DAY FOUR THURSDAY, SEPTEMBER 13

HIGH-FREQUENCY TRADING UNDER SCRUTINY

HFTs Alleged to Harm Markets

By Frederick Z. Isaacs

September 13

Computers have reduced costs, increased participation, and improved the efficiency of stock markets the world over, according to the annual report of the Institute for Market Awareness. In its just-released report, institute president Arlene Bliss wrote that computers have linked exchanges, streamlined trading, and accelerated the flow of information, all of which has served the best interests of investors. But the report also cautioned that for all the good computing has brought to securities trading, it is now being used in ways not previously anticipated. The primary culprit is high-frequency trading while the driving principle is unparalleled greed.

HFT, as it is known, exploits the ability of supercomputers to execute trading opportunities in nanoseconds. Their highly sophisticated algorithms seek out price differences, then buy and sell at unbelievable speeds. The secret algorithms are referred to as Black Boxes.

Now that they dominate most major trades high-frequency trading companies are seeking new ways to leverage their advantage. The NYSE for one makes this easy by allowing new algos to be tested on their system without notifying them. More than once, such tests have caused serious disruptions in regular trading yet they are still permitted. In addition the NYSE allows HFTs to buy proximity location beside its super engines, giving them an advantage that others cannot exploit.

Competition with other exchanges is cited as the reason for NYSE behavior. “Administrators believe that if they do not allow proximity location or the testing of sophisticated algos other exchanges will and the NYSE will lose its advantageous place in world trading,” the report says.

Critics point out that such measures create tension between the need for security within the trading platform and the desire by the NYSE to serve the demands of its major, and favored, players. “While playing favorites raises the issue of fundamental fairness,” Clara Derns of the Investors Action League says, “its willingness to accept freewheeling algos and to grant favored access is courting disaster. The day is coming when the system will suffer a cataclysmic collapse because of high-frequency trading. It is inevitable given the current practices of the NYSE.”

According to the report, “NYSE is confident that high-frequency trading can be effectively managed. There is no reason for undue alarm.” The report concludes that such optimism is unwarranted.

Everyone in the industry knows that new regulatory controls are coming. While it is unlikely they will end the abuses of HFTs they will certainly make their current practices more difficult. In retrospect, these may well be seen as the halcyon days. The consequence is that greed is sure to drive these mysterious traders to even more extreme actions, which could create worldwide economic instability.

Bliss declined comment beyond what is contained in the institute’s annual report, adding only that she has grave personal concerns about the future for traditional market investors.

Internet News Service, Inc.

22

GRUPO TÉCNICO
RUA ADOLFO MOTA
GRANDE TIJUCA
RIO DE JANEIRO, BRAZIL
11:46 A.M.

Pedro Bandeira entered the company office and was taken at once by the sense of urgency. His three employees were in their cubicles, each working intensely on their computers. He nodded in satisfaction as he passed through to his corner office opposite the door. Preparations to launch Carnaval were in full swing now. What had been a new dimension of the ongoing effort, one intended to be brought out for each major IPO, had in a single conversation become the primary effort. And his father’s orders were explicit: Get as much as possible, then vanish and cover their tracks. He wanted no less than a $10 billion payday in under one week.

Ten billion dollars.

Pedro could scarcely conceive of such a sum. To take so much, in so short a time, to move it away safely, all was a challenge and no one involved was convinced it was possible. But he was determined to do this right, to make it the crowning success his father wanted.

Located a few blocks from the famous Maracanã football stadium, the office for the generically named Grupo Técnico was housed in a former mansion. Built at the turn of the last century it was a simplified form of the classic Portuguese Baroque style. When the wealthy abandoned this quarter of Rio, the building had been converted into apartments for a decade, then reconverted into office space. One of the cartel’s legitimate companies had acquired the building, then remodeled it for Grupo Técnico, which used only the second floor.

A reception desk sat before the two enormous French doors of the main entrance. It was here the interior guard normally sat with his surveillance monitor. Behind his chair was a waiting area with two burnt orange — colored overstuffed chairs and a matching couch. To the left were doors to break and storage rooms. The right side consisted of the wall, still displaying the original murals of romantic country scenes, the colors now faded to irregular pastels, with long windows overlooking the exterior, where an English-style garden had once been. To the rear of the salon and to the left of the couch was a rear door. On the other side was the staircase, which turned once at an angle to the right, leading up to a landing. Around the second floor was a narrow mezzanine that led to the former bedrooms and living quarters. The Grupo Técnico offices were at the immediate top of the landing, where they had a clear view to the large room below.

