchased a long-closed petrochemical plant at a scrap-metal auction, rehired all the plant workers, converted it for processing of PVCs, and had five years of back orders by the time it was brought into production.
He had guessed right. There had been a huge upsurge in world demand for plastic pipes. Gray had again foreseen a market swing missed by everyone else.
Laura's eyes drifted from the screen. There had been no mention of a "neural network" being used in spotting trends in the market for PVC products as there had been in the stock market investigation. The programs were used routinely for things like that now, she knew.
Stockbrokers regularly advertised their pet programs in magazines and newspapers and on television, giving them catchy names like "Primus One" and "Trendline 2000." But could Gray have developed one back then? she wondered. In 1984? Nineteen eighty-four. Laura did the math. In 1984, Gray had been twenty-one years old.
She searched further back in the database. A short article in Business Week had a picture of Gray at age twenty. He sat on a table next to a computer wearing an open-collared dress shirt and blue jeans. He looked… normal, for that time anyway. The article was written in a humorous style — laughing "with" Gray, not "at" him.
"The young prodigy claims the 'analog neural network' is ideally suited to discern problems he called 'fuzzy' (a term computer experts on the BW staff seemed at a loss to define). When the program was asked to solve the problem 'What is two plus two?' however, it replied, 'Four-ish.' Gray's superiors at Drexel Burnham were silent when asked whether they were pleased with Gray's creation, which is supposed to accept large numbers of loosely related variables and identify patterns or relationships to assist in market analysis."
There were very few articles about Gray before 1983. His name appeared in lists with numerous others who had closed this financing or advised on that merger.
But what she already knew about the man swirled in her head.
Russian missiles, antitrust violations, stock market manipulation, failed S&Ls, junk bonds, chemical plants… She rapidly scanned the remaining articles. As the full flavor of all she had read settled in, Laura grew disgusted at herself that she'd even considered taking that man's offer. She reached for the button to turn the terminal off.
With her finger resting on the Exit key, she decided once and for all that she was wasting her time.