The events recounted in my post last week, “PANOPLY OF SWAGGER, PART 2,” took place in the mid-to-late 1980s. It was a tumultuous time for me. I had finally taken my place in the family business — the one I had grown up in — only to discover that the business that bears my name turned out to be a toxic place for me personally.
Specifically, it wasn’t the business per se. The work and the employees were cool. Even Yoshi!
It was my Dad, the founder and CEO, the man I looked up to, who had sadly become erratic and “eccentric.” So much so that, with great reservations, I decided to leave the company and go back to school to earn my MBA. One market crash later, I found that, much to my shock and chagrin, I was back at the very same company in the mid-1990s. Things had not improved.
Last time, I introduced a character named Herby Wellington, a world famous stockbroker and financial genius of the storied Wall Street firm, “Slaminger.¹”
I suspect that Herby persistently cold-called my Dad until he somehow got through. As a matter of course, Dad dodged such calls, occasionally yelling into the receiver and slamming it down in front of the staff at Olcott International. Everybody was entertained. Except, perhaps, for the cold caller broker.
One day, Herby hit pay dirt and must have found a moment when Dad was willing to listen to a pitch to buy stocks. Maybe Dad appreciated Herby’s pull-up-by-the-bootstraps type of personality. Most likely, the allure was enhanced with a promise of guaranteed returns. After all, Dad himself was a “self-made” man who had escaped Jamaica, Queens during the Film Noir 1940s and never, ever looked back.
While I salute Herby’s work ethic, I find that the whole industry of cold-calling stock brokers working on a draw to be less than inspiring. Sure, everybody has the right to make a living. It just strikes me as an extremely unpleasant industry overseen by sales managers reminiscent of the likes of Alec Baldwin’s Glengarry Glen Ross character (hocking, in his case, bad real estate deals).
And the incentive structure all but guarantees abuses.
You see this watch?
While I was at Business School, my Dad had discovered that his large account at Slaminger had dropped precipitously in value. Why? Extremely active trading by Herby had converted Dad’s “principal” into “commissions.” In other words, income for Herby. This is known as “churning.” It’s an illegal practice and, therefore, actionable.
Did I mention “law suit?” Dad loved legal actions. In fact, he considered them a form of entertainment; my post, “CRASHES NEXT TO ROOM 31,” explains how he transformed a beat-up gelded Mercedes Benz from an ugly slow-moving highway obstacle into a crash and cash-creating profit center (via the court system). So he engaged an attorney who specialized in churning cases by the name of Kord Lagemann.
Kord was an intriguing guy. Physcially resembling a Norwegian fisherman serenely contemplating the fjords, all the while smoking a pipe peacefully, he pummeled Slaminger and their lawyers into the ground, forcing them to cough up a million dollar settlement. While I was dismayed to learn that Dad had been defrauded, it seemed like the story ended well enough with a full recovery.
I have already mentioned that Dad qualified as somewhat eccentric. As he aged, unfortunately, he became more susceptible to spurious investments. Maybe he just had bad luck with Herby. I had my doubts as a result of my own experience with the financier from Slaminger. In “PANOPLY OF SWAGGER, PART 2,” I described how I had opened my own account with Herby. As opposed to my Dad’s, my account was much smaller — and as such eluded Herby’s penchant for churning. In fact, he could only buy me one stock. Which one did he buy? It don’t make no nevermind; whatever it was, it went down immediately.
In any event, as I came back to Olcott International in 1992, Herby was a distant memory.
A couple of weeks after Dad was rear-ended in his money-making Benz outside the Kuklinski Memorial Motel on 30th Street (the one with the corpse under the mattress) (honestly!) in 1994, he drove to work in a most unusual way. The putt-putt-putt sound of his anemic, addled Benz motor was replaced with smooth purring of a high performance engine. A modern inline 6. The brown rusty Benz was nowhere to be seen.
What was Dad driving?
It was bright red.
And brand new!
A shiny new 1994 red BMW 3 Series sedan.
True, this was a much safer car.
But completely out of character and therefore immediately suspect. Dad hadn’t bought a new vehicle since he had been married to Gloria, or my Mom, for that matter. That was a decade (or decades) ago. How was he going to disable the pistons on current automotive technology?
One of my Dad’s last cars bought new. A 1959 Cadillac El Dorado, purchased during the Eisenhower Administration. Mom still likes Cadillacs.
“Dad,” I asked, “where did you get the new Beemer?”
“A few days ago,” was the evasive response. Further details were not in the offing.
At least not from Dad. It was Mike the Accountant who dropped the bombshell later on. Dad didn’t buy the BMW. He probably wasn’t capable — psychically I mean — of buying a brand new car off a showroom floor; it didn’t align with his sense of penury.
The car was a gift. From whom?
Herby Wellington! Dad had opened a new account with his old friend, Herby, and was on his way to earning millions! Whether the anticipated windfall was for him or for Herby was much too vague for my taste.
Again!! Oy vey! I couldn’t believe my ears.
Would you approve of your elderly parent reinvested with a former stockbroker who had churned him?
Dad wouldn’t entertain any discussion about his new financial partner. None whatsoever. He would just fly into a rage and walk off.
¹ – Both of the names “Herby Wellington” and “Slaminger” are fictitious. I just googled Herby’s real name and found that he had moved out of the NYC region years ago, ostensibly to flee his legal problems. Sadly, since then, he has been sued for fraud repeatedly in his new home state. I admire persistence, and I know what hard luck is. Nevertheless, Herby, may I encourage you to go straight?