Читать книгу Indiscretion - M.G. Crisci - Страница 3

When the phone rang, I had no idea my life was about to change forever.

A cheery southern drawl asked, “Y’all Martin Ruff?”

“What do you want?” I responded brusquely, assuming it was a cold sales call.

“I’m Marge Jamerson of American Financial Advisors [AFA]. My boss, Peter Maroney, spotted you on LinkedIn and wanted to meet. Thought you might be able to help him.”

“You tell Pete I’m good—have an investment advisor and plenty of insurance.”

Marge pushed back. “Mr. Ruff, you got me wrong. Mr. Maroney is one of Connecticut’s successful young entrepreneurs.”

“Okay, Marge, give me a hint,” I said sarcastically. “What does Mr. Maroney do?”

“You need to talk to him directly.” A phone rang in the background. “Sorry, Mr. Ruff, I’ve got to take this call. Back in two shakes.”

I decided to hang up. Marge beat me to the punch. “Sorry about that; as you can appreciate, with 2,000 licensees in three time zones the phones never stop ringing. So, can we set a time?”

The “2,000” caught my attention. I decided, What the hell.

~

My first Pete conversation took place in his modest office in an industrial park overlooking Bridgeport Harbor, about fifteen miles south of snooty Southport, Connecticut.

The conversation quickly denigrated into a sparring match between titanic egos. I brought a one-page bio and an attitude. I wasn’t selling; I was exploring. After all, based on the internet research I had completed, I had more big-time business experience than Pete and his partners combined.

“So, who are you?” said this rough-at-the-edges, athletically configured, forty-something guy with an out-of-date flat crew cut and a red, white, and blue American-flag tie.

“I’m sorry, but who are you?” I retorted.

“Nobody talks to me that way,” said Pete, standing up and leaning by the conference table.

I tilted my chair back and returned the salvo. “Nobody talks to me that way, either.”

Pete laughed. “Looks like you don’t back down from a good fight.”

He glanced at my bio for about 30 seconds and then did a complete 360.

As I was about to learn, Pete — a well-read security salesman with a high school education and sound business instincts — had a grandiose but straightforward vision: worldwide leadership in safe-money asset allocations

He realized that most broker-dealers merely processed and supervised buy-sell security orders placed by their licensed independent financial advisors. As per guidelines established by the Securities and Exchange Commission, they received a modest fee per transaction.

Pete’s concept was to license the best of America’s 1.1 million independent financial advisors and help them grow their practices using AFA investment and insurance products, along with its next generation lead and sales closing techniques. Pete offered the marketing and sales services as a “free added value,” which permitted Pete to charge higher transaction fees to licensed advisors. His ultimate goal: become America’s number one broker-dealer in total trading volume and net transactional revenues.

His five-year plan was to acquire twenty of the most profitable licensed firms, aggregate them operationally by removing administrative duplication, and then launch and cash out via an initial public financing (or initial public offering, IPO). “My backup is to sell the new network to a strategically-aligned financial services company, such as Met Life or Northwestern Mutual, that has the appetite and the means.”

“How’s the plan coming,” I asked.

“Moving in the right direction, just not as fast as I’d like.”

“Why?”

“Our marketing programs are running out of steam,” Pete replied, “and our in-house business consultants need a swift boot in the ass! Some are good; some are bad; some are willing to embrace new ideas; some wouldn’t recognize a good idea if it came up and banged them on the head.”

Pete paused. “Now that I’ve put my cards on the table, how about showing a few of yours?”

“Dad was a wholesale butcher who made a bunch of money with his cousins on the black-market during World War II. He decided he wanted better for his only son. We moved to Park Avenue — far from the family, if you know what I mean. I graduated from Penn undergraduate and got my master's at Wharton. That pedigree, my marks, and a few connections landed me on Wall Street, first as a trader at Merrill Lynch, which eventually led me to deal-making at Goldman Sachs.

“Within five years, I gained an unjustified, over-publicized reputation as a ‘kingmaker.’ Someone who could spot undervalued companies, advise them on how to grow, and design exit strategies that made the management wealthy. I made a bunch of money in the process and decided to strike out on my own.

“I started two public companies from scratch by consolidating undervalued companies in the same business space. My first foray made me wealthy. Maybe a $150 million net worth on paper? The second venture not only destroyed my paper wealth, but also left me $10 million in the hole. I sucked it up, went back to work at Goldman, paid everybody off rather than declare bankruptcy. In the next few years, I accumulated a few million dollars on the plus side of the ledger and bought a couple of multimillion-dollar homes. And here we are.”

~

Pete found my candor refreshing; he leaned back in his chair. “Suppose you could get that hundred million, plus some, back in five years?”

“I’m listening,” I replied.

“Problem is, you’re already fifty-seven.” He sat forward again.

“So?”

“So, I’m not sure you’d be willing or able to work that hard.”

“And I’m not sure I believe your bullshit.”

Pete smiled and leaned back again. “The hell with it; let’s do it. You’re the perfect cultural fit. I can see you’ll charm the pants off my salespeople and the advisors, and intimidate the crap out of them at the same time.”

