WSL111708
11/14/08
12:14 PM
Page 1
NOVEMBER 17, 2008
VOL. XL, NO. 46
BOfA ANALYSTS FACE LAYOFFS
FIA Futures & Options Expo
See coverage, p. 8-9
At Press Time
Goldman Lays Off Analysts
Bloomberg Targets Taiwan
2
2
Trading
NYSE Readies Alternext
Exchange Performance Lags
Nasdaq OMX BX Set To Launch
BNY Targets European Routing
NYSE Straddles Odd Lots
IT Budgets Get Tighter
Traders Tapped To Recruit
ISE To Assign FX Permanently
ICAP Urges More Transparency
Tethys Adds FX Capabilities
3
3
3
4
4
4
5
5
5
6
Banc of America analysts expect layoffs before the end of the
year as the bank starts its integration with Merrill Lynch over
the next few weeks, according to several analysts and recruiters
that have spoken with analysts there. Up to one third of the
50 BofA equity analysts could be cut. Merrill Lynch analysts
are being retained because the department as a whole is more
experienced and is ranked higher, one recruiter said. Merrill
Lynch was ranked fifth in Institutional Investor’s recent “All-America Research Team” survey
(continued on page 11)
Ups Payout
UBS TO LET BROKERS BECOME
MANAGING DIRECTORS
UBS has made financial advisors eligible for the managing director title, becoming just the
second firm on the Street to do so. In order for an advisor to be eligible, he or she must
produce $2.5 million for two consecutive years and meet other criteria such as length
of service.
One UBS employee said the new title is a direct result of many high-end Lehman
Research
(continued on page 12)
FundQuest Boosts Team
Pulse Boosts Indie Research
FINRA Gets Tougher On Barriers
QSG Launches Ratings
6
6
6
7
FINRA INSTITUTES ORDER PROTECTION
FOR OTC STOCKS
7
7
The Financial Industry Regulatory Authority has adopted limit order protection for pink
sheet and bulletin board stocks, requiring brokerages to deliver the best available price to
customers. Previously, only exchange-listed securities had that protection. The rule intends to
curb trade throughs intentionally made by market makers who could make more money
trading with each other, explained Frank Grampone, managing director of operations and
client services at Knight Capital Group. This protection is expected to attract more
Retail Brokerage
Indies, RIAs Woo Brokers
Alts Lure Mass Affluent
Departments
People & Firms
10
COPYRIGHT NOTICE: No part of this publication may
be copied, photocopied or duplicated in any form or by
any means without Institutional Investor’s prior written
consent. Copying of this publication is in violation of the
Federal Copyright Law (17 USC 101 et seq.). Violators
may be subject to criminal penalties as well as liability
for substantial monetary damages, including statutory
damages up to $100,000 per infringement, costs and
attorney’s fees. Copyright 2008 Institutional Investor,
Inc. All rights reserved. ISSN# 704-20040
For information regarding subscription rates
and electronic licenses, please contact Dan Lalor at
(212) 224-3045.
(continued on page 12)
Impasse Averted
BOfA TO JOIN BROKER PROTOCOL
A potentially major snag in Bank of America’s acquisition of Merrill Lynch has been averted
as BofA decided become part of an inter-brokerage pact on brokers moving firms, according
to WSL sister publication Private Asset Management. Restrictive wording regarding taking
accounts and client information when moving, which is in the BofA retention offer to
Merrill advisors, had many brokers reluctant to sign by the Nov. 14 deadline
(continued on page 11)
(wallstreetletter.com, 11/7).
