Wilson sat back to contemplate what Daniel had said. When it came to matters of economic logic and business strategy, Wilson was uncommonly astute. But his real reason for becoming a management consultant had been to take on the pompous tyrants who resided at the top of most corporate hierarchies. It was his moxie for standing up to corporate bullies that explained his early business success and charismatic appeal. A mere three years out of Harvard Business School, Wilson had already been identified as a rising star at Kresge amp; Company. He was a natural at challenging and redressing business leaders who’d become overly dogmatic, in fact he did it better than seasoned partners twice his age. What Daniel said hadn’t really surprised him. Some CEOs were magnanimous and empowering, but most were avaricious and domineering.
“Is my father’s estate at risk?” he asked.
“Not currently,” Daniel said. “However, if an investigation into your father’s death uncovers the full scope of his financial dealings, it could tie up assets for a long time. Maybe permanently, if you know what I mean.” He shot Wilson a look of caution.
“What aren’t you telling me?”
“Your father charged me with protecting his estate. It’s my first and foremost obligation to him, to you, and to your family. And I will do everything in my power to execute his will. Doing it his way will give you unlimited financial resources,” Daniel said, pausing. “When you finally uncover the full story of what happened here, you can do something about it.”
Wilson quickly saw the wisdom in Daniel’s words, but that didn’t keep him from feeling manipulated.
“You told me his methods were legally defensible. Why are you so concerned about an investigation into his business activities?”
“The law is only an interpretation of circumstances, associations, and motives. There are always clients ready to abuse what they learn from Fielder amp; Company. If such abuses are identified and investigated, they could point to your father as the source. Guilt by association and circumstance. The only motive imputed to him would be greed. We might eventually beat it in the courts, but it could take years, tying up the family estate and crippling Fielder amp; Company.”
Wilson looked suspiciously at Daniel Redd.
“What sort of abuses?”
“Remember Richard Beckstrom?” Daniel asked as he leaned forward again.
“The IPO guru who died in prison?”
Daniel nodded. “He was a client who started inflating earnings before taking companies public to jack up the opening stock price. It took the SEC a few years to nail him, but they finally did.”
“Why wasn’t Fielder amp; Company implicated?”
“Fielder amp; Company terminated its relationship after two years of working with Beckstrom, but he’d already learned enough to become obsessive and dangerous. That’s when he began launching his now infamous string of IPOs. There are dozens of examples like Beckstrom, employing all sorts of financial devices-LBOs, real estate investment trusts, derivatives, credit default swaps, high yield bonds, IPO mutual funds, E-trading schemes, inflated Net stocks, and the list goes on. Your father had enormous influence but avoided the limelight,” Daniel said, suddenly looking more intense. “Your father is a financial genius, like his grandfather Harry and J. P. Morgan and John D. Rockefeller, only better. He manipulated capital markets with ease, even though his real desire was to eliminate the possibility of such abuses. He was determined to transform how financial markets worked, for the benefit of everyone, not just the inside elite. Unfortunately, a federal judge might not interpret his intent that way.”
Wilson studied Daniel.
“Who were the others, besides Beckstrom?”
“Your father compiled detailed files on the clients he suspected were abusing his methods. I have the files with me. Charles told me to give you access, if you requested it.”
“I’m requesting access.”
Brow furrowed and eyes penetrating, Daniel removed a stack of files and a thumb drive from his briefcase and handed them to Wilson.
“There are fifty-two files in total. Each one represents a different client.”
Wilson nodded as he opened the file on top.
“I’m going to the hospital to make sure the Sun Valley police don’t try any last minute stalling tactics,” Daniel said as he rose and walked to the double doors. “I’ll answer your questions on the flight back to Boston.”
Wilson looked up at Daniel. “Call me if there are any issues. Otherwise, I’ll be there in a little while,” he said before returning to the files.
4
Inflight — Air Ambulance MD-90
A few minutes past eight o’clock, the Air Ambulance MD-90 jet lifted off from the Sun Valley airport. The neurosurgeon, two nurses, and three medical technicians hovered around Charles Fielder in his in-flight ICU while Wilson, his mother, sister, Daniel Redd, and a few staff sat in the passenger cabin, where the seat configuration looked like a typical first class cabin.
Wilson and Daniel sat next to each other at the back of the cabin, an empty row separating them from the others so they could discuss the client files without being overheard. It hadn’t taken Wilson long to discover that each file was a history of seemingly legitimate management practices-senior executive hirings and firings, company reorganizations, high profile strategy consulting engagements, new product introductions, competitor intelligence reports, IPOs, divestitures, acquisitions, marketing campaigns, internal crises, product failures, press releases, and leaked corporate memos-all carefully designed and executed to manipulate the company’s stock price. However, the main focus of the summary briefs was on the abuses each client had resorted to when legitimate activities failed to produce the desired effect on company stock prices.
In one case, a pharmaceutical company, unable to create the desired volatility in the market, purposely tainted its own leading cold decongestant with mild bacteria before ordering a massive recall to send its stock price plummeting. The press was quick to herald the action as one of taking responsibility, while the company arranged to purchase millions of shares of its own stock at rock bottom prices behind a veil of affiliate companies. Within six months, the company’s stock price was soaring well above previous highs, making the CEO a billionaire.
In another case, a major software developer fabricated and then leaked a highly negative and false report about a competitor’s new product to stimulate its own sagging sales. Within thirty days, sales shot upward and the stock price doubled. Then, there was the CEO of a retailing giant who secretly owned several Asian sweatshops. He surreptitiously manufactured merchandise for his competitors. Whenever he wanted to control a supplier or burn a competitor to enhance his own company’s position and stock price, he’d blow the whistle on one of his own operations.
“Your father’s methods were always legally defensible,” Daniel said, his eyes fixed on Wilson. “He showed clients how to establish patterns of volatility through carefully planned and timed management actions-completely legitimate business practice. Believe me, he knew exactly how to avoid attracting undue attention from the SEC. He also stayed off the radar screens of aggressive plaintiff’s lawyers eager to file shareholder lawsuits.”
“If it worked so well, why were there abuses?”
“Clients like Michael Garvey, Chairman and CEO of AikoChem. You read the file. He didn’t have the patience to keep the cycle going through legitimate business practices …”