Nick Verbitsky
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Shaunagh talks to Nick Verbitsky
This episode features Oscar nominated and Emmy winning producer, Nick Verbitsky. Nick has been producing for FRONTLINE PBS since 2013, when he directed To Catch a Trader, an investigative look at Wall Street insider trading. Nick also produced Abacus: Small Enough to Jail (2017), which received an Oscar nomination for Best Documentary Feature, and has produced/co-produced films like Weinstein and Documenting Hate, as well as Opioids, Inc with the FT.
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Credits
Hosted and produced by Shaunagh Connaire and edited by Ryan Ferguson.
Episode transcript
Shaunagh Connaire
Welcome to Media Tribe, the podcast that's on a mission to restore faith in journalism. I'm Shaunagh Connaire, an award-winning journalist with over 10 years of experience working for some of the biggest news outlets in the industry. Every week, I'm going to introduce you to some of the world's most respected journalists, filmmakers and media executives and you're going to hear the story behind the storyteller. You'll get a sense of the integrity and hard graft that's involved in journalism and hopefully you'll go away feeling that this craft is worth valuing.
Nick Verbitsky
I was reading a deposition that was given by Steve Cohen in a civil lawsuit. There's a segment where the lawyer asks Cohen if he knows what the insider trader laws are. And he says, "No, I don't." How is it possible that a man who's worth $10 billion and trades thousands of stocks a month can say under oath that he doesn't understand or know what the insider trading rules are? And at that moment, I said, "I got to get a hold of this video."
Shaunagh Connaire
My guest today is Nick Verbitsky, Oscar-nominated an Emmy award-winning producer at PBS Frontline.
Shaunagh Connaire
Nick Verbitsky, welcome to the Media Tribe.
Nick Verbitsky
Thanks for having me, Shaunagh.
Shaunagh Connaire
Well, you're most welcome, Nick. It's lovely to chat to you. It's been a couple of months, I reckon, since we crossed paths and were lucky enough to be working together.
Nick Verbitsky
That's right. That journey took us from the back of a New York City taxi cab to two years later, having a film premiere this past June, which was, I felt like I had a baby in June when that film finally premiered.
Shaunagh Connaire
Well, I feel like it was both of our babies at the end of that two year stint trying to get that partnership and brilliant film Opioid Inc. off the ground. But before we kind of delve into all of that, Nick, and how extraordinary you are at getting access and making people commission pieces, as I sampled in the back of that New York taxi, do you want to tell our audience how you broke into journalism and filmmaking?
Nick Verbitsky
Yeah, sure. In the late nineties I had finished my MBA at New York University. I had a Master's in finance and another in marketing and the only thing I was sure of was that I didn't want to go to Wall Street. Getting a Master's in finance, I was selling radio time at radio stations in New York back then and all of my classmates worked at banks and were on Wall Street and they were all just miserable. I knew that wasn't for me. And I just had my first child and I thought, I had always been a documentary freak. The Learning Channel and the History Channel when they launched, I watched it all the time and jumped off and started a production company back in 1998 and had a pretty good business going until about 2008, things were going pretty well.
Nick Verbitsky
And then the great financial crisis just destroyed us. We went from over a million dollars in billings to almost nothing in the space of a few months. At that point, sort of really thinking about what I wanted to do. And I had always wanted to work for Frontline. Frontline was always, it was something I grew up watching and then I saw Money, Power, Wall Street, Frontline series on the great financial crisis. That's when I said, "That's what I want to do. That's it. That's for me." And so I went out and I started researching and producing my own documentary film about the collapse of Bear Stearns, which was kind of the canary in the coal mine for the great financial crisis. It was the first domino to fall.
Nick Verbitsky
And I had never been in journalism before that. I'm a critical thinker though and so that certainly helped a lot. But producing my own film and bringing it to fruition, it never did get aired any way or anything, but it taught me a lot and it confirmed for me that kind of muddling along and doing corporate film work and that sort of thing, that just, that wasn't something that I want to talk to my grandkids about. I wanted to do films. I wanted to make films. I wanted to do what Martin Smith did with Money, Power, Wall Street.
Shaunagh Connaire
Well that's fantastic. And for anybody listening in who isn't familiar with PBS Frontline, it's the equivalent of BBC Panorama in the UK. PBS is the public broadcaster here in the US. We also did an interview with the executive producer from Frontline so you guys should listen into that as well. But that's extraordinary, Nick, that you really, when you say you didn't want to go into Wall Street and make the megabucks there and you've chosen a solitary path of documentary making, which we both know doesn't make you tons of money, especially when it's investigative journalism. That was huge, but you do bring this extraordinary financial mind to journalism. I have seen that firsthand. And how did you take that to Frontline? How did you convince them to kind of give an ingenue in documentary making your first credit as a director in 2013?