For breaking news and updates during the week, check www.wallstreetletter.com
WSL111708
11/14/08
12:14 PM
Page 2
Wall Street Letter
www.wallstreetletter.com
November 17, 2008
At Press Time
Goldman Eliminates 13
Research Positions
Goldman Sachs eliminated 13 equity research positions
in the last two weeks. The analysts that left the firm
Friday, Nov. 7, include Sasa Zorovic, who covered software;
Peter Appert, publishing; Oscar Cabrera, consumer services; Simeon Gutman,
food and staples retailing; Albert Kabili, consumer services; Michael Molnar,
alternative energy and coal; and Peter Salkowski, printing, publishing and
newspapers. Later departures include William Tanona, financial services; Deanne
Dray, machinery; Charles Chon and Lawrence Keusch, healthcare equipment;
Ajay Kejriwal, industrial materials and Peter Wahlstrom, shipping.
According to memos, the firm has dropped coverage of 51 companies,
including A.H. Belo Corp, Coinstar and First Solar. It has suspended coverage of
fifteen companies, including ALCOA and Alpha Natural Resources. Coverage of
Adobe Systems and Salesforce.com has been transferred to Sarah Friar from
Zorovic The Hain Celestial Group, United Natural Foods and Whole Foods
Market coverage have been transferred to John Heinbockel from Gutman.
Goldman is in the middle of firm-wide job cuts.
Coverage of General Electric and Tyco, formerly covered by Dray and
Kejriwal, was transferred to Terry Darling. Darling has taken on 13 other
companies that were previously assigned to his former colleagues, bringing his
total to 30. Christopher Agnew has taken over Wahlstrom’s companies, which
include Hertz Global Holdings and Avis. Many of Tanona’s companies were
dropped, such as Merrill Lynch and TD Ameritrade Holdings as were Johnson
& Johnson and Alcon Inc., which Keusch and Chon covered.
Bloomberg Tradebook Targets
Services in Taiwan
Bloomberg Tradebook has begun offering connectivity to Taiwan equity markets
this week. Users will have direct market access as well as advanced iceberg orders
and target orders. The firm is also testing algorithms, including VWAP, TWAP,
arrival price and go-along, which will be live next month. Taiwan’s markets, the
Taiwan Stock Exchange and an over-the-counter market called GreTai Securities
Market, have grown at a rate of 13 percent in recent years, trading US$700
billion to US$1.1 trillion annually.
The Taiwan market is acutely sensitive to short selling. All buy orders have to
be electronically checked on the clearing corporation to see if there is a contra. If
there is none, the order is cancelled; if there is a contra, the shares are locked
down to assure the same shares are not being used for multiple trades.
The market is an I.D. market that requires traders’ funds to be registered
locally, which can sometimes delay connectivity up to a few weeks. For firms who
do voice trading in Taiwan, the wait is much shorter.
Tradebook also connects to equities markets in Australia, Hong Kong, Japan,
Malaysia, New Zealand, Singapore and South Korea. The firm is looking at
connecting to other Asian and emerging markets; it anticipates connecting to one
more region before year-end.
2
EDITORIAL PUBLISHING
TOM LAMONT
Editor
STEVE MURRAY
Deputy Editor
VERONICA BELITSKI
Executive Editor
(212) 224-3297
ALEXANDRA ZENDRIAN
Reporter
(212) 224-3268
MEREDITH LEPORE
Associate Reporter
(212) 224-3318
STEFANIE GORDON
Associate Reporter
(212) 224-3968
STANLEY WILSON
Washington Bureau Chief
(202) 393-0728
KIERON BLACK
Sketch Artist
BRISTOL VOSS
Publisher
(212) 224-3628
LAURA PAGLIARO
Marketing Manager
(212) 224-3896
VINCENT YESENOSKY
Senior Operations Manager
(212) 224-3057
DAVID SILVA
Senior Fulfillment Manager
(212) 224-3573
SUBSCRIPTIONS/
ELECTRONIC LICENSES
One year - $2,965 (in Canada add $30
postage, others outside U.S. add $75).
