Kane and Abel/Sons of Fortune Read online

  “I’m sorry, sir, I mean are you speaking to America?”

  “Oh yes, sure. Thank you. Jesus, Henry, they speak a different language over here.”

  Henry Osborne laughed.

  “Now listen. Did you hear about that Interstate Vickers Viscount that crashed at Mexico City?”

  “Yes, I did,” said Henry, “but there’s nothing for you to worry about. The plane was properly insured and the company is completely covered, so they incurred no loss and the stock has remained steady.”

  “The insurance is the last thing I’m interested in,” said Abel. “This could be our best chance yet for a little trial run to discover just how strong Mr. Kane’s constitution is.”

  “I don’t think I understand, Abel. What do you mean?”

  “Listen carefully and I’ll explain exactly what I want you to do when the Stock Exchange opens on Monday morning. I’ll be back in New York by Tuesday to orchestrate the final crescendo myself.”

  Henry Osborne listened attentively to Abel Rosnovski’s instructions. Twenty minutes later, Abel replaced the phone on its hook.

  He was through.

  CHAPTER THIRTY-ONE

  William realized he could expect more trouble from Abel Rosnovski the morning that Curtis Fenton phoned to let him know that the Chicago Baron was closing all the group’s bank accounts with Continental Trust and was accusing Fenton himself of disloyalty and unethical conduct.

  “I thought I did the correct thing in writing to you about Mr. Rosnovski’s acquisitions in Lester’s,” said the banker unhappily, “and it has ended with my losing one of my biggest customers. I don’t know what my board of directors will say.”

  William calmed Fenton down a little by promising him he would speak to his superiors. He was, however, more preoccupied with wondering what Abel Rosnovski’s next move would be.

  Nearly a month later, he found out. He was going through the bank’s Monday morning mail when a call came through from his broker, telling him that someone had placed a million dollars’ worth of Interstate Airway’s stock on the market. William had to make the instant decision that his personal trust should pick up the shares and he issued an immediate buy order for them. At two o‘clock that afternoon, another million dollars’ worth was put on the market. Before William had a chance to pick them up, the price had started falling. By the time the New York Stock Exchange closed at three o’clock, the price of Interstate Airways had fallen by a third.

  At ten minutes past ten the next morning, William received a call from his now agitated broker. Another million dollars’ worth of Interstate stock had been placed on the market at the opening bell. The broker reported that the latest dumping had had an avalanche effect: Interstate sell orders were coming onto the floor from every quarter, the bottom had fallen out, and the stock was now trading at a few cents a share. Only twenty-four hours previously, Interstate had been quoted at four and a half.

  William instructed Alfred Rodgers, the company secretary, to call a board meeting for the following Monday. He needed the time to confirm who was responsible for the dumping, not that he was in much doubt. By Wednesday he had to abandon any attempt at shoring up Interstate by buying all the shares that came on the market himself. At the close of business that day, the Securities and Exchange Commission announced that it would be conducting an inquiry into all Interstate transactions. William knew that Lester’s board would now have to decide whether to support the airline for the three to six months it would take the S.E.C. to complete its investigation or whether to let the company go under. The alternatives looked extremely damaging, both to William’s pocket and to the bank’s reputation.

  It came as no surprise to William to discover from Thaddeus Cohen the next day that the company that had dumped the three million dollars’ worth of Interstate shares was one of those fronting for Abel Rosnovski, Guaranty Investment Corporation by name. A corporation spokesman had issued a plausible little press release explaining their reasons for selling: they had been very concerned for the company’s future after the Mexican government’s “responsible” statement about inadequate servicing facilities and procedures on the part of Interstate Airways.

  “‘Responsible statement,’” said William, outraged. “The Mexican government hasn’t made a responsible statement since they claimed Speedy Gonzales would win the one hundred meters at the Helsinki Olympics.”

  The media made the most of Guaranty Investment’s press release and on Friday the Federal Aviation Administration grounded the airline until the agency could conduct an indepth investigation of its servicing facilities and procedures.

  William was confident Interstate had nothing to fear from such an inspection, but grounding the airline proved disastrous to short-term passenger bookings. No aviation company can afford to leave aircraft on the ground; it can make money only when its planes are in the air.

  To compound William’s problems, other major companies represented by Lester’s were reconsidering future commitments. The press had been quick to point out that Lester’s was Interstate Airways’ underwriters. Surprisingly, Interstate’s shares began to pick up again late Friday afternoon, and it did not take William long to guess why—a guess that was later confirmed by Thaddeus Cohen: the buyer was Abel Rosnovski. He had sold his Interstate shares at the top and was now buying them back in small amounts while they were still at the bottom. William shook his head in grudging admiration. Rosnovski was making a small fortune for himself while bankrupting William both in reputation and in financial terms.

  William worked out that although the Baron Group must have risked over $3 million, it might well end up making a huge profit. Moreover, it was evident that Rosnovski was unconcerned about a temporary loss, which he could in any case use as a tax write-off; his only interest was in the total destruction of Lester’s reputation.

  When the Lester board met on Monday, William explained the entire history behind his clash with Rosnovski and offered his resignation. It was not accepted, nor was a vote taken, but there were murmurings, and William knew that if Rosnovski attacked again, his colleagues might not take the same tolerant attitude a second time.

  The board went on to consider whether the bank should continue to support Interstate Airways. Tony Simmons convinced them that the F.A.A.’s findings would be in Interstate’s favor and that the bank and William would in time recover all their money. Tony had to admit to William after the meeting that their decision could only help Rosnovski in the long run, but the bank had no choice if it wished to protect its reputation.

  He proved right on both counts. When the S.E.C. finally published its findings, it declared Lester’s “reproach-proof” although it had some stern words for Guaranty Investment Corporation. When the market started trading in Interstate shares that morning, William was surprised to find the stock rising steadily. It was soon back up to its original four and a half.

  Thaddeus Cohen informed William that the principal purchaser was once again Abel Rosnovski.

  “That’s all I need at the moment,” said William. “Not only does he make a large profit on the whole transaction, but now he can repeat the same exercise whenever it suits him.”

  “In fact,” said Thaddeus Cohen, “that is exactly what you do need.”

  “Whatever do you mean, Thaddeus?” said William. “I’ve never known you speak in riddles.”

  “Mr. Abel Rosnovski has made his first error in judgment, because he’s breaking the law, and now it’s your turn to go after him. He probably doesn’t even realize that what he’s involved in is illegal, because he’s doing it for all the wrong reasons.”

  “What are you talking about?” asked William.

  “Simple,” said Thaddeus Cohen. “Because of your obsession with Rosnovski—and his with you—it seems that both of you have overlooked the obvious: if you sell shares with the sole intention of causing the market to drop in order to pick up those same shares at the bottom and therefore be certain of a profit, you’re breaking