Step 2: John Lane leveraged the Lane Group's official resources to prompt the SEC (U.S. Securities and Exchange Commission) and the Department of Justice to quickly launch formal investigations into Bates Capital based on the anonymous yet incredibly detailed reports they received.
Account freezes, high-level executive subpoenas, office raids… A series of aggressive actions followed immediately, giving Bates Capital no room to breathe.
Simultaneously, the market reacted instantly: the avalanche of negative news crushed investor confidence. Investors in Bates Capital's hedge funds began frantically withdrawing their money, like sharks scenting blood or a herd of startled deer. The immense redemption pressure instantly drained Bates Capital's liquidity.
At the same time, short-selling pressure against Bates Capital in the futures and options markets suddenly increased severalfold, ruthlessly and precisely targeting its heavily weighted stocks and bonds.
Step 3: Breaching the Bates Capital fortress from within!
Bates Capital was not impenetrable. Under tremendous pressure, and tempted by offers from the Lane family—including immunity, massive cash payouts, and new positions—several key Bates Capital partners finally broke. They not only ceased resistance but defected entirely, secretly submitting even more intimate records of company transactions, regulatory violations, and evidence of executive corruption as a "letter of allegiance."
These fatal internal blows completely shattered Bates Capital's organizational structure and will to fight.
December 23rd, 2007.
At the Bates Capital headquarters in Midtown Manhattan, the trading floor, once brilliantly lit and filled with the swagger of arrogance and the noise of money, was now shrouded in gloom and despair. Blaring red numbers flashed wildly across the screens, representing enormous financial losses every second.
"Bastard! That Lane bastard!" Richard Bates, Chairman and CEO of Bates Capital, violently slammed his fist on the desk. His eyes were red-rimmed and bloodshot, his hair disheveled, and his expensive suit wrinkled. He had long lost his former elite composure.
"Find them! Find out which traitors did this! I'll make them pay!" he roared at his equally frantic subordinates.
"Richard, it's too late..." The Chief Risk Officer's face was ashen, watching the constantly popping up forced liquidation orders and account freeze notices on his screen. "Clients are pulling out frantically. Banks are calling in loans. The stock price… it's fallen below the IPO price. The shorts… God, it's like they knew all our cards in advance!"
"Those reports… that evidence…" another partner stammered. "It's too detailed. It couldn't have happened without an inside job! We've been sold out! Stabbed in the back by our own people!"
Panic spread like a plague. Traders' faces were gray, watching the net worth of the funds they managed plummet, yet they were helpless. Phones rang incessantly, bringing bad news of debt collection calls, queries, and partnership terminations. The air was thick with desperation.
The once-arrogant financial elite now resembled a flock of vultures stripped of their feathers, watching their nest collapse in an inferno.
The final result was that Bates Capital retreated under the Lane Group's onslaught, forced to sell off massive assets. The primary beneficiary of this was Hawk Lane.
For Bates Capital, the short span of twenty days was like an extended, brutal public execution. To handle the run on the funds and the regulatory pressure, Bates Capital was forced to sell its core assets at fire-sale prices—including huge amounts of real estate, private company equity, and even precious art collections.
These high-quality assets were like raw meat tossed into a shark tank, instantly drawing a feeding frenzy from the Wall Street vultures. Among these hungry competitors, the fastest, most brutal, and most generous bidders all led back to a series of extremely secretive offshore funds and shell companies ultimately traceable to the Lane family.
Andy had acted like a masterful hunter: not only did she accurately shoot the prey, but she had also pre-arranged the most efficient teams for carving and transporting the meat. A large volume of high-quality assets, long held and severely undervalued by Bates Capital, quietly flowed into the capital portfolio controlled by Hawk at astonishingly low prices.
This was a carefully planned financial "smash and grab," with results far exceeding expectations. Stripped of core assets and liquidity, and jointly strangled by internal traitors and external regulation, Bates Capital was defunct in all but name. Partners abandoned ship, mass employee layoffs occurred, offices were sealed, and funds were liquidated. The once-untouchable financial leviathan crumbled completely, turning to dust before the tidal wave raised by the Lane family, like a sandcastle on the beach.
The desperate Bates Capital executives reached out to their master, Alexander Pierce…
In a secret, abandoned warehouse with virtually no electronic devices, Richard Bates used a disposable encrypted phone to dial Pierce's number. His fingers trembled violently from fear and rage.
The line connected. A cold, tired voice, carrying undisguised irritation, answered: "Bates? I told you not to contact this number until I returned from Korea!"
"Mr. Alexander! Save us!" Richard's voice was tearful, completely lacking his former poise. "The Lane family! That little devil Hawk Lane! We're finished! He's hounding us like a rabid dog! The SEC, the media, the shorts, internal traitors… We can't hold on! If this continues, we'll all end up in prison! Or worse, we could die mysteriously!"
The other end was silent for a few seconds; only heavy breathing could be heard.
Alexander Pierce was currently embroiled in unprecedented trouble. The Project Witch—a program Hydra had spent massive resources building—had its most important base precisely destroyed by a mysterious force days earlier, resulting in colossal losses. Large quantities of valuable research data and equipment were gone, and several core researchers were either dead or missing.
Nick Fury, like a shark smelling blood, had already sniffed out information that should never have been exposed so quickly. Pierce's entire rhythm had been completely disrupted. Pierce himself was implicated, using every resource available to cover his tracks, divert attention, and placate internal dissent—both within S.H.I.E.L.D. and Hydra.