Nick Verbitsky
Yeah, the story of getting into Frontline was really serendipitous. As I mentioned, I'd produced my own film, Confidence Game about the collapse of Bear Stearns. And I was feeling frisky one day and I thought, I'm going to send an email to the executive producer of Frontline and introduce myself to her. I wrote an email, it was actually a LinkedIn message. And I said, "Look, I know you get probably a 1,000 of these a week, but I'm telling you right now, I'm going to produce for you one day and I just wanted to say hello and introduce myself." And of course, I didn't hear anything back and a couple of months went by. And the next thing I know, I got a phone call from a guy named Dan Sugarman, who was the reporter for Martin Smith at Frontline.
Nick Verbitsky
And he calls me and he says, "We heard that you produced this film called Confidence Game, could you send us a copy?" And I'm like, "Yeah, I can do that." Sent them a copy. The next thing I know, I'm sitting in Martin Smith's office talking about my film and the fact that he wants to interview me for a film that he produced called, The Untouchables, a film that I was happy to be on camera in and actually used segments of my Bear Stearns film in, but it was also a masterclass in interviewing by Martin Smith. His interview of Lanny Breuer in that film was incredible. And it was just covering the fact that no bankers had been prosecuted for the financial crisis. And then Martin literally walked me in the front door of Frontline.
Shaunagh Connaire
Wow. Martin Smith is a veteran correspondent on PBS Frontline. Again, just in case any of our audience isn't familiar with the big name that is Martin Smith. That's serendipitous, but it also kind of shows your tenacity and also the perseverance that was involved and as you said, the kind of tongue in cheek LinkedIn message, which we've all done.
Nick Verbitsky
It's like one of those things, that adage, luck happens when opportunity meets preparation. That was a perfect example of that. Where I'd been working on something and the timing just hit and somebody heard about it from a lawyer on Sixth Avenue or something and then they called me. It's really, I still, I think about that all the time. It's an incredible thing. And I think for all of us in this business, we all get confronted with stories that, should we drop this? Should I keep going? That sort of thing. And I'll always remember that time warmly, because I had no distributor, I had nothing to do with this film, but yet it turned into a great investment.
Shaunagh Connaire
Extraordinary. And just out of curiosity, what do your colleagues or Frontline now say to you? You're the cowboy who emailed him saying, "Just by the way, I'm going to be working for you in a few years." What do they say to that now?
Nick Verbitsky
Well I think it's in fact, Raney Aronson never even saw the message. The phone call I got from Dan Sugarman had nothing to do with my email. That's what makes it even crazier. But Raney always mentions that she remembers that that message actually came in later and they saw it. But I think Frontline is just a place where if you're smart and hardworking and you have the goods and a good story, you're in business. That's what I really respect about Raney and her right hand there, Andrew Metz. When you go to them, it's always a thoughtful conversation whether you get what you want or not. I don't think maybe people see me as a cowboy, but it's definitely, I'm not along the same lines as most of the people who have come through there, just because they're great journalists and had been before they came to Frontline.
Shaunagh Connaire
Now, when researching this episode, I wanted to be sure I was fully up to speed with everything that was going on on Wall Street. This meant coming to terms with an emerging buzzword, SPACs or special purpose acquisition vehicles. In a nutshell, SPACs are a way for companies to list on a stock exchange. They've been around for decades, but their usage has massively grown recently. While I knew a little bit about SPACs, I didn't quite understand how they worked or what their major pitfalls were, nor did I have a whole lot of time to do a deep dive pike. Thankfully, the sponsor of today's episode, which is an audio journalism app called Noa, came in really, really handy by helping me know more about SPACs in a very short space of time.
Shaunagh Connaire
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Shaunagh Connaire
My next question, Nick, and it's the big, big question in the interview and I'm hoping you will tell us about your extraordinary film, which was back in 2014, to Catch a Trader. I'm egging you along, of course, but can you tell us about a very proud moment in your career, Nick?
Nick Verbitsky
Again, it's really tied to Martin Smith. After he had brought me in the door there, we were talking about a collaboration, a project to work on together. And at that time, the story of Steve Cohen, the billionaire hedge fund manager, was just kind of jumping the rail into the mainstream media from the Wall Street journal. There was a big, I remember at that time, there was a big Vanity Fair piece on Steve Cohen that he was kind of like this white whale that the government was trying to get for insider trading at that time. The hedge fund managers were being convicted of insider trading and there was this big crackdown going on. And Frontline loved the idea. And all of a sudden now I'm working with Martin Smith on a film and I'm directing it.