The building was set just back from the center of a large square parcel of green. For security concerns, the overgrown trees had been removed along with the shrubbery. Nothing remained of the former luscious garden but a flat expanse of grass broken only by a single asphalt driveway ending in a circle at the front doors. In the rear, to one side, was a helicopter landing pad, occasionally used by Victor Bandeira. On the opposite side of the lot was a long low structure, once a horse stable, that now stored gardening tools.

The grounds were surrounded in typical Brazilian practice by a high block wall topped first with glass and metal spikes, then with four feet of electrified wire. The building itself was visible from the street only through the oversized ornate automatic metal doors for cars. Beside them was a door for pedestrians while just inside was a sentry box, concealed within the compound.

Security cameras, with night-vision capability, covered both the exterior and interior. The monitors were manned on the first floor twenty-four hours a day. In addition to the sentry there was always at least one guard on foot on the grounds of the mansion and within able to respond on a moment’s notice. Three in all, four if you counted the entrance sentry present during the usual workday. For all this, the security was discreet and nothing to the outward eye brought attention to the company.

Pedro lived within walking distance of his office near the Quinta da Boa Vista, the park where the historic Imperial Palace was located. This wasn’t the very best part of Rio but it was nice enough for his taste. He disdained the ostentatious lifestyle of some of those he’d grown up with and often found his father’s pretension an embarrassment.

Pedro had successfully managed to keep surveillance cameras out of the work area and the rear patio, where he and his staff took breaks. César came by from time to time for a security inspection. There was nothing Pedro could say to prevent that.

For all this the security was not really all that much greater than for many businesses in Rio, where theft was institutionalized. Uniformed armed guards were a common sight and Pedro could have named any number of businesses with significantly greater security.

Lunch with his father had brought no new information, though perhaps a bit of insight. Pedro’s mother had already told him the truth about his father years before. Even then, it had come as no surprise. He’d known since childhood that his father was senior in the Nosso Lugar cartel in São Paulo, later chefe. His school friends told him, and at first, it had been like being told there was no Papai Noel. He respected and adored his father. To learn he was a criminal had been the cause of more than one school fight.

In the end, he’d decided that it was of no concern to him. He led his own life, let his father live his. Then, like a thunderbolt, had come the divorce. There’d been some divorces among the parents of other students but it was rare, and frowned upon. The children of such families were taunted.

Angry, and over his father’s objections, Pedro had dropped out of school. The more the man insisted he return, the more determined Pedro was to stay out. More than once, he’d dared his father to hit him as Brazilian fathers had a right to do but the man resisted, though clearly he’d been tempted. The worst times were at the family house, which his father had kept in the divorce on a day when one of his mistresses was there. These were women younger than Pedro, women who’d given him the “look” as his friends called it, telling him they were available if he was interested.

It was disgusting. How could his father abandon his wife for such women? To keep them on the side, out of sight, that was tolerable, but this …

Pedro had been more driven than ever, spending his nights in upscale nightclubs, drinking and smoking too much, indulging in soft drugs, engaging in careless sex, angry, headed for trouble. Finally, his mother had confronted him, persuaded him to return to school, then later, to work for his father.

“You are his only son,” she said. “You must.”

“The only son you know about,” he’d answered, his eyes slipping away from hers as he spoke, regretting his words at once.

Esmeralda hadn’t missed a beat. “You are his only son by his wife and that is what matters.”

Pedro had consented as much out of curiosity as obedience. Anyway, he was sick of the life he was leading. What, he wondered, did his father really do? Yes, he was a criminal but in Brazil that could mean many things. Were the stories of drugs, prostitutes, and extortion true? His classmates had no doubt. His father said he was a banker. At least that’s where his office was. Pedro had met the president of the republic there. He’d met other important figures as well. Did such men associate with chefes? And why his interest in computers? Could his claim that he wanted Pedro to run a legitimate company be true?

The only real surprise at the lunch was learning how his grandparents had died and that he’d once had an aunt. He’d been shocked to hear his father speak in that gutter dialogue of the favelas, impressed with the way he shed it so easily and returned to his usual speech. Leaving the house afterwards, he’d wondered which was real. In which language did his father think?

