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She makes a move to pour some more whisky into my coffee cup, but I cover the mug with my hand.
“You sure? It’ll help,” she says.
I shake my head no. “I’m okay,” I say.
“Well, it’s helping me.”
She pours herself some more and moves my hand out of the way, topping me off. I smile at her, even though I have barely taken a sip of what I already have. I’m too stressed, too physically off—too close to standing up and busting into the living room, pulling Bailey by the arm into the kitchen with me just to feel like I’m accomplishing something.
“Have you heard from the police yet?” Jules says.
“No, not yet,” I say. “And why isn’t someone from The Shop banging down the door? Telling me what to do when they show up?”
“Bigger fish to fry,” she says. “Avett was their primary target and the police just took him into custody.”
She circles the rim of her mug with her fingers. And I take her in—her long eyelashes and high cheekbones, the one wrinkle between her eyes in overdrive today. She is nervous, the way she gets, the way we both get, before we have to tell each other something that we know isn’t going to be fun for the other person to hear—like the time she told me she saw my quasi-boyfriend Nash Richards at the Rye Grill, kissing another girl. It was less that she thought I’d be upset about Nash, who I wasn’t particularly into, and more that the Rye Grill was Jules’s and my favorite place to eat french fries and cheeseburgers. And when she threw her soda in Nash’s face, the manager told her we were permanently banned.
“So are you going to tell me, or what?
” I say.
She looks up. “Which part?” she says.
“How this is all your fault?”
She nods, readying herself, blowing out her cheeks. “When I got to the Chronicle this morning, I knew there was something going on. Max was giddy, which almost always means bad news. Murder, impeachment, Ponzi scheme.”
“He’s a peach, that Max,” I say.
“Yeah, well…”
Max is one of the few investigative journalists still at the Chronicle—handsome, smarmy, brilliant. He is also crazy about Jules. And, despite her assurances to the contrary, I kind of suspect Jules feels the same way about him.
“He was looking particularly smug, hovering around my desk. So I knew that he knew something and wanted to gloat. He’s old fraternity brothers with someone at the SEC who apparently had the scoop on what was going down with The Shop. With the raid this afternoon.”
She looks at me, not wanting to continue.
“He told me that the FBI has been investigating the firm for over a year. Shortly after their stock went public, they got a tip that the market listing was fraudulently overstated in connection with the IPO.”
“I don’t know what that means,” I say.
“It means The Shop thought the software would be ready earlier than it was. So they went to market too soon. And then they were stuck, pretending they had functional software when in reality they couldn’t sell it yet. So to compensate, and keep the stock prices high, they began falsifying their financial statements.”
“How did they do that?”
“So they have their other software, video, apps, their bread-and-butter business. But their privacy software, the game changer Avett was touting, wasn’t functional yet, right? They couldn’t start selling it. But it was far enough along that they could do demos for potential large buyers. Tech firms, law offices, that sort of thing. And then when those companies showed interest, they put it down as a future sale. Max says it’s not dissimilar to what Enron did. They declared they were making all kinds of money on future sales, to keep the stock price rising.”
I’m starting to understand where she’s driving.
“And to buy themselves some more time to fix the problem?” I say.
“Exactly. Avett wagered that the contingent future sales would turn into actual sales as soon as the software was functional. They were using the faux-financials as a stopgap to keep the stock nice and healthy, until the software was fixed,” she says. “Except they got caught before they got it there.”
“And there’s the fraud?” I say.
“And there’s the fraud,” she says. “Max says it’s massive. Stockholders will lose half a billion dollars.”
Half a billion dollars. I try to wrap my head around that. It’s the least of it, but we are large shareholders. Owen wanted to put his faith in the place he worked, in the software he was working on. So when the company went public he held on to all of his stock options. He even purchased more stock. How much were we going to lose? Most of our savings? Why would he put us in the position to lose so much if he knew anything bad was going on? Why would Owen invest our savings, our future, in a faulty operation?