DAN LALOR
Director of Sales (212) 224-3045
DMITRY MELNITCHOUK
Account Executive
(212) 224-3317
THEODORE HEALEY
PRODUCTION Account Executive [London]
DANY PEÑA
Director
LYNETTE STOCK, DEBORAH ZAKEN
Managers
MELISSA ENSMINGER,
JAMES BAMBARA,
JENNIFER BOYD, DOUGLAS LEE
Associates
JENNY LO
Web Production & Design Director
(44-20) 7779-8704
REPRINTS
DEWEY PALMIERI
Reprint & Permission Manager
(212) 224-3675
dpalmieri@institutionalinvestor.com
CORPORATE
GARY MUELLER
Chairman & CEO
CHRISTOPHER BROWN
ADVERTISING AND President
BUSINESS PUBLISHING
JONATHAN WRIGHT
Publisher
(212) 224-3566
ERIK KOLB
Editor, Business Publishing
(212) 224-3785
PAT BERTUCCI, MAGGIE DIAZ,
LANCE KISLING, ADI HALLER
Associate Publishers
BRIAN GOLDMAN
Advertising Production Manager
(212) 224-3216
LESLIE NG
Advertising Coordinator
(212) 224-3212
©Institutional Investor News 2008. Reproduction requires publisher’s prior permission.
STEVE KURTZ
Chief Operating Officer
ROBERT TONCHUK
Director/Central Operations & Fulfillment
Customer Service: PO Box 5016,
Brentwood, TN 37024-5016.
Tel: 1-800-715-9195. Fax: 1-615-377-0525
UK: 44 20 7779 8704
Hong Kong: 852 2842 6910
E-mail: customerservice@iinews.com
Editorial Offices: 225 Park Avenue
South, New York, NY 10003.
Tel: (212) 224-3297
Email: vbelitski@iinews.com
Wall Street Letter is a general
circulation newsweekly. No statement in
this issue is to be construed as a
recommendation to buy or sell securities
or to provide investment advice.
Wall Street Letter ©2008
Institutional Investor, Inc. ISSN# 704-20040
Copying prohibited without the
permission of the Publisher.
WSL111708
11/13/08
7:57 PM
Page 3
November 17, 2008
www.wallstreetletter.com
Trading
NYSE Readies Alternext Equities
NYSE Euronext is ready to launch the new
NYSE Alternext equities market (the
former American Stock Exchange) on Dec.
1. The market is being positioned as an
exchange for small- and micro-cap listings,
which will run parallel to NYSE Arca and
other subsidiaries. The exchange has mostly
Duncan
migrated the market onto the new trading
Niederauer
system and has been holding successful
testing this month. Duncan Niederauer, NYSE ceo, said on
an earnings call that the Amex acquisition is expected to
produce annualized cost savings of more than $100 million by
the end of the next year. Options will launch in the first
quarter. Alternext will feature competitive pricing.
Niederauer said that since the acquisition began, Amex
headcount of 471 employees has been cut by 35%. “We have
planned to reduce the number of retained positions to around
100 by the middle of next year,” he added. It has retained highprofile employees from the ETF and equities divisions, though
Neal Wolkoff, chairman and ceo, moved on to run the
Electronic Liquidity Exchange (WSL, 11/7).
Nasdaq Shines Amid Rubble
Exchange Performance
Gets Pummeled
Stock exchanges in the FTSE/Mondo Visione index continued
to see stock performance suffer amid a retrenchment of trading
and listing activity. The Nasdaq OMX Group made out the best
of U.S.-based exchanges last month, gaining 6.2%. The gain
adjusted losses to the least painful among most exchanges, 34.4%
year-to-date. The only exchange that performed better was the
New Zealand Exchange, which lost 32% in local currency terms
year-to-date, according to Mondo Visione. The Nasdaq reported
a 27% net income growth for the third quarter over the third
quarter of 2007 and 7% quarter on quarter. By contrast, NYSE
Euronext net income fell more than 30% for the quarter.