Renata Oliveira entered his office. “We’re already having trouble with Carnaval. I’m really concerned.” In her early thirties, Renata was a single mother. She was nothing but business in the office. With average looks she was in no danger of turning heads and neither of the two male employees had ever shown an interest in her, for which Pedro was grateful. She was steady and very hardworking.

“What kind of trouble?”

She took a chair and scanned her notes. “The trade matching engine code in New Jersey has been updated, and we’re having to take time away from Carnaval to adapt our code.”

“We’ve done that before.”

“Yes, but never with so much more that has to be done and very little time. The major problem with Carnaval is we have to wait for the next update to get our revised code in. There’s only one scheduled between now and next Wednesday. There might be more given the problems they seem to be having, but we have only one definite shot and have to hit that mark.”

“Can we?”

Renata looked uncertain, then said, “I think so. We’re also busy creating dozens of holding accounts with multiple layers of misdirection through which to funnel the money. But it’s a lot, much more than Carnaval was intended for originally, and we almost can’t have too many of these. I’d feel better if we had hundreds. But I worry about mistakes with that and the coding. Everyone’s tired and going to get even more tired before we are finished. Most of the team has been up since you told us the new priority.”

“The confusion and activity of the IPO will help to hide us.”

“Of course, but we can’t depend on that alone.”

No news there, Pedro thought. “So how’s it coming?”

Renata looked nervous. “Slowly I’m afraid. But we’re working flat out.”

“Whatever you come up with will have to do.” His mouth turned dry. “What else?”

“With the target number you’ve given us we can only get half from the IPO without having the Exchange shutting it down. We’re running analysis to identify the high-volume, highly volatile stocks we need for the non-IPO companies we can exploit through Vacation Homes. Again, we need a lot of them so when we pull out money, it will appear anomalous. We require very specific stocks to make this part work. I could use ten more people.”

“That’s not possible. But I’m back and will work with you. We’ll make it. You’ll see.”

Renata nodded, looking doubtful, then returned to her desk and went to work.

It was times like this when Pedro really felt in charge of the company. At first, Abílio Ramos had been the actual boss. No one had said it, but Pedro understood. He’d set up his father’s gambling operation, even spending time in Costa Rica until he had run afoul of authorities. After that the operation had become fully computerized with operations spread worldwide, serving more as the middlemen for the major online gaming operations. Ramos had done a good job from what Pedro knew, and at first, he’d been a bit in awe of the man.

Even after Ramos had left Brazil, the two had talked nearly every day and still did before Pedro’s team did anything significant. Pedro’s father required it. “We must be on the same page,” he said.

Pedro could see the truth of that as what they did was complicated; not just the doing, but the concealing. Yet it still irritated him that he had to check in with Ramos. Now that they were in the final phases of the biggest operation yet he and Ramos communicated every few hours.

Pedro leaned back in his chair. Ten billion dollars. Was such a sum even possible? He’d expected to work at Casas de Férias, Vacation Homes, for at least another four or five years and anticipated taking perhaps a billion dollars over that time. That had seemed like a lot to him.

Now to learn he must increase the take ten times and set it up within one week, execute it on a single day, within the window of a few short hours, was almost overwhelming. But he’d been fascinated at the prospect. The systems were in place. They had plenty of experience moving the money and hiding their tracks. And the code his people had devised was elegant, beautiful to watch operate.

What would taking such an amount do to the world financial markets? Casas de Férias had been created on the assumption that money would be removed from many unrelated transactions, spread over time and distance. Any one company would feel the pinch but the high volume of trading activity, the usual fluctuations in price, would serve to mask what was going on. If anyone suspected what had happened, they’d be a lone voice complaining about it. The Exchange wasn’t going to admit that an operation like Casas de Férias was possible, that their Holy Grail, their servers, had been hacked. Not even if they found the code, not even then would they acknowledge it. No, the beauty of what NL did was that their primary target would ultimately work just as hard to hide what they’d done as they did. It was like burglarizing a mansion knowing the owner would never call the police.

But Pedro’s gut, his common sense and his experience, told him that $10 billion in a single day was too much, too risky. Even Ramos, so devoted to his father, had expressed reservations. Would the Exchange conceal a loss of such magnitude? Could it even manage to?

