Rogue Code (27 page)

Daryl wondered how Carol, his wife, was taking this. Then she realized he likely hadn’t told her. What was the point? If things turned really ugly, there’d be time enough to let her know; otherwise, it was just so much needless worry.

What impressed her was Frank’s tradecraft. She was pretty sure that was the word. She’d heard it from her CIA colleagues when she was still with the NSA. She’d always considered him another computer expert, better at handling the ins and outs of bureaucratic politics than most, but she’d never thought of him as a spy.

She knew he’d been an operative, though. On occasion when he had a bit too much to drink, he’d tell stories of that time, but they were always more travelogues than espionage stories. Listening to them, you’d have thought he’d been working for IBM, and he never related an incident that even hinted at danger. But watching Carol during those moments Daryl had noticed some reserve when she joined in the laughter, her hand placed protectively on her husband, a subtle tightness around her mouth.

Carol knew Daryl realized. She knew just how close to death Frank had come in the years before they met.

Now he was employing all that experience and skill to keep himself and Jeff out of harm’s way. Daryl appreciated that he had such abilities, but wished it wasn’t necessary. But his tradecraft had given her an idea.

40

WEST 109TH STREET

MANHATTAN VALLEY

NEW YORK CITY

11:47
P.M.

Frank stood and stretched, feeling the tension ease from his muscles as his joints yielded a slight popping sensation. He looked over at Jeff who’d fallen asleep atop the bedspread in an exaggerated X. Frank was worried about him. Jeff should still be in the hospital under monitoring, not hiding out in a dump like this.

Not for the first time, Frank suppressed the emotions that welled up inside him. He’d never been in precisely this position before, though he’d seen it happen to a colleague in his field days. That hadn’t turned out so well, which was just one more reason he’d elected to fix the problem himself rather than hire a lawyer and fight it out in the system.

He went into the bathroom and scrubbed his face. He’d thought days like this, nights in nameless hotels in the rougher part of town, were behind him. He’d turned in his 007 card and taken to the office and was surprised at how easily he’d made the transition. His bachelor cowboy days were behind him, and he’d transitioned into a suburbanite with remarkable ease. Carol had helped, actually made it possible. She’d intuitively understood what he was giving up and made his reason for giving it up a good trade every day. Then the children had come and there’d been no turning back.

Now this.

Frank wondered just how rusty he was. It was one thing to remember the moves, to still have the contacts, yet another to get into the action. Until now, he’d primarily spent his time on the computer and kept to ground but that was about to change.

He looked at himself in the mirror in the harsh light. He was old, slow. He’d worked at staying fit but only someone who’d worked the field as many years as he had knew how much more finely honed his reflexes needed to be than they were. He’d talked to one of the older agents about it years before. They’d been holed up in Venezuela on a surveillance operation and there was nothing to do but talk, swap stories, and tell lies. He’d asked how the man did it now that he was middle-aged.

“Experience and judgment make up the difference,” he’d said. “There’s no point in fooling yourself that you’re the man you were but you know a lot more, have picked up a trick or two. Actually, what you learn is that most of the action was never necessary, that there’d been another way to do it all along, but you hadn’t known enough to use it.” Then he’d smiled. “Bringing along a young stud like you, of course, always helps.”

Frank wondered if that spy made it to retirement. They’d lost touch after that operation. He hoped so. He wanted to think he had, that he was on a sunny beach where his only concern was drinking too much.

Frank went back into the room and sat before the laptop. He ran through the code again, then began tracing it step by step.

Jeff stirred from his sleep, slid off the bed, and sat on its edge for a long time, muttering something about going back to work, finally rose, used the bathroom, then sat in front of his laptop. As he accessed it an e-mail came in. A message was written across a photograph of two bodies lying in a field, their heads placed beside them like a pair of jack
-
o’
-
lanterns.

STOP
!
DO NOTHING OR YOU WILL DIE
!

WE KNOW WHO YOU ARE
!

YOU CANNOT RUN FROM US
!

