Chapter 6, Part 1: Playing chess with “J.P. Morgan”
This is Chapter 6, Part 1 of SMIRK, a serialized memoir of my relationship with “Pharma Bro” Martin Shkreli.
One of the first people I spoke to when I began working on a book about Martin Shkreli, to try to get a sense of how his meteoric trajectory had started, was a silver-haired stock broker named “Roger,” who worked for a well-known investment bank.
Ok, to be clear, “Roger” is definitely not his real name. Like many “respectable” people in Martin’s circle, he was fearful of possible blowback resulting from clients or his employer knowing about his connection to the infamous drug company founder. “I can’t be associated with the Martins of the world,” he told me right off the bat.
This was a constant problem I faced when trying to gather an accurate portrait of Martin: The only people who seemed eager to go on record about him had axes to grind. Everyone else took a lot of cajoling. Anyway, that’s why I agreed to use a pseudonym for Roger.
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Martin introduced me to Roger in May 2017, a pleasant and lightly-paunchy middle-aged white man, during a small happy hour gathering at the former Gansevoort Hotel, on Park Avenue. Martin had sort of randomly invited me there in order for me to get acquainted with some of his professional associates (or to show off the fact that there was a journalist now following him around, working on a book about him, maybe). He told me very little about Roger, only that he had served as his broker years ago and was an old friend.
I took Roger’s card, and followed up several weeks later, scheduling a time to interview him alone without Martin present. We met at his office in Midtown, and I recorded the conversation. Curiously, Roger’s impressions of Martin were hardly all glowing — he later told the sentencing judge in Martin’s case that the young businessman was “equal parts brilliant and impossible” — but he clearly didn’t fear any wrath from the “Pharma Bro” for offering his insights.
“Martin is like Bobby Fischer,” Roger began, and proceeded to describe how the chess prodigy, who rose to fame in the 1960s and 1970s, won a fabled victory against a champion from the Soviet Union but then “flared out” and disappeared from public life. “He was a kid with no resources,” Roger continued, referencing Fischer while likening him to Martin. “The Soviets dominated chess at the time. Fischer killed them. He took on the Soviet Empire and crushed that.”
“People like that tend to flare out very young,” Roger added. “I suspect Martin will flare out, too.”
Martin was “literally a baby” when Roger met him, or actually in his very early 20s, having just left his first Wall Street job as an intern for Cramer, Berkowitz & Co, the hedge fund founded by CNBC “Mad Money” host Jim Cramer. He was working as an assistant for one of Roger’s colleagues. Perhaps sensing there were interesting people Roger could introduce him to, young Martin started chatting with Roger frequently and asking for advice.
Roger told me he was mystified at first to find that the hustling youngster appeared to be especially drawn to the pharmaceutical industry, and researching pharmaceutical stocks. “Why would you pick that industry? I have no idea,” Roger said matter-of-factly. “It wasn’t necessarily exciting. It doesn’t capture hearts and minds like the internet companies do. The best beat” for stock analysts “is the internet beat. You want to be on TV.”
Paradoxically, Roger recalled that Martin was “very social” but at the same time “didn’t have great social skills.”
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Martin’s hopes that Roger would be able to open doors for him worked out; the senior investment advisor got wind of a cocktail party being hosted by a pharmaceutical analyst, and he called Martin to invite him along. Martin was thrilled. “It was like a little kid going to Disneyland,” Roger recalled. “Martin knew of everybody there. He would hold his own in these conversations” and talk about scientific reports as cogently as anyone else. “Analysts were like ‘who are you? You’re too young to know any of this,’” Roger told me.
Eventually, Martin got what appeared to be his break: A plum job as an analyst at hedge fund Intrepid Capital Management. It was a “great opportunity,” said Roger. Staying with the firm and advancing through the ranks, a bright and eager young financial analyst could easily become a portfolio manager, making $10 million or more, in no time at all.
“Make that offer to any American, and who would say ‘no?’” Roger said. “It wasn’t like he was going to be outsmarted or outworked, or couldn’t handle the job. He could do the job.”
But…just like with about everything else in Martin’s life, it didn’t end up going that smoothly.
“First day on the job, he calls me up: ‘I have a little problem,’” Roger told me. “He got into a massive shouting match with the lady in the office outside his cubicle. I was speechless. She had her door open and she was super loud. He went over and told her her loudness was affecting his work. Day 1.”
Somehow Martin survived that first day, despite the scuffle with the woman who was a much more senior employee at Intrepid. But he was restless and apparently wanted to strike out on his own, launching a hedge fund in 2007 called Elea Capital with a scant amount of funds he could scrape together. The venture didn’t go well. “He blew up Elea,” Roger said. Living with family members, and kicked out of the “hedge fund hotel,” or shared space where he had been working, Martin also lacked an office where he could start fresh.
Roger generously provided a solution: At the time, he was running a small hedge fund in an office in downtown Manhattan that had extra space. He agreed to let Martin and his business partner, Marek, come and use some of the space for free. Roger said he gave them “a couple of seats” at the long desk they all shared.
When the young men first arrived at the office, Roger fretted a bit about who would sit where — he preferred Martin that would sit as far away from him as possible so “I don’t have to deal with the immediacy of the insanity.” But apparently, he needn’t have worried. As soon as the two walked in, before Roger could barely finish uttering a greeting, Martin asked him, point blank, where the Bloomberg terminal was. “He sat down and didn’t leave until 3 a.m.,” Roger recalled. (Roger left earlier than that but was told that information by a security guard the next day.)
That was not Martin’s only late night at his new, borrowed office. Roger started noticing the young hedge fund manager was often wearing the same clothes multiple days in a row. He learned that Martin had been researching all night, and took breaks to sleep in the server room. It was summer, and the air conditioning was turned off in the building at night — except in the server room, to keep the computer processing units cool. This happened enough times that Roger eventually bought him a sleeping bag, and Marek bought him a foam topper to make the floor more comfortable.
When Martin wasn’t madly pouring over stock information on the Bloomberg terminal, he would sometimes wander around to all the desks in the office, chatting with people, and causing “mayhem,” Roger said. On one occasion, “he walked around the entire hedge fund desk and said he was going to take over the lease and he was going to be the new big boss of my hedge fund,” Roger told me. “He probably wasn’t properly medicated that day.”
In the afternoons, sometimes Roger, Martin and Marek took a break from work and wandered to nearby Zuccotti Park. The little patch of green space in the Financial District would later become, in 2011, a main protest camp for the Occupy Wall Street movement.
But in 2009, it was mainly just a place to get a breath of fresh air, maybe eat a bite of lunch, and in Martin’s case, play chess. For about $5, you could play a game against one of the homeless men in the park, and Martin always played and usually won, Roger told me. There was one chess hustler who consistently beat Martin, though. He went by the nickname “J.P. Morgan.”
“Martin just couldn’t get over the fact that he was being beaten by a street hustler,” Roger said.
Days later, back in his office, Roger got a call from a receptionist telling him that “J.P. Morgan” was “here.” Confused but thinking it must somehow be something important, Roger went to the reception area — and he discovered a tall Black man, in a well-worn T-shirt and sweatpants, was patiently waiting. It was the Zuccotti Park chess player. “Martin invited him up for an interview,” Roger told me.
I don’t know if J.P. Morgan got the job, but it was intriguing to me that Martin had at least given him a chance. Roger was apparently impressed (if a bit dumbfounded), too. For all of the frustrations of dealing with Martin, he had never seen anyone else working in finance give a job interview to a homeless man.
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