Nick Verbitsky
I just honestly, there were times when I worked on that film that I looked out the window and I just couldn't believe what was happening. But I remember the day that I got the call that we were getting a green light on the film. I was reading a deposition that was given by Steve Cohen in a civil lawsuit. And as I'm reading through it, there's a segment where the lawyer asks Cohen if he knows what the insider trader laws are. And he says, "No, I don't." And I remember exactly where I was. I was at Colgate University outside the Colgate and drinking a beer and reading this transcript and saying to myself, "How is it possible that a man who's worth $10 billion and trades thousands of stocks a month can say under oath that he doesn't understand or know what the insider trading rules are? And at that moment I said, "I got to get a hold of this video."
Nick Verbitsky
We were lucky enough to get a lot of cooperation from the FBI. A lot of the agents that had worked on a lot of the cases there, which was super helpful. I wish we could have gotten some of the SEC people because they really deserved a lot of credit as well. But so, during the course of the film, deposition video was under a court seal. And then out of the blue, I would say three months into production, I got a text message in the morning that said, "I understand you're looking for the video of Steve Cohen's deposition." And I said, "Yes. Yes, I am." And this person said, "Well, send me what you want. I have it and I'll send it to you." A couple of weeks went by and I thought, oh, I don't know if this person's going to come across with the goods.
Nick Verbitsky
And then one morning I got a text saying that the video was outside of our offices in Manhattan, across the street in an envelope wedged into the scaffolding on the building across the street from us. I'll never forget this. I literally dropped my phone five times running down the hall to get to the elevator, to go downstairs. I finally made it to the street. I go across and there's this little white envelope wedged into the crossbars there on the scaffolding and it's got my name on it. Of course my name was misspelled. It kind of looked like the Unabomber had written it. It was a little scary. I was looking around the street, I had no idea what was going to happen. And then I opened the envelope and there was a little USB drive, a thumb drive with a Bugs Bunny head on top of it. And I thought to myself, this is some sort of gag. This can't be real. And I went upstairs and we're all kind of huddling around the computer and then I don't remember who said it, but somebody was like, "Well, what if it's a virus?"
Shaunagh Connaire
I was just about to say, it sounds like if you've just brought anthrax into the building.
Nick Verbitsky
Yeah, it was crazy. And I thought for a minute, I was like, "Yeah, that's a good question." Then everybody was kind of like, "No, we got to see what's on this." And we plugged the video in and there was Steve Cohen's head on the screen. I could not believe what I was looking at. I was stunned. I really was. And although that first iteration didn't have everything I wanted, this person followed up again and had a courier drop something off at our doorstep with the rest of what I wanted and that made it into the film. The film would have been a good film, I think without it, but that for me, that really made the film. To be able to hear Steve Cohen's voice. He buys all of the video and photo rights to his image whenever he can. To hear him actually speak is a real coup, much less seeing him talk on video. That really caused a stir. And I think everybody at Frontline was excited about it. They actually posted some of the video online way before the film even premiered.
Shaunagh Connaire
Nick let's just backtrack slightly. The story of Steve Cohen and S.A.C. Capital, it's all about insider trading, which is highly illegal. And as you said, Cohen himself was worth billions back in 2008, I think it was eight billion back in 2008. And he was aware that this trading was taking place. Can you tell us just a little bit more about the kind of deals that were happening and trades that were taking place?
Nick Verbitsky
Sure. In terms of what was happening at that time, the FBI was using a new technique on Wall Street. They were actually getting phone taps on hedge fund managers' phones. For years, insider trading, there was a very notable crackdown here in the United States back in the late eighties, which was the inspiration for the movie Wall Street, starring Michael Douglas, a guy named Ivan Boesky was involved with a guy named Michael Milken, who was also convicted later on of other offenses, but Ivan Boesky had been getting insider information and profiting hugely off of it. And the government cracked down on it. He went to jail, but that was it. That was 1987, 88. And since that time, there really weren't many notable crackdowns on insider trading. Yes, there would be once in a while, some small time trader might get busted, but it wasn't anything material.