In the index, NYSE’s performance declined 23% last month
and 65.6% year-to-date. The CME Group made out worse for
the month, delivering a 24.1% loss, but did better for the year,
losing 58.9%. Rival IntercontinentalExchange posted a 6%
monthly gain, but still lost about 55.6% year-to-date. The worst
performers in the index were BM&F Bovespa and the LSE
Group. They lost 31.9% and 35.3% for the month, respectively,
and saw performance declined 76.8% and 71.8%, respectively,
year-to-date.
Wall Street Letter
ITG Sees Pre-Trade
Analytics Growth
ITG is seeing demand for pre-trade analytics
rising amid higher volatility and sharper focus
on risk management. The firm, which offers
pre-trade analytics along with trading
technology is seeing demand from institutions
that increasingly prefer to handle trading
themselves. “Pre-trade has gone from what I
Robert Gasser
would describe as voodoo science to become
more and more accepted. The demand to integrate it into our
product suite is as strong as it’s ever been,” said Robert Gasser,
ceo, at the Keefe, Bruyette & Woods conference in New York
last week. ITG’s pre-trade analytics play a prominent role in ITG
Logic, its trading process optimization suite, and ITG Data
Analytics, a portfolio optimization, transaction cost analysis and
risk mitigation suite.
ITG has been garnering more order flow as the buyside has
been moving away from broker capital in a risky environment.
Because the company has execution data from some of the
largest institutional managers, it is consistently plugging the
information into the pre-trade analytics models and anticipates
more growth in the space. ITG’s total commission revenues
increased to $121.2 million in the third quarter, up from $109.6
million in the second quarter and $117.1 million in the third
quarter of last year.
Nasdaq OMX BX To Launch With
Low Pricing
Nasdaq OMX BX, created from Nasdaq’s
acquisition of the Boston Stock Exchange, is
set to launch on Jan. 12 and will have low
pricing. Liquidity providers will be rebated 20
cents per 100 shares and liquidity removers will
be charged 22 cents per 100 shares. The
Nasdaq envisioned the platform as a place to
Brian Hyndman
test out various pricing structures (WSL, 2/27).
The exchange currently has about 50 users signed up. They
are testing their technology functionality and connectivity, and it
anticipates having 75 users when the exchange launches, said
Brian Hyndman, senior v.p. of transaction services. All firms
have to perform a basic certification test before they begin
trading on the exchange. Hyndman said the pricing coupled with
INET technology differentiates BX from other exchanges.
Through this acquisition, Nasdaq has gotten another
To receive email alerts or online access, call 800-715-9195.
3
WSL111708
11/13/08
7:57 PM
Page 4
Wall Street Letter
www.wallstreetletter.com
protected quote and it is using BSX’s clearing operation, which
will be rebranded as Nasdaq Clearing Corporation. It is set to
launch in the middle of next year and it will compete with the
National Securities Clearing Corporation.
BNY ConvergEx Launches
European SOR
BNY ConvergEx Group has begun using a smart order router
connected to four multi-lateral trading facilities in Europe. Those
MTFs are Chi-X, Nasdaq OMX, BATS and Turquoise. The firm
intends to offer more connections as more MTFs pop up. “We will
connect to MTFs that provide price improvement and liquidity.
There are going to be some winners and losers,” said William
Capuzzi, president of BNY ConvergEx Group’s G-Trade Services.
The router rebalances orders on a real-time basis and will move
trades based on market movement. This could provide some
latency, but Capuzzi insisted that the latency should be minimal.
“Whenever you add smarts to the model, that adds latency but we
are talking about milliseconds versus the opportunity to participate
in much deeper pools of liquidity, oftentimes at much better
prices,” he said. Capuzzi added that smart order routing can
improve prices between two and 15 basis points.
While the firm does not have a smart order router in Canada,
it will be introducing an algorithm in January for securities that
are inter-listed between the U.S. and Canada. The algo will allow
traders to look into markets in both areas and will either settle in
U.S. dollars or Canadian dollars, Capuzzi explained.
