THE FLOOR: Episode 1

The Smell of Insider Trading

“Sorry. Could I please get in here, real quick?”

This familiar voice of older, advice-giving female concern is normally calm, but with fancy barrettes and bangs, today’s mid-life Rachel pleads with me to let her scoot in.

She resembles the frumpy 70’s TV character “Mary Hartman” in her retro-chic Laura Ashley dress, not a trader on Wall Street almost 20 years later.

“No problem.” I stand back in the copy room, located directly off of the noisy fixed income (or bond) trading floor here at 245 Park Avenue. We recently moved uptown.

Larry Kudlow (alias “Pinstripes and Brylcreem”) is rambling over the squawk box or “the hoot,” short for “hoot and holler.” His pre-market commentary is muffled by shouted bond orders.

Trading and sales assistants just like me bark, “Lights! Lights!” We encourage anyone with a free hand to answer incoming customer calls. Our phones don’t ring out loud.

They blink silently on a board full of buttons called a “turret.” Nobody is above answering them. Everyone is expected to chip in.

That’s an order from our CEO Ace Greenberg. Faded lights are costly. Missed orders go immediately to a competing brokerage firm down the street instead.

Pinstripes and Brylcreem has already hijacked my abandoned desk for his econ broadcast, while I was in the copy center. My chair was fair game. I did leave it unattended.

Rachel is acting strangely. She frantically makes individual copies, held to the glass with shaking, manicured hands. Averting her eyes from the Kodak flash, she looks back at me with a nervous, vulnerable stare.

Normally doused in expensive perfume, today she stinks.

Something is wrong. I would know.

We worked in adjacent departments at the original location, on the 48th floor of 55 Water Street. It’s funny. She always hovers over the Preferred Department fax machine, like a mother goose. I wish my fax machines disappeared forever, I want a trading job, after “paying my dues” since 1985.

I talked my way onto a bond trading desk at 17 years old and can feel the Bear Stearns family culture erode, since its New York Stock Exchange public listing. Life at Bear went from scrimmage to grudge match very quickly.

The limited partner, who originally hired me, left the firm a few months ago, in a political struggle with our beleaguered department head. We nicknamed her.

Few folks like (nor trust) “Nick,” an imposing woman reminiscent of Wilma Flintstone’s mother, without the hat but the same build.

Blinding me with copier lid open, Rachel insists, “You don’t need $2 thousand stereo equipment, $50 thousand cars and all the toys. Don’t ever let them tell you what to want!”

My studio on 84th Street and Sallie Mae student loan payment gobble my monthly salary. Luxury spending sprees are not my issue. Work is.

My career plans were recently thwarted by some new junk bond migrants from Beverly Hills. A cross-country exodus of salesmen and bankers trickles onto my desk weekly from the shuttered brokerage firm Drexel Burnham Lambert.

After junk bond guru Mike Milken’s conviction, my new rulers reconvene at Bear Stearns by way of (white shoe) First Boston, (strategic) Salomon Brothers or its eventual merger target Smith Barney.

Many of those Drexel workers formed Jefferies. Some traders created Dabney Resnick, a boutique brokerage run by Neil Dabney and Judith Resnick.

Unlike Mike Milken, the sweaty ringleader of these castaways doesn’t promote sales assistants up to trading nor sales positions. He told me this alone in a down elevator, after today’s morning meeting.

Before stepping out, he grumbled, “I always hated you people, the kids who get Wall Street jobs without earning them.”

The irony of his scorn made me chuckle inside, because I come from a middle class family. My parents sent us to great schools, instead of Disneyland.

I am one of Ace Greenberg’s PSD hires. That means I’m poor and smart, with a deep desire for more. My mother claims that I came to Wall Street to see it, not the cash.

She encourages me to go to law school, but I’m tired of the books for now. I want real life, not more theory and practice. I want to see what Wall Street is like inside.

Rachel’s copy job ends with a shaky hug and her earnest reminder, never to let the money ruin everything. She smiles under running mascara, while backing out of the door.

The copy manager Cassandra returns. She dresses just like the female rapper Monie Love with an oversized jacket, matching red Reeboks and doorknocker earrings.

Cassie runs a tight ship and refuses to respond to traders, who freak out at her. Senior Managing Directors (or SMD’s) get immediate attention. Her bonuses allow her to own 30 pairs of red Reeboks, one for each day of the month. Everyone has a different definition of rich.

Cassie’s domain lies down the ramp, beside the restrooms. There are supposedly executive bathrooms reserved for the Ace Greenberg and Kudlow types, but I have absolutely no idea where they are located.

I learn more about this place constantly. My ignorance was bliss.

Like the Greek mythology character with premonitions, this Bronx Cassandra repeatedly foresees trading floor drama. Either she’s psychic or she snoops the documents, when nobody is looking.

“What’s all that about?” asks Cassandra with a smirk.

I propose, “I dunno. Something about not buying expensive stuff.”

She giggles. “No it wasn’t,” Cassie assures me. “There’s something about to go down.” She sings her idol’s hit It’s a Shame, like she knows something I do not.

I make an immediate bolt for the Preferred Stock department to find my adopted Wall Street god-sister. “Nancy, I was just in the copy center. Rachel stinks to high hell. She’s giving me life advice over a stack of axe sheets.”

Axes are orders to buy or to sell securities through a brokerage firm. Large orders are listed on paper then faxed to clients and copied for the entire trading floor.

Nancy scowls, “Go to your desk! Get out of here!” I recoil to my desk 30 feet away.

Standing at my own fax machine, I see bright green bars come across the news feed.

Rachel’s brother works in the bankruptcy department at a bulge bracket law firm. He apparently faxed his sister inside information about individual companies.

She threw her career away for the cost of those same sports cars that she insists nobody really needs so badly.

Regulators caught Rachel investing, with the advanced knowledge of how the court system would award “recoveries” to impaired investors, after bankruptcy or reorganization.

She leaves the industry forever.