But this wasn’t his concern, Pedro reminded himself. He had his instructions. What rankled was the necessity. He still had no idea what had gone wrong. Ramos had said nothing to him nor had his father but something had. Five years they’d been at this, four of them to set it up, to begin earning, and now this.

It was someone, Pedro thought. Not code error but human error. It had to be. That was nearly always the way. The fewer people involved with an operation like this, the less likely there’d be a mistake. But they’d never have pulled it off without inside help and that was always the weakest link.

For all the interest Pedro had in the outcome, for all the money he and his team would make, for the satisfaction he’d feel at pleasing his father and mother, he had already decided to walk away. He’d thought he’d be at this another few years. Now he realized he could leave within a few weeks. The reality had come to him the night before, as he’d gone to bed and his excited thoughts at the pending prospect had kept him awake until almost dawn.

The fact was that he didn’t want to be a criminal. He’d watched his father closely since coming to work for him. True, he lived an opulent life and exercised great power, probably more than he realized Pedro knew, but how could he sleep at night? How could he live constantly looking over his shoulder, with César and his men always there? That wasn’t the life Pedro wanted for himself.

The pressure of Carnaval and the expanded Casas de Férias was bringing his fears and suppressed aspirations to the surface in ways he’d never experienced before. He had friends who had no idea who he was. That was one reason why he’d insisted in locating the company in Rio, away from his father’s interests. He’d also insisted the company be legitimate from all appearances, that it conduct itself exactly as a legal operation did. He liked being accepted for who he really was, not treated with respect by those wanting favor with his father. He’d had too much of that in his life.

And he needed to leave soon he’d decided, which meant Carnaval was an opportunity. The longer he stayed, the more deeply he’d be pulled into his father’s world.

Pedro turned to his screen as he heard the familiar Skype sound. Ramos wanted to talk. Pedro sighed, pressing back in his mind the one nagging thought he’d had since lunch the previous day.

Would his father let him go?

23

ENFORCEMENT DIVISION
SECURITIES AND EXCHANGE COMMISSION
NEW YORK REGIONAL OFFICE
200 VESSEY STREET
NEW YORK CITY
4:01 P.M.

Robert Alshon, senior SEC investigator, picked up the telephone. “Susan? Could you come by my office at once? Thank you.”

Alshon was busy with the printed sheets in front of him when Susan Flores knocked lightly at his office door. She came in and sat down in an armed chair in front of his desk. She was not yet thirty years old, single, of average size with long jet black hair. She was part of Alshon’s team but was more than a little intimidated by him. His expectations were always difficult. She raised an eyebrow.

“We’ve got a hot one from the SSG at the Exchange.” SSG was the Server Systems Group of the Infrastructure Management Department of the New York Stock Exchange. They were the digital cops responsible for detecting irregularities within the code, but especially potential criminal conduct. Alshon met her eyes with that same intensity he always showed at the beginning of a chase. Forty years old, formerly with the Federal Bureau of Investigation before joining the SEC, he handled “big ticket” cases of insider or fraudulent trading. He was broad shouldered, with short clipped graying hair and a trim black mustache. He was known as a bulldog for his relentless investigations and attention to detail. Arrogant and on occasion nasty he was the best and Flores considered herself lucky to be part of his investigation team.

“They’re still at it, so we’ve got a chance to catch them red-handed,” Alshon continued with obvious pleasure.

“How big?” she asked. When it came to securities, she’d once told a girlfriend, size was everything.

“I can’t say at this point. That’s one reason I want you on this. The scope is extensive. A rough guess would be in the neighborhood of eight to twelve million dollars, though if it was twice that, I wouldn’t be surprised.”

“How long?”

“They don’t know; likely only a few weeks. It’s a pretty clever operation but then they’re exploiting a position of trust. That always makes access easy.”

“What do we know?”

Alshon leaned back in his chair. “Some weeks ago, Stenton’s team spotted a random bot on their system. It was one of those auto-spreading robot things that never should have got by their defenses. They were due for a penetration test so decided to bring in an outside team, someone new for a fresh approach. They hired some genius out of D.C.”

“I read about the bot on the way in this morning. Who’d they hire?”

Alshon looked back at the report. “Jeffrey Aiken, Red Zoya. Know it?”

“Not the company but the name sounds familiar. It will come to me.”

