Financial Suicide

Short Story
ESTIMATE 6-MINUTE READ

A Wall Street executive climbs the corporate ladder before the world comes crashing down.

Backdoor Deals

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Dylan is a high-power executive at a Wall Street investment firm. With a generous bonus, his annual salary is 7-digits. The company successfully packages the illusion of trading.

Catering to deep-pocket investors, they base grandiose dreams and investment portfolios upon internal formulas and heuristics. They migrate risk to the clients with the oft-quoted disclaimer, “Past performance is not indicative of future results.”

From customer cash received, 50% goes toward stable yielding stocks and bonds. Another 20% is put into promising medium-yield stocks. According to the books, the remaining 30% of investments are in high-risk stock with poor performance.

In actuality, the company keeps that last 30% in their bank account. It’s cushion during stock market crash selloffs. When clients ask the firm to sell for pennies on the dollar, the company pockets the whole dollar.

Ever increasing salaries and bonuses are dipping the reserve cash to 15%. Dylan brings this up with his boss. He responds by reducing the amount actually invested in behalf of clients. Dylan recognizes that pocketing cash and investing less can lead to financial suicide during a significant stock market shift. The handwriting is on the wall. Executives are leaving with large severance packages.

Stock Market Crash

Then the earth moves. A war breaks out in the East that threatens distribution of natural resources. Like dominoes, countries begin withdrawing commodities from the global market. Gas, food, and transportation prices soar. Essential technology chip availability is constrained. The stock market teeters, then crashes.

A few clients of the firm cling tight to their investments. Others ask the firm to shift assets to more stable positions like bonds. Concern turns to panic as an increasing number of individuals demand the value of their stock for immediate withdrawal.

The reputation of the firm and its cash reserves are in a downward spiral. During an emergency board meeting, the firm discusses options.

Ultimatum

The Chief Financial officer presents the grim profit and loss statement with future projections. Darren McGaven, the Chief Operating Officer, then asks members of the board for suggestions. They conclude that salaries need to be cut and 25% of executives require termination. McGaven leaves the meeting and calls Dylan aside into his office.

“You know we’re battling a bear market. Can you get by on a 20% salary decrease with a moratorium on signing bonuses?”

“That would effectively cut my income in half!” Dylan complains.

“We’ve paid you well throughout the years and value you as an employee. Hopefully, you’re willing to ride out this storm with us and remain for the long haul.”

“I’ve seen how many employees are walking out the door. You’re asking me to work harder and fill their shoes for much less money.”

“This is an industry-wide problem. I’m trying to keep you employed.”

“Before the crash, my warnings that the firm was depleting its safety net were ignored.”

“Dylan, we adapted as best we could. Even with a better financial picture, we would only have lasted a few months longer—maybe six?”

“Stock investments are toxic while everything is in free fall. But there’s a need for more clients who will infuse us with cash.”

“There are some noteworthy deals on blue chip stocks. When the market rebounds, investors can double or triple their profits. You can consider the same to offset your salary reduction.”

“Let me sleep on it and give you my reply by the end of week.”

Suicide

Over the years, Dylan has grown his lifestyle to fit his exorbitant salary. Without tightening his belt, he could continue nine months on his savings. By cutting back on travel and shrinking the parties he hosts, his cash could stretch out for a year.

Lasting longer would require liquidation of some assets. So it seems, he has a comfortable cushion and opportunity to shop for a new job with hopefully less shady business practices.

He replies to his boss on Friday, “I’m sorry, to decline that offer. Please accept my 30-day resignation notice.”

The notice is a symbolic gesture since Dylan is escorted out of the building that very same day. His superiors fear he may use the time to poach clients. However, they are obligated to pay accumulated vacation time and salary throughout the 30 days.

Dylan doesn’t expect the stock market crash to last as long as it does. Nor does he imagine it would be so difficult for a successful executive to find another job. There are at least a hundred applicants for every available position. Efforts to pivot to a management position fail. Employers blame greedy Wall Street executives for the recession.

At nine months, Dylan must execute another plan. Knowledge of his prior firm’s mishandling investor’s assets can provide some leverage. He requests his former job back with the 20% reduction in salary. But it is denied.

So he decides to bring down the firm as a whistleblower. After presenting a statement to the U.S. Securities and Exchange Commission, he becomes State’s witness.

During the investigation and subpoenas, the firm deduces the likely witness. On the night before Dylan is to testify before the Grand Jury, he is found dead in his bed, of drug-induced suicide, according to the medical examiner.

The SEC feels the death is suspicious. But without the star-witness testimony, they withdraw their case against the firm. Within six more months, the firm dies of its own suicide when it files for bankruptcy.

The End

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