“We are very pleased with your work here, Alex,” he began in a friendly tone once they were alone in the conference room. “Hugh is impressed by your profound market knowledge.”
“Thank you.” Alex smiled in acknowledgment. After all, they were paying her two million a year for that knowledge. But what did he really want?
“The efficiency and success of your work speaks for itself,” Levy continued, “and as you know, we are willing to reward success.”
His smile grew wider.
“We are considering a bonus of a hundred and fifty thousand dollars on top of your regular bonus payment.”
Alex wondered if she’d heard him correctly.
“That’s a significant amount of money.” With some effort she concealed her surprise and maintained her composure.
“Yes, indeed.” Levy smiled in a kind and paternal way. “But you work eighty hours a week and have delivered remarkable results in less than five months. Others need this much time just to get accustomed to a new company. Furthermore, LMI owes its excellent reputation in the area of M&A to you. Why shouldn’t the firm reward you for that?”
“Well,” Alex responded without batting an eye, “that’s incredibly generous.”
She had the feeling that she needed to be very careful. She had no idea where this intuition came from, but the feeling was there.
Finally Levy spoke. “I would like to make you an offer—here, between you and me. Nothing in writing. Let’s call it a handshake agreement. LMI could obviously give you the bonus in the customary form of stock options. But we could also transfer the money in cash, which means, well, tax free, to a foreign bank account.”
He smiled innocently, as if he hadn’t just suggested tax evasion to her.
“The decision is yours, Alex. Stock options are good. But considering your tax bracket, the advantage of a cash payment is obvious.”
Alex wasn’t quite sure whether she liked the proposal, but she slowly realized why Levy had invited her here today. He wanted to test her willingness to cross legal boundaries, to judge the extent of her moral scruples.
“Just slightly illegal, isn’t it?” she said nonchalantly, and smiled.
“Illegal.” Levy laughed quietly. “What an ugly word. By the way, I think that you already pay enough taxes, don’t you?”
Alex nodded. Whenever a few investment bankers got together, they always talked about legal tricks and loopholes to avoid taxes. The cut taken in taxes from salaries this high was enormous. A bank account in the Bahamas, Cayman Islands, Switzerland, or elsewhere was the rule rather than the exception.
“Let St. John know once you make a decision,” Levy said in a friendly tone. “But this is just one of two topics that I’d like to discuss with you. The other is the independence of your department.”
“I thought that you expected personal initiative?” Alex was surprised.
“Oh yes, I do,” Levy reassured her. “Please don’t think of this as criticism! Discretion is vital in your job. And we are certainly more than happy. But in the future, perhaps you can manage to inform the board about planned deals before you enter into initial negotiations with a client.”
He paused for a moment to let his words sink in.
“The board of directors,” he continued, “would like to stay informed about the activities in every department of the firm. This is pure interest, not control. You make all of the decisions as before, after consulting the CFO and the legal department.”
Alex looked at Levy for a moment and then nodded slowly. She was well aware of what one could do with information about imminent deals before other market participants could get in the game. There was a lot of money to be made by buying stocks of businesses prior to the public announcement of a takeover, which in turn would drive up the stock price. This was insider trading, and it was probably the most prohibited form of market manipulation. This is why investment banks were required to maintain “Chinese walls” serving as barriers between traders and investment bankers within a firm, so that undisclosed material information couldn’t be abused prior to its public disclosure. Levy was more or less asking her to circumvent this Chinese wall. Alex noticed the LMI president was eagerly awaiting her response, and she decided to cooperate.
“That’s no problem,” she said after a brief hesitatation. “I’ll keep you up to date.”
The relief that rushed across Levy’s face didn’t escape her notice, though his friendly smile soon returned.
“Excellent,” he said, satisfied. “I knew that we’d understand each other. You will report directly to Mr. St. John.”
Zachary St. John wasn’t particularly skilled in the banking business, but he very much understood the Wall Street power structure. He often threw parties at his penthouse apartment in Battery Park City, inviting only those he deemed important. Alex was invited for the first time this evening, and she was more than curious about who she would meet there. Invitations to Zack’s legendary parties were highly coveted in the Wall Street community because people exchanged important news, made contacts, and arranged deals while enjoying the finest food and the most expensive French champagne.
Alex took a while to think about what she should wear. At first, she considered one of the business suits that she customarily wore in the office, but she finally decided on an outrageously expensive, tight red evening gown by Versace. Tonight, she intended to show everyone that she was a woman first and foremost—despite her cleverness and ruthlessness. She arrived at the penthouse at nine thirty. It never ceased to surprise her how extravagantly people lived in New York when they had the means. About two hundred guests were spread over five thousand square feet of luxury, sitting or standing in small groups, having a great time. Zack approached her with open arms, a broad grin, and a thick Cohiba cigar between his fingers. He welcomed her warmly, admiringly eyeing her dress and her lean, shapely legs. Then he showed her off to a few very important people.
The complete LMI board of directors was of course present, together with their wives, but also a diverse group of others: lawyers, brokers, analysts, and—of course—investment bankers from other firms. Alex’s initial inhibition quickly disappeared after she realized how easily she was accepted into this illustrious circle. It felt like everyone was competing to speak with her. Zack reappeared at one point, just as she was absorbed in a discussion with Kwai and Weinberg.
“Sorry to interrupt,” Zack said as he took Alex by the arm. “I’ll bring her back in a minute.”
“What’s going on?” Alex asked in surprise.
“Come with me,” Zack whispered with a mysterious grin on his face. “There’s a very powerful man you should meet.”
She was curious as she followed him through the maze of the penthouse and up to the sprawling rooftop terrace. A few men sat laughing together in comfortable rattan armchairs, drinking cognac, smoking the Cohibas that were offered in every room. Just as Alex stepped onto the terrace, one of the men turned around and their eyes met. The laugh on the dark-haired man’s face faded. He placed his glass on the low table and stood up.
“Who’s that?” Alex whispered into Zack’s ear.
“Sergio Vitali. You’ve heard of him before, right?”
Of course she had. Everyone in New York City knew Sergio Vitali. His face was shown often enough on television and in the newspapers. He was one of the most powerful people in town—a billionaire real-estate tycoon, if the press was to be believed. He made regular headlines for his large donations to social institutions and presence at the glamorous benefits and banquets of New York’s high society, where the most important deals were made. Sergio Vitali was a poster child for American business. According to Forbes, he was among the richest individuals in the United States. Half of Manhattan belonged to him. Vitali also owned hotel chains and casinos in Las Vegas, Reno, Atlantic City, and Miami. He ruled over a corporate conglomerate and traveled in his own private Learjets.