Glass hired an expensive lawyer, Benjamin Brafman, and agreed to plead guilty and cooperate, too, hoping to reduce his sentence and protect the reputations of his father-in-law at Goldman Sachs, his father at the IRS, and his brother at the hedge fund. Glass, who now has a 3-year-old son, faces a maximum of 25 years in prison and $5.3 million in fines. (Glass declined to be interviewed.)
The FBI had plenty of evidence against Tavdy: Glass had signed up for a monthly service with AOL Instant Messenger that archived every text exchange he made on his computer—meaning there were thousands of pages of conversation between him and Tavdy. What they wanted was evidence against two of Assent’s compliance officers, Sam Childs and Larry McKeever. A year into Glass and Tavdy’s partnership, McKeever, possibly tipped off by a rival trader, figured out that Tavdy was back at Assent, operating under Glass’s umbrella. He and Childs confronted Glass about Tavdy’s account. The government claims the compliance officers demanded money in exchange for their silence: $100,000 for Childs, $50,000 for McKeever. But the FBI needed taped confessions to prove it. Glass’s sentence would hinge on whether he could deliver them.
Making the decision to turn state’s witness is one thing, getting a colleague to incriminate himself in a private conversation is another. Glass was wired for three days in a row. His first attempt to coax Childs into confessing—when Childs expressed disappointment that the payments would have to cease—failed to meet the investigators’ needs. Afterward, Glass is heard calling an FBI agent, who tells Glass he didn’t get the goods. Hearing this, Glass lets out a low moan of agony—the most revealing and emotional sound he makes in the entire recording. “You guys are going to have to be thrilled with that,” he stammers. “It was everything.”
Traders heard whispers of the “UBS guy,” and before long, as many as 30 people were following the illegal stock tips: “This thing’s so deep.”
The next day, Glass returns to the office to speak with Childs again. In this recording, Glass raises the urgency, affecting deep anxiety and paranoia. Repeatedly, he asks Childs if he’s concerned about the SEC’s discovering the payments. Childs dismisses any reason for worry, and he attempts to justify his actions. “[What] the fuck am I going to do?” he says. “The alternative, to me, is blow the whistle on the whole situation … Assent would probably be shut down, day-trading would get a bad name … It’s like, nobody would have gained from doing the right thing. Nobody.” He leaves him with a bit of advice about the SEC’s inquiry: “Don’t let it be all-consuming. Don’t go hiding all your money. Yet.”
On day three, Glass is back to talk to the other Assent officer, Larry McKeever. A 46-year-old father of two, McKeever has heard about the rising paranoia over an SEC inquiry. He has studiously avoided talking on the telephone, according to Childs, concerned that his lines are tapped. But with Glass, he is not so careful. McKeever anxiously suggests they tell the Feds the payments are merely a consulting fee for his bringing Jasper Capital a “big fish”—trader talk for a large investor.
McKeever: Can you think of any other thing why you gave me X amount of dollars? A big fish? A couple of big fishes?
Glass: Yeah, I can make up stories, but, I mean, Tavdy—Tavdy knows the name Sam Childs and I think he probably knows the name Larry McKeever.
McKeever: Listen, Glass, I kid you not—he’s a fucking dead man. I don’t give a fuck if he’s tied into the Russian mob or whatever. I’ll find that cocksucker, mark my words. My lips to your ears. He don’t know my name. How does he know my name?
Finally, McKeever suggests that they pass off the payments as an investment in a fake business venture called “Glass-Mack.”
McKeever: How’s that? I’m working on the strategies and you’re the financial backer, 60-40. All right, can you do that?
Glass: To cover up the payments, we should enter into some kind of partnership?
That was just what Glass—and the investigators—wanted to hear.