I was leery; he sounded like a snake oil salesman. “How about we both do some due diligence? I’d like to meet some of your people, get a better idea of what you do. Maybe talk to a few of your field reps. At the same time, they can size me up and report back to you.”

“Sounds good to me,” said Pete.

Over the next two days, I met his three partners — Dawson Craft, Eddie Carr, and Jeremy Costas — who had no clue why I was there. As Pete explained, “they are sorta partners,” which meant they received a share of the annual profits but made none of the big decisions, and they didn’t own a share of company stock (Pete and his family owned 100 percent of it).

~

Pete’s number two, the bald, cherubic Dawson Craft, considered himself a product-development expert who designed innovative securities offerings that fit the “just barely legal” bucket. He had never been married, was a high roller at Indian reservations, and usually fulfilled his sexual needs the “old fashioned way” – he paid for them. The only thing that didn’t seem to fit was a rumor that he’d had a fling with a sexy, dirty blonde business consultant named Alexandria Plummet.

Pete and Dawson had met in high school; they’d waited tables together during their disastrous attempts to obtain college degrees and both loved fast cars. That’s where the similarities ended. Craft, despite his rather homely appearance — 5′ 6″ tall, rotund, bald, with black-rimmed granny eyeglasses — loved to buy at least two women a week. The handsome, athletic Pete preferred one non-paid relationship at a time.

The two friends continually bantered about their approach to relationships. “Give me one reason why a beautiful woman would date a homely dude like you?” joked Pete.

“Pal, I’ll give you three: money, money, and money.”

Dawson fancied himself Pete’s alter-ego, even though he had absolutely no day-to-day operating experience. He had been fired eight times in his career, primarily for telling his superiors they didn’t get his latest product or strategic concept. “Dawson, I love you,” Pete used to laugh out loud publicly. “But God, it’s a good thing I’m here. Imagine if I let you run the company!”

When it came to money, the tables turned. Pete spent every cent he made; he thought money was for spending. Dawson was an oxymoron. He saved first; cold cash meant he’d never have to suck up to anyone. He spent the rest, after the cost of sex, at the blackjack and crap tables at the Foxwoods Casino on the Mashantucket Indian Reservation in Northern Connecticut.

~

Eddie Carr’s name couldn’t have been more prophetic. He was a former race car driver, built like a boxcar, and had a strong mechanical aptitude. His sumo-wrestler physique and happy-go-lucky attitude tended to offset the fact that he was, intellectually, the brightest of the three. “Dad was a neurosurgeon and believed my brother, sister, and I should all follow suit. Two years into medical school, I said, ‘This isn’t for me.’ Dad was pissed, but hey, you gotta lead your own life.”

Pete and Eddie shared an interest in extreme sports and souped-up, lightning-fast cars. They met at a NASCAR race in Old Lyme, Connecticut. Pete, needing a win to crack the top-twenty ranking, was having trouble getting the gearbox of his yellow Lamborghini to shift smoothly during the warm-ups, which could have led his car to stall at a critical juncture during the actual race. Carr, a friend of the event’s promoter, was hanging around the pit area before the race and noticed Pete cursing and struggling. After a quick examination, he volunteered an unconventional adjustment to the intake manifold. “Pal, if we change the ratio of gas to air, your problem goes away.”

Pete asked his pit manager what he thought of Carr’s suggestion. “Pete, you’ve gotta be crazy to make changes like that at the last minute.”

Pete instinctively felt Carr knew what he was talking about and overruled them. Pete won the race and the two became steadfast friends. With Pete, first impressions were usually lasting impressions, so Carr was now typecast as the guy who knew how to fix things. No more, no less. Pete knew his company needed one-of-those at the highest level.

Carr was AFA’s version of a good-old-boy. His primary function was building and monitoring business processes, and modifying infrastructure. His self-effacing, easy-going personality also gave Pete an unexpected bonus: he was a natural at recruiting top salespeople across the United States. They were confident he’d teach them how to sell AFA products using easily understandable terms.

Carr believed the best salespeople were motivated by greed. He lived by a simple selling proposition: “Let me help you make more faster.” In just five years, he had licensed more than four hundred top salespeople and grew AFA to $200 million annually, which was more than enough to support his increasingly grandiose lifestyle.

~

Jeremy Costas owned a state-of-the-art yacht repair shop in Norwalk, Connecticut, that catered to wealthy hobbyists. Unfortunately, he couldn’t make a living in that role and, after filing for bankruptcy, he became an administrator at a national rent-a-truck company. Pete met Costas at the National Entrepreneurs Association’s annual trade show in Orlando. He recognized that Jeremy was exceptionally good at day-to-day detail, something he knew was important but in which he had little interest.

Costas was a stickler for improving his knowledge base, yet at the same time, he was intimidated by rapid change. Pete thought Costas’s volcanic temper tantrums were quite humorous. They reminded him of his past behavior, which he had eventually conquered. “Managing Jeremy is a piece of cake. When he gets nervous, he explodes. I tell him to take the rest of the day off. The next morning, he’s cool as a cucumber. We never discuss the day before.”