“I’m talking to Gene when we finish and will have him get me all the info on this Aiken guy and his company.” Gene Livingston was the team’s primary researcher. “Anyway, it seems they’ve had some success and a few days ago penetrated the New Jersey engines.”

“Wow. They tell me that isn’t possible. How long did it take?”

Alshon grimaced. “Something like two weeks.”

“That’s impressive.”

“Maybe not. They may have been working on this for a while.”

“If that’s true, it’s quite a coincidence them getting hired for the penetration test.”

“Good point.” Alshon leaned forward and wrote a quick note to himself. “Maybe there’s more here than meets the eye. Bill Stenton hired them. I’ll have Gene look for a connection.”

“Bill’s clean I’m sure.”

Alshon smirked. “Trust me. You never know. Anyway, IT says they’ve been inside a few days but — now, get this — they’ve not reported the penetration. And they’ve been doing some very funny things in there too.”

“You know the timing is interesting.”

“How’s that?”

“There’ve been reports for months now from brokers about unexpected losses.”

“They’re always complaining, looking for someone to blame.”

“I know, but I understand Bill has received a series of complaints about trades coming in well under projection. He’s been looking into it. Maybe that was the real reason for the test.”

“How much are brokers reporting?”

Flores shook her head. “I don’t have figures but I understand it’s in the tens of millions, more than a million per incident in some cases.”

Alshon made another note. “I’ll have Stenton prepare a report for me of these incidents once we clear him and tell him what we’re up to.”

“What do you want me to do?”

“I’m forwarding the IT report to you. You’ve got access. I want you to go in there and take a look at what they’re up to, confirm suspicions. I don’t like trusting an outside party. Be sure they don’t see you in there. In the meantime I’ll turn Gene loose. I’m going to move fast on this one. My gut tells me we don’t have a lot of time. It’ll be good to catch them in the act. We’ll talk next morning. You’ve got a long night ahead of you.”

“All right. When is this penetration test supposed to wrap up?”

“They don’t know. It should already be finished, but like I say, they’re still in there, doing God knows what.”

“All right.” Flores stood up and moved toward the door, then stopped and looked back. “You know, sir, there could be a good reason why they haven’t reported penetration yet. That by itself isn’t suspicious.”

“Read the report,” Alshon said with an edge. “There’s two of them on the team. They’re a nasty piece of work. They’re both ex-Company men. I’ve had experience with this kind before.” He glanced at his wristwatch. “Stay on this and keep me updated. I’m catching the shuttle to D.C.”

24

HOLIDAY DAY INN EXPRESS
WATER STREET
NEW YORK CITY
5:06 P.M.

“I’m having a beer. Want one?” Frank asked as he went to the minibar in his room.

Jeff shook his head as he sat. Frank passed him a bottle of water. “Let me tell you where I am. I still don’t know what those numbers in the hidden file mean, but I’m filling in the holes around them. I’ve been focusing on what the code does. It looks like it interacts with another component on the trading servers. It seems to search for particular conditions within defined trades, then takes part.”

“And it’s malware.”

“Absolutely.”

“So whatever it’s doing is bad. Sounds like it’s taking money. What else would malware be doing within the Exchange’s trading engines?”

“Almost certainly, one way or another. I suspect that it’s found a way to get into legitimate trades and take a piece of the action. I can’t be sure, but I think that’s it. Everything fits.”

“If it did that, the Exchange’s security would catch it.”

“I think it’s more sophisticated than that.”

“Those numbers might be accounts. Maybe those it accesses or where it sends the trades.”

“That’s what I’m thinking, but they could be anything. I’m hoping to puzzle it out tomorrow. I know we need to close this engagement out but I really want to understand what is taking place.”

“The report’s about finished, except for what you’re doing. Do you have a meeting set?”

“I called to schedule it,” Jeff said.

“When?”

“His secretary’s supposed to get back to me.”

“Is Stenton out of town?”

“I don’t know.”

“You’d think he’d want to hear what we have to say. Did you read the Times today?” Frank gestured at the copy he’d picked up earlier. Jeff shook his head. “The bot that got us this gig is in the news, in the financial section. According to the article, a former Exchange employee revealed all the details, and there’s a fracas since the New York Stock Exchange security is supposed to be the best in the world.”

“The bot was harmless.”