Nick Verbitsky
What really took shape on Wall Street was this idea that you weren't going to get caught and even if you did get caught, a lot of traders would use these kinds of excuses like "Oh, well, the information I got from so-and-so was just part of a mosaic of other information. I have plenty of other information that confirmed for me why I should have traded in this stock." They would continuously get off. And people I think in law enforcement were really tired of it and were able to kind of approach this as an organized crime type of thing. We hear all the time about how the mafia is talking on a wiretap. That started to become a big tool that the FBI was using here.
Nick Verbitsky
In one part of the film, talk about a guy named Raj Rajaratnam, who's of Sri Lankan extraction and was a very successful hedge fund manager at a place called the Galleon Group. And there's one instance in the film where he literally gets call from a director at Goldman Sachs, who gives him insider information about Goldman and then he immediately trades on it and profits hugely and then brags about it on the phone.
Shaunagh Connaire
Unbelievable. When you say profit hugely, you're talking about millions of dollars. This is significant, significant money. And insider trading, as we said, is illegal. Just in case people are not familiar as to what that is, it's gaining information when you shouldn't have had that information before something major happens in a company like Amazon. You decide to buy or sell stocks and you profit significantly off the back of that decision having had that information illegally.
Nick Verbitsky
It's called material non-public information. In one part of the film we're talking about Steve Cohen, one of his traders was able to get inside information about a drug trial for an Alzheimer's drug. And this guy named Matt Martoma had befriended one of the doctors who was involved in the trial and he found out that this drug was going to be a bust. And S.A.C. Capital had, it was a huge trade. We're talking hundreds of millions of dollars here. And as soon as Cohen found out about it, all of a sudden they dumped out of it a day before, might not have been a day, it might've been even closer to that, closer to the actual announcement that the drug was not going to work.
A lot of people even here in the States, a lot of people believe that insider trading is a victimless crime. That somebody said they were open to buying your shares at a certain price and you agreed to sell them your shares at that price. But really that's just a bankrupt argument. That is not true. If somebody sold you, there's a thing here in the States called the lemon law. If somebody sells you a used car and they know that the radiator is broken and you take it off the lot, you get to bring that car back.
Shaunagh Connaire
It's fraudulent.
Nick Verbitsky
Right, exactly. And that this is the same kind of thing, but it still is an ongoing debate even till this day, which is really bizarre to me, but people still portray it that way.
Shaunagh Connaire
Well, I think is really, really important to note then is that S.A.C. Capital, they pled guilty to insider a trading in 2013 and they had to pay the DOJ 1.8 billion in fines. And I just wondered, Nick, do you think having this extensive knowledge of finance and Wall Street at large, do traders and big companies and hedge funds like that, just see this fines as a cost of doing business?
Nick Verbitsky
Oh, absolutely. And that's the big complaint is that somehow the government has convinced people that these crimes are too complicated and a jury cannot fully understand them. And there was actually one case that they point to and it happened in the case of Bear Stearns, a couple of hedge fund managers were prosecuted and they had emails, all sorts of evidence against them and they got off. And so the prosecutorial community kind of says, "Well, that sent a chill through their community to go after these crimes because they can't prove them in court." Yes, Wall Street and certainly other bit we know from our Opioids film, it's not just Wall Street, but a lot of big business in America sees crime as a cost of doing business. And it really only amounts to a fine and everybody goes on their merry way, which is frustrating for a lot of people here.
Shaunagh Connaire
Extraordinary. And so Steve Cohen himself, he was never a charged. He recently bought the Mets baseball team, isn't that right, Nick?
Nick Verbitsky
That's a great irony because I'm a huge New York Mets fan and now he owns my baseball team. I'm not sure how I feel about that at this point. It's difficult because, when you see a guy like Cohen, I sat in the conference room of a US Senator and I looked through 70 what they call suspicious activity reports that gets submitted to the Securities and Exchange Commission here in the United States. And every one of them was a winner for Steve Cohen. Buying stocks for the longterm, shorting stocks, betting that the price will go down, in front of earnings announcements, drug trial announcements, 70 and 0. Nobody's that good.
Nick Verbitsky
A lot of people don't don't point this out, but Steve Cohen was legendary on Wall Street because when he started in the mid mid to late nineties, he was achieving these incredible returns for investors. 50% a year, 30% a year. And that was after the huge fees he was taking. But after this crackdown on Wall Street and insider trading, he hasn't even come close to those returns and nobody points that out these days. Everybody seems to forget. It's more than a little curious that those incredible returns stopped right after the DOJ cracked down on all this.