As the AFA head of operations guy, Costas started from the point of view that every office expense, every salary, every commission structure was too much, and that every employee wanted to cheat, lie, and steal.

The irony was that the buttoned-up Costas had had a second bankruptcy. He got talked into becoming a lobster boat captain near Prince Edward Island in Canada. After some initial success, he bought a shit load of boats about the time the price of lobster plummeted.

Like Craft, he was not exactly God’s gift to women. At some point, a hot number named Joanne something-or-other had gotten him to invest in a group of five-star restaurants. Within two years, she had embezzled millions, leaving him holding the bag.

~

The business consultants were like a company within the company. They tended to be forty-five and older with significant sales management backgrounds, which gave them credibility with the independent financial advisors they were trying to license. The average consultant made four or five times any other employee.

~

There were ten on-staff consultants, eight men and two women. The men were sarcastic, know-it-all types who were income-complacent and change-resistant, but tolerated by the other departments because they knew Pete, the salesman, was the consultants’ guardian protector.

The two ladies were as dissimilar to each other as the men were similar. They worked hard to know everything possible about their product lines. Give either of them a specific customer portfolio and they could spout product options in their sleep. When they didn’t know the answer to a product question, they went and got the answer.

Barbara Brag, having never been married and in her mid-forties, believed most business people were empty suits, and thought every man wanted to get into her pants. Her strategy: tease them till their tongues hung out and their private parts were about to explode, then push them to sell more and more AFA products. Her “insurance policy” was strategically revealing blouses designed to expose her well-endowed figure tastefully. Despite the book cover, Barbara was extremely stingy with her actual sexual favors. They were reserved strictly for absolutely, positively necessary situations. She was self-confident enough to project a what-you-see-is-what-you-get attitude.

Despite strong ties to Pete’s second wife, Jolene, Brag eventually self-destructed. She decided she was so influential with AFA field advisors that she would start her own firm to compete with Pete, and the advisors would follow in droves. The evening after she resigned, she slipped back into the building and was caught stealing the company’s advisor database. Charges were never brought, but there was no severance package and no competitive company.

The second female consultant was forty-six-year-old Alexandria Plummet. Her persona was the direct opposite of Brag. She was a well-groomed, conservative Midwesterner with two grown daughters. She looked at least ten years younger than she actually was, and preferred to date men of that age. She always said she never mixed business with pleasure. Business was business; pleasure was personal.

Once an advisor was assigned to her group, she built strong relationships based primarily on frequent contact and sheer personal charm, secondarily on the actual business advice she provided. At the time of my arrival, she was one of the highest-paid managers, earning about $350,000 a year.

The story was that Craft and Plummet did business at one of his stops along the way, and he recruited her to work at AFA. Supposedly they slept together on a semi-regular basis. However, evidence of such activity was highly circumstantial at best—most employees said they had a funny way of looking at each other whenever they were in meetings.

Despite her bright smiles, perky demeanor, and solid listening skills, Alexandria never bought into Pete’s added-value mission. She believed that salespeople merely wanted product options so that they could make a quick trade and a big commission. She was stubborn as a rock. Interestingly, she quickly noticed that I could be equally stubborn when I wanted to make a point, so we operated at arms-length – at least initially.

~

My bottom line: AFA was populated by a bunch of business lightweights who were in the right place at the right time. I decided I’d take a pass; the company felt like a glorified Ponzi scheme filled with potholes.

A few days later, Marge called again. She wouldn’t get off the phone until I confirmed a follow-up meeting with Pete. (Later, I discovered the source of Marge’s intense loyalty. Pete learned from his wife that Marge’s husband had beaten the shit out of her in a drunken rage and took their two kids with him. Pete hired lawyers, got the kids back, and had an injunction placed against the husband. Then he hired Marge as his administrative assistant and paid her $80,000 per year, which was more money than she had ever made.)

“So?” said Pete.

“Not sure,” I replied.

“Name the amount. I’ll pay you whatever makes you happy — within reason.”

“Why are you so hot to hire me?”

Pete became candid. “I’m just a kid from the streets who wants to turn AFA into a Harvard Business School success story. I want Wall Street to love us so we can go public or sell to the highest bidder for an obscene amount of money. You’ve been there and done that. I want you to be my exit strategy coach.”

I smelled blood! “Tell you what. I’ll come on board as a full-time consultant for sixty days at absolutely no cost to you?”

“That’s ridiculous,” said Pete. “What’s the catch?”

“If you like what I do, and I like what I'm doing, my compensation package kicks in. But — cards on the table — there must be a significant equity kicker in the deal. I’m not here for cash flow. That’s just to keep you honest. I want at least five percent of the company on a fully-diluted basis.”

Pete smiled. “And you have the audacity to tell me it’s not about the money. How about $30,000 a month salary plus all expenses, five percent of the annual profits distributions, and a five percent equity stake after twelve months?”

The next day, Pete told his partners he had made the hire of the decade and sent a note to the office announcing my arrival. He never mentioned my equity ownership agreement to anybody.

Pete placed me in the office next to his. This pissed off Dawson, Eddie, and Jeremy, who had smaller offices on a lower floor.