“Not according to the article. The ex-employee is claiming all kinds of damage has been done and the Exchange, in particular Stenton, is covering it up. The article suggests that the extent of the malware is vast.”

“Wow.”

“And the stock market tanked today, down something like ten percent, a record of some kind.”

“Think about what would happen if they knew what we’d found.”

“Jeff, imagine what would happen if they knew what we’ve managed to do in such a short time.” Frank paused, then continued, “Stenton told you this pentest was urgent, and it turns out he was more than right. Just the two of us pulled penetration off, Jeff. Think about it. We might be geniuses, at least that’s what I tell my wife, but there are plenty of bright geeks out there. If we can do it, so can they. How many others have got in there? For all we know the Exchange computers are leaking like a sieve. Stenton needs to hear that, and see how we did it. Just from what we’ve found they’ve got a lot of holes to close and procedures to tighten. That’s especially true with the heat turned up.”

“Yeah.” Jeff shrugged. “I understand but if he’s in no hurry to get our report, that’s fine with me. In my opinion, this malware is more important than the fact we managed the penetration, especially now. I think we need to know what’s going on before we report. Another day should give us some answers. We’ve worked pretty fast so we’ve got the time.”

They sat in silence for a bit; then Frank said, “What? You’ve got that look.”

“Nothing really.”

“Come on.”

“I’m probably just reading something from nothing. But Stenton’s secretary sounded … I don’t know … uneasy. I can’t put my finger on it. I was probably just tired.”

Frank grunted. “Now that you mention it I’ve caught a few looks in the hallway.”

“What do you mean?”

“Nothing that registered at the time, just looks. Is something going on we don’t know about?”

Jeff shrugged. “If we don’t know about it, how would I know?” He grinned. “You sound paranoid.”

Frank sighed. “I just want to get home. I miss everybody.”

“Well, I’m going for a run. We’ll save the world financial system tomorrow, then get back to our lives.”

25

CENTRAL PARK
NEW YORK CITY
6:13 P.M.

Jeff finished his first lap of the Lower Track. He hadn’t run enough since coming to New York. Only now were the kinks easing out of his body. As he reached his start point, he picked up his pace, settling into the mile-eating stride he ran back home.

This project was turning out to be much larger than he’d anticipated. He’d been flattered when Stenton first contacted him. Though Red Zoya had done work for other well-known institutions, most of what it did was behind the scenes, often not even known in the cybersecurity community. An engagement such as this was very high profile. Their successful penetration of the trading platform of the New York Stock Exchange would get out, he had no doubt. Even though there was a standard confidentiality clause in the contract, one he would keep, a number of employees at the Exchange would know what they’d done, they’d chat about it through social media and post their thoughts online. Word would spread and the result would be even more high-profile projects, and though money wasn’t primarily what this was all about, it was an important component. If what he thought was about to happen took place, he’d need to expand.

Which returned his thoughts to Daryl. If he was going to build Red Zoya, there was no one else he wanted to build it with. Even Frank for all his expertise and abilities was at heart a family man and at this point in his career could not be expected to give the time to the company such an expansion would demand. As Jeff thought about how to do this his mind returned again and again to Daryl. Her ability, her contacts, how they worked together were simply perfect.

The other side of all this was the idea that maybe he’d been wrong about them. Everyone who knew the two of them told him he’d made a mistake. Sometimes outsiders see things more clearly than those involved do. Wasn’t that the nature of a pentest after all? You take for granted what you know. It’s someone on the outside who can see the strengths, and weaknesses, clearly. Maybe the fact that he had had no interest in anyone else during the past year was telling him something.

As Jeff finished his second lap, he picked up the pace again. Would Daryl even want to come back? Was there any point in considering it? For a second he thought about presenting it to her as a strictly business proposition. Red Zoya needed her, they worked well together, with their combined experience and contacts the company would thrive.

He almost laughed out loud at the thought. No, if they got together again, it wouldn’t be only as business partners. At the least there was too much history. And there was no denying the strong mutual physical attraction. A purely professional relationship, at least for him, would be out of the question.

So what to do? What if she was seeing someone? Or living with someone? His heart sank at the thought.

The fact that she hadn’t contacted him, even professionally, in the last year had come as a surprise. When he’d last talked to her that night at the town house, he’d never meant they’d have nothing to do with each other in the future. In fact, he’d been sincere when he said they’d remain friends. After all, they’d been colleagues and friends before they were partners and lovers, why couldn’t they return to that? It had seemed reasonable to him.