Shaunagh Connaire
And so that's obviously was nominated for an Emmy. And I think that's actually how we struck up our friendship, Nick. I was in New York in 2014, living in a wee studio in Bushwick in Brooklyn and I remember you got in touch on Twitter and we decided we'd go for a coffee and we realized we had this kind of mutual love for finance and a kind of a nerdiness that we love Wall Street and we love all the kind of intricate craziness that happens in the background. And we vowed then that we would work together. And of course we were very lucky to have that opportunity this year.
Nick Verbitsky
I remember the night of the Emmys that I specifically went up to you and introduced myself at the Empire Hotel at the after party, because I wanted to meet the woman who was in Africa in a moon suit, producing a film about Ebola. That is just something that is so out of my league it's not even funny. That's how our friendship began and I remember it very well.
Shaunagh Connaire
That's brilliant. Well, that was a good night, a long night. But anyway, we went on to make a great film with Frontline and the Financial Times with our colleagues, Tom Jennings and Hannah Kuchler which it was wonderful to see you in action. And I mean this in the most sincere and polite way, but you getting access, Nick Verbitsky, is like a dog with a bone basically. I thought I was good until I met you. And you do not stop until you get the access that we need to make great films so fair play to you.
Nick Verbitsky
Well, thank you. I credit a lot of that to my years in New York City selling radio time, to be honest with you. Sales, a sales job is a great training ground for producers of documentary films. I really believe that. It taught me how to speak to people. It taught me empathy. It taught me how to read a room and I certainly still draw upon those lessons today. And I really think it has a lot to do with, when I was selling radio, I was dealing with people who bought a $100 million worth of radio a year and then I was getting, I will never forget this. I collected $1,500 in cash from a club owner who had a gun on the table when he was counting it out to me.
Shaunagh Connaire
From your brilliant film in 2014, Frontline saw that you were a talent and that you were worth keeping on the books essentially. And you've gone on to produce many, many films for them. One, which was Oscar nominated, Abacus, which is an extraordinary film in 2017, I think, and Policing the Police, documenting, hey, you've done it all for Frontline. I'm curious, Nick, if there is a moment which I know there is, in your career, that's rather bonkers and crazy that we don't know about, I certainly don't know about, but maybe you'd like to delve into and give us some juicy details.
Nick Verbitsky
Yeah, I'm trying to think. In Frontline, that story with the thumb drive is probably the craziest thing that happened to me. To be honest with you, before I started with Frontline, I actually did, I did produce some TV documentary work and one film I was doing about polygamy. I was in the desert in Southern Arizona and we were being followed around by the local militia who was trying to intimidate us. And at one point, we talked to a state Senator who in that same community was blocked in by the residents who wouldn't let him leave. We actually had to hire some security to be with us. We were a little afraid of there's plenty of places to get rid of people in the desert. We definitely didn't want to cheap out and not protect ourselves. Some of it was a little bit hairy.
Nick Verbitsky
The people that we were dealing with, they would let their wives drive cars, but they wouldn't have license plates on them because if they ran, police would pull them over because they had no license plates and then they would just return them to the community. It was kind of a cult situation there. Those kinds of things. That was what really, to see what happened to the women in that community. I couldn't go as far as I wanted to from an investigative standpoint. And that was another thing that really drove me more to Frontline and wanting to do the things that I'm doing now is, Watching these men just subjugate women the way that they were and treating them like cattle, that really made me angry.
Nick Verbitsky
I look back on that a lot in terms of my formative years of trying to figure out what I was going to do with my career. And I remember one time watching one of these guys walk up on the steps of a courtroom and I asked him a question and he said something very dismissive to me. And at that moment, the rage in me was, I was really upset. And that that's part of the time where I said to myself, "I want to do something that really makes a difference, that really goes after people."
Shaunagh Connaire
Well, that's brilliant, Nick, and a great note to end, I think. Thank you so much for your insights. It's brilliant to hear about your career trajectory and our audience are going to love that. Thanks a million for coming on the podcast.
Nick Verbitsky
Always good to talk to you, Shaunagh, thank you.
Shaunagh Connaire
If you like what you heard on this episode of Media Tribe, that's very good news because I'm going to be dropping new shows every week and every month on my New Media Tribe spotlight series. Also, if you haven't already, make sure to take a listen to previous shows with some legendary folk in the industry. And as ever, please, please, please do leave me a rating and review as it really does help other people find this podcast. Finally, if you do have any guest suggestions, drop me a note on Twitter, I'm @shaunagh with a G-H or @shaunaghconnaire on Instagram and again, that's with a G-H. Right, that's it. See you soon.
Shaunagh Connaire
This episode was edited by Ryan Ferguson.
