The mid-October financial turmoil left the U.S. junk-bond market in shambles.
Hordes of short-sellers raked in fortunes, while even more people were wiped out. Whether to offer up a scapegoat for the press or for some other motive, there suddenly seemed no further need to keep Cersei Capital's role under wraps.
Saturday, 21 October.
Out of the blue, New York's Daily News ran a piece headlined "Westeros Arrives, Stock-Disaster Follows".
In a tongue-in-cheek tone the article recalled how Simon's last trip to Melbourne to visit his girlfriend had triggered a plunge in the Japanese market, then pointed out that Simon Westeros and Janette Johnston had happened to spend a week in New York right before the "mini-crash" of 13 October.
Had it ended there, it would have been nothing.
But the Daily News, like the New York Post, a gossip sheet, proceeded to spill Cersei Capital's innermost secrets, even revealing its core net-asset figure, finally claiming the fund had joined hands with Australian consortiums to engineer the collapse of America's junk-bond market and profit hugely on the short side.
Cersei had booked $1.6 billion that week; on the facts, the story was airtight.
Its intent, however, was anything but innocent.
The insinuation that "Cersei Capital and Aussie money destroyed the U.S. junk-bond market" was maliciously crafted to brand Simon a traitor welcoming wolves into the fold. He felt no patriotism toward this country, yet he knew how such a narrative would shatter his image and business empire.
Westeros Company's PR team struck back at once, noting the total short pool exceeded $30 billion, no single player could have steered it. and that the real culprit was over-issuance by the likes of Unite Airlines. Calling the Daily News's blame a smear.
They demanded a full retraction and front-page apology, or Westeros would sue.
As added leverage, Daenerys Entertainment instantly pulled all planned movie ads from the paper.
James Raybould personally phoned Daily News owner Mortimer Zuckerman, warning that, if pushed, Daenerys could persuade at least half of Hollywood's majors to yank their ads, and every other title in Zuckerman's publishing stable would become persona non grata in Hollywood.
With film-marketing budgets ballooning, the majors are any media outlet's key advertisers; Zuckerman couldn't stomach losing them. The next day the Daily News retracted the piece and printed a front-page apology.
The paper's overnight capitulation felt like theatre; Westeros's lightning, dragon-claw strike showed many that a powerful new force had quietly coalesced in the nation.
Parvenus are parvenus precisely because their wealth outruns their clout and pedigree; even tenfold fortunes still invite disdain.
Had Simon Westeros been merely a sudden billionaire, America's "free" press would have laughed off Westeros Company's demands. The retraction proved the upstart had, in three short years, built influence matching his billions.
Though the pressure looked like a guilty man covering tracks, every major outlet, wary of Simon, steered clear of the sensitive topic once the apology appeared.
No flame can spread without fuel.
Papers ignored it, networks stayed silent; the Daily News angle flickered once and vanished beneath the next wave of headlines.
At bottom, it was the power of capital.
Yet while no one dared label Simon a traitor, Cersei Capital's shorting of North America's junk debt was now established fact.
Merely musing over how many more billions Simon had pocketed, or gently probing Cersei's secrets, seemed safe. A few papers tested the waters, saw no retaliation, and others followed.
Cersei's inner workings aren't open books; most outlets recycled the same semi-public leaks the Daily News had used.
But the world never lacks the sharp-eyed.
Cersei Capital's creation of Funds VI through X is no secret to some, yet most insiders missed the deeper question.
Cersei Capital's creation of Funds VI through X is no secret to some, yet most insiders missed the deeper question.
Where, exactly, did the money for Funds VI–X come from?
The net asset value of Cersei Capital's Sub-Funds 1 through 5 had doubled in under a year; some people naturally assumed Simon Westeros could raise another huge fund without the slightest effort and paid little attention to where the money actually came from.
Yet every rule has its exception.
Manhattan.
For reasons everyone knew, Noah Scott, who had helped Simon Westeros trade S&P 500 futures during the '87 crash, was put in charge last year of a Lehman Brothers derivatives arbitrage team focused on overseas markets.
In less than a year the $1.5 billion under their control had grown to $2.6 billion.
A 70% return made Noah Scott the brightest young star inside Lehman Brothers, yet for months he had been haunted by a creeping unease.
Focused on Japan, he had stayed out of Lehman's U.S. junk-bond book. The "mini-crash" of 13 October and the flood of data that followed convinced him his worst hunch was right.
American Express headquarters, Rockefeller Center.
Though it was Sunday, American Express CEO James Robinson and several board heavyweights, including Noah's father Nelson Scott, sat in a conference room to hear Noah's classified briefing.
"I've gone through Cersei Capital's Japanese trades. Our intelligence shows three clear phases. Phase One, roughly December to March, before Simon Westeros collapsed from overwork, was conservative, long-trend investing; that was Simon's style. March to July the fund turned aggressive: ultra-short, high-leverage, high-risk. As a former classmate I can say that was Janette Johnston's handiwork".
Noah paused, then continued: "After July the playbook changed and I can't read it anymore".
James Robinson looked up from the dossier Lehman had compiled at considerable cost and with even less savoury methods and asked, "Noah, what are you driving at?"
Noah collected his thoughts. "Jim, after Westeros visited Melbourne the Japan book changed again. Neither Simon nor Janette's style, just massive long positions on the Nikkei".
Nelson Scott interjected, "Doesn't Cersei have a third partner? Anthony Johnston, the eldest, maybe he took over?"
"Anthony only runs the finance side; he doesn't trade. And with Janette the stronger investor, why would limited partners hand the book to someone inexperienced?"
Another executive asked, "Could Janette have shifted focus to North America?"
"Impossible. Even if she did, she'd keep an eye on Japan; the style wouldn't flip completely. Something happened inside Cersei we haven't detected. It nagged at me, until the junk-bond crack made everything clear."
Every eye in the room fixed on him.
Noah rose, walked to the whiteboard, and began sketching arrows. "Simon visited Melbourne at the end of June; Sub-Funds 6-10 launched in early July; the Japan book's style changed; and now we know Cersei is short at least $3 billion of U.S. high-yield. Three billion doesn't appear overnight, so where did the cash for Sub-Funds 6-10 really come from?"
He didn't wait for guesses; he simply drew arrows from Sub-Funds 1-5 to 6-10.
Veteran executives all, they needed no further hint. A chill shot up James Robinson's spine and he leapt to his feet. "Westeros has already cashed out!"
The Nikkei had just broken 39,000 and was charging toward 40,000.
If Simon had exited in July, three months had passed—and everyone had been played.
Three months on, Lehman's money was still locked in Japan. Who dares say what happens next?!