NYSE Gains More Control Of
Odd Lots
The New York Stock Exchange has changed its rules to be able to
quickly cancel fraudulent or manipulative odd-lot or partial roundlot transactions. DMMs who suspect these fraudulent trades can
request a review of the transaction by an officer of the exchange
and a representative from floor operations within 30 minutes of
the last allegedly fraudulent trade. An officer will then review the
transactions and supporting evidence and recommend whether
they should be cancelled. These determinations can’t be made later
than 3:00 p.m. the next trading day after the alleged violation.
The exchange is focusing on wash sales, or orders that involve
a buy-sell order coupled with an offer to buy or sell at the same
or better price with no beneficial change of ownership. Wash
sales are being targeted because they don’t expose the market
participant to market risk and can bulk up the number of trades
occurring in an otherwise illiquid security. “The effect of these
transactions is to ensure that the market participant is able to
access liquidity that is not naturally present in the market by
4
November 17, 2008
forcing the [designated market maker] to trade at prices that are
advantageous to the participant and disadvantageous to the
DMM,” according to the related rule filing. Disciplinary actions
have failed to deter such activity (WSL, 9/14/07). This rule
change is in line with a change made last year designed to
diminish impact on specialists by firms breaking up round lots.
CBOE Clarifies Obvious
Error Procedures
The Chicago Board Options Exchange has clarified its obvious
error rules to ensure that faulty opening transactions can be
nullified. Two floor officials, in consultation with a senior
executive officer, may determine that an underlying security
previously approved for options transactions no longer meets the
requirements and could therefore make the trades invalid. If any
firm believes that it participated in such a transaction at the
open, it has to notify the exchange within 15 minutes of the
execution, and the exchange should be able to annul the trades
within an hour. The official notified can either be a trading
official or a control room designee, though a trading official is
the one that would be handling the nullification. Both opening
purchases and sales are eligible.
IT Budgets To Significantly Tighten
IT budgets are expected to shrink 7% in 2009 and only grow a
modest 4% in 2010, with spending levels growing 8% in 2011,
according to a recent Celent study. Thanks to the credit crisis
and weakening economy, some longstanding IT vendor clients
could freeze their IT budgets, while potential clients will take
longer to make decisions on spending and seek shorter contracts.
“Flexibility, competitive pricing, modularity, leveraging crossproduct opportunities and exploiting core areas like operational
trade infrastructure and risk management are essential in staying
afloat,” said Cubillas Ding, senior analyst.
One of the few ways to cut maintenance spending is through
merging technology systems, which firms will begin next year.
New spending could be cut to the bare bones. IT vendors could
see reductions in new investment spending drop by 30-40% in
North America. In 2010, spending in this area could rebound,
especially in Asia; starting in 2011, new investment spending is
expected to accelerate in North America and Europe when firms
begin new IT projects, the report found.
In the wake of being acquired or merging, several firms are
also working on integrating their technologies and realizing those
cost savings. JPMorgan and Washington Mutual along with
Bear Stearns plan to integrate their systems by 2010. There will
be a growth in new trading strategies and algorithms to deal with
volatility in light of recent market conditions.
©Institutional Investor News 2008. Reproduction requires publisher’s prior permission.
WSL111708
11/13/08
7:57 PM
Page 5
November 17, 2008
www.wallstreetletter.com
Derivix Boosts Risk Analytics
Derivix, a broker-neutral options routing and
pricing system, has launched portfolio risk
analytics to let traders compare market
portfolio simulations. The service uses virtual
servers accessed through the internet instead
of requiring a user to generate the simulation
on his own system. “We tell our customers:
Michael Stern
don’t hire IT people, don’t maintain a server,
just trade,” said Michael Barrett Stern, chief strategy officer and
co-founder. The system includes pre- and post-trade shocks and
simulations and tackles sectors, accounts and groups.
The company says it launched the system now due to the
volatile market conditions. Traders hoping to cut costs can do so
without server maintenance costs. The system, which has been