THIS IS YOUR ONLY WARNING
!

“Look at this,” he said, suddenly wide awake.

Frank glanced up from his computer, then moved over. “They’re running scared.”

“That’s one way to look at it. Aren’t you troubled that they know enough to send me an e-mail?”

“Jeff, they knew enough to frame us. This just confirms what we already know: There’s someone on the inside in this.” He studied the screen. “This is almost reassuring.”

“You’re a sick man.”

“Not so much. I’ve just been around. Take a hard look at the photo. It might have some useful data.” He flashed a knowing smile. “I’m betting it does.”

DAY SEVEN

SUNDAY, SEPTEMBER 16

SECURITIES EXCHANGE COMMISSION MOVING MORE AGGRESSIVELY

By Gordon Field

September 16

New York
—After years of complaints over alleged inaction, the SEC reports it is now acting more aggressively when wrongdoing on Wall Street is detected. “The days of moving at a gentlemanly pace are over,” Carl Levitt, Director of the Manhattan Enforcement Division, said in a recent interview. Changes in federal law have given SEC investigators more powerful tools and the New York Regional Office is not reluctant to use them when faced with the facts.

“We have broader subpoena power than in the past and can, in specific situations, cause an arrest warrant to be immediately issued,” Levitt said. “Such measures in and of themselves will, we believe, have a sobering effect on malfeasance in the securities industry.”

With the advent of computer trading the SEC has often found itself under attack for moving too late and too slowly. Given the speed with which trades now take place, often within a single second, enormous sums change hands free from direct scrutiny. “We are increasingly concerned about actual abuse and the potential abuses of high-frequency trading,” Levitt admitted. “We now have the means to effectively investigate them.”

Critics disagree however. In a recently published article Tamara Greene, a former SEC investigator, wrote, “The relationship between the NYSE and the major high-frequency traders is more than cozy, it’s incestuous. The Exchange simply makes too much money from these players to want to rein them in. That’s a reality the SEC cannot get around.” No matter how aggressive the SEC is, she asserts, the NYSE consistently runs interference for them.

Levitt disagrees. “I respect Tammy very much, but she’s speaking of a different time.” He then cited several recent examples of the new laws in action. “We issue subpoenas and arrest warrants early in key investigations. Our Enforcement Division now emphasizes its law enforcement capabilities. This alone will have a sobering impact on wrongdoers.”

Greene viewed the changes with dismay. “Turning the SEC into the secret police isn’t the answer. Until the unethical bond between the NYSE and high-frequency traders is broken abuses will continue.”

Others discount her criticism, claiming that the Exchange is not in bed with high-frequency traders. They argue that they are just another player in securities trading who should be regulated for the common good rather than singled out.

Another source, formerly with the SEC and who asked not to be named, stated, “The Enforcement Division of the SEC has turned into a modern Gestapo. They are quick to judge guilt and often move before the facts are adequately known. Their primary concern is intimidation through aggression. In the end, they don’t really care if their targets were actually guilty, just so traders see the havoc they wreak on their lives. It’s hard to believe we still live in America.”

Levitt dismissed the accusation with a laugh, then asked for the source’s identity.

Digital Wall Street

41

ENFORCEMENT DIVISION

SECURITIES AND EXCHANGE COMMISSION

NEW YORK REGIONAL OFFICE

200 VESSEY STREET

NEW YORK CITY

9:07
A.M.

Robert Alshon reviewed the search report from the office used by Jeff Aiken and Frank Renkin with disapproval. His team had done an outstanding job but the forensic examination of the physical evidence had turned up nothing of use to him. The preliminary examination of the computers was negative as well. The pair had been too crafty to be caught red-handed, leaving no obvious trail.

The search of their hotel rooms had been no more productive. The frustrating part was that his people had arrived too late. Their personal effects, specifically their computers, were gone. They’d been alerted by the security system in D.C. and moved one step faster than he had. Not for the first time, he regretted that he could not make the arrests at the same time he’d conducted the search.