Then there’d been this long, unsettling silence. Jeff realized that for months he’d been looking for an e-mail or text message from her. Maybe, he thought, she’d been doing the same thing.

* * *

Richard Iyers stood concealed in the heavy brush as he watched the runners on the pathway. Jeff had been bunched with three others his first lap, but he pulled away during the second, and when Iyers last saw him, he’d been alone, no one in front of him or behind.

The day he’d made his decision, Iyers considered how to go about this. A mugging on the streets had immediately come to mind. They were common enough in Manhattan but the more he’d considered the risks associated with it, the less appeal it held.

The answer had come to him when he recalled Jeff casually mentioning his run in Central Park on Monday. Iyers recalled that he’d said he was going to run. He’d even mentioned his preference for the Bridle Path because of its forgiving surface.

Iyers had come to the park and scouted the Bridle Path carefully, initially selecting three locations he thought suitable. This was ideal, not far from where it ran beside East Drive. He’d come upon a stout branch, stripped it of its lesser limbs, then secreted it at the location, smiling as he did, recalling how things had gone in Chicago earlier that week.

After that, Iyers had done his best to follow Jeff. He’d waited outside the man’s hotel in the morning, followed him after work in the evening. Iyers was reconsidering his decision not to mug him when he’d seen him emerge from his hotel dressed for a run. Iyers had taken a taxi to the park, then gone to his position.

Watching Jeff approach from the distance, he felt a tingle at the thought of what he was about to do. There’d been no word on the other guy. Every day he’d gone to the Chicago news sites, but so far there was no report of a body found at Waterfall Glen. That had come as no surprise. He’d sunk the body deep and weighted it well.

Iyers moved his gloved hand along the length of the branch he held beside him. He’d considered a gun but just as quickly dismissed the idea. He didn’t own one and getting a gun, legally or illegally, was too risky. It meant witnesses. He’d not used a firearm in Illinois, because he’d not wanted to attract any notice, and it was no different here.

He’d thought about a knife, a big one, but he’d never stabbed anyone before and had no idea how to go about it. Could he do it silently? He didn’t think so. He also knew it would be bloody as well, leaving telltale marks on him. A knife was out of the question.

No, this was best. A victim with a shattered skull in Central Park was not an anomaly. Jaded New Yorkers wouldn’t give it a second thought, and the park police would focus on the vagrants who spent their days in the park.

Iyers finished his cigarette, extinguished it on the ground, then slipped it into his pocket before pulling the ski mask over his face.

* * *

Jeff decided his fourth lap would be his last. He needed to focus on work. If he couldn’t see Stenton the next day, and he wasn’t in on Saturday, he and Frank would wrap up their work over the weekend and finalize their report for Monday. He hoped that was the way it worked out. He really wanted to solve the mystery of the rogue code himself and make it the crowning discovery of their report.

He wondered what the reaction would be. He and Frank had done more than successfully penetrate the trading platform; they’d discovered what was almost certainly an ongoing criminal operation set up to loot money. That conclusion was a bit of a stretch based on the evidence they had today, but Jeff had no doubt that by Monday, he’d have it nailed down. If the stock market fell over a harmless bot, what would the consequence be if what they’d discovered ever got out?

With an open stretch in front of him and recalling how stable the footing was along this part of the path, Jeff accelerated into his final kick. His side began to ache, and his lungs started to burn, reminding him again that he wasn’t running often enough.

Just as he passed a thick cluster of shrubbery his peripheral vision caught sight of a tall figure with a covered face stepping toward him, brandishing something long in his hand. Jeff partially turned, then instinctively veered away and broke into a sprint. There was a sharp brush along his body. He reached East Drive and spotted a police car parked on the other side of the street. Jeff leaped over the low wooden railing to run toward it.

East Drive was closed to traffic most of the time but was open for four hours on weekdays, ending in just a few minutes. The speed limit was twenty-five miles per hour, though speeding cars were not uncommon. The road was clear as Jeff ran in front of a slow-moving vehicle, but he didn’t see the speedster racing up beside it. He felt the impact, dull, vague but powerful. His footing slipped away as he lost control of his physical self; then his vision was a series of still frames flashing one after another as he flew through the air.

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