Alshon’s supervisor had already expressed concern with the investigation. He wasn’t focused on this case as yet but the message was clear to him. He needed to close the circle ASAP.

His stomach burned. He reached into the right desk drawer for an antacid. He chewed two large pink tablets, then downed them with tepid black coffee. It was Sunday, he reminded himself again. He’d like to be doing something else. He spent too many weekend days in this office.

The good news was that the arrest warrants were out. He’d sent an alert to the NYPD and called his contact at the FBI Manhattan Field Office. With their cooperation he had local assets on the ground and was confident they’d flush his targets. New York was a big city but these two were from out of town, with no contacts. They’d need to use a debit or credit card soon enough, and then he’d have them. Plastic was always the Achilles’ heel for such criminals.

Though Alshon wasn’t all that certain in this case. He’d already tried tracing their cell phones. Both of them were inoperative. Aiken and Renkin had been smart enough to remove the batteries and were no doubt using burners. They’d also have ways to obtain false identities. They might even have access to cash to keep themselves off the electronic grid. He hated chasing spooks. They knew too much.

Alshon’s initial thought had been that this pair were computer geeks and would be easily snared. He’d done it often enough since coming to the SEC. Computer experts could write code and engage in all kinds of chicanery, but when it came to fleeing, they were amateurs. But not in this case, apparently.

Alshon’s immediate concern was how expert they were, what contacts they possessed he could not know about. Had they both or either of them been operatives at one time? He made a note to find out, grimacing as he wrote. The Company would drag its heels, it always did. The supposed post–9/11 camaraderie was a façade. No agency cooperated with another, not unless there was something in it for them or you had a personal contact inside. Not for the first time, he regretted not having cultivated one at the CIA.

But he just couldn’t stand spooks. The CIA was simply sleazy from his experience. They worked in the shadows, never told the truth, and never the entire truth even when forced to come clean. They routinely engaged in misdirection, were never straightforward. In Alshon’s view they were downright un-American in their conduct, and since their creation had caused far more harm than good.

In his experience, they also had an excess of money, power, and resources, and too many agents went into business for themselves taking advantage of what they learned and the contacts they’d made. It was disgusting, and it was a nasty business.

Alshon was forming the opinion that was the case here. He wondered just how far the web spread. Could just two men have done what the IT report claimed? There could very easily be more to this than met the eye. Whose nest were they feathering? How much help would others give them?

Alshon ran his right hand across his scalp. He was sweating. He closed his eyes. God, he wanted to nail these guys, nail them good. But what resources did they have access to? He fought off the sinking feeling that the pair had already slipped from beyond his grasp.

Just then, Susan Flores rapped lightly at his open door. He nodded for her to come in and sit.

“What do you have?” he asked sharply.

“We’re still at it but I know more than when we spoke last time.”

Alshon knew she’d been up most of the last two nights. She looked it. He’d have to back off on pressing her; otherwise, her efficiency would plummet. But time was critical right now, and he had no regrets about his manner. Everyone needed to know this case was urgent. They’d slip into the long-haul mode soon enough if he didn’t catch a break.

Flores referred to her notes. “It’s a big operation, bigger than it initially appeared. Like we thought, it’s been going on for about a year from what we can tell. The software uses a special high-frequency trading algo and exploits its preferred position within the Exchange’s trading platform. We haven’t traced any of the money yet but know that it’s scattered. The algo targets many companies, taking a bite everywhere; it doesn’t steal from within the Exchange itself. Candidly—” She hesitated just a millisecond before finishing. “—we’re wondering if this can possibly be a two-person operation.”

Alshon opened his desk drawer and shook out two more pink pills.

“We think they’ve been at this for several years, moving very carefully as they set it up. We were able to do a ‘before’ and ‘after’ of one of their updates and, frankly, it looks to us like more work than two men can accomplish within a reasonable time frame. It also has all the hallmarks of an inside job. Do these two have connections within the Exchange?” Flores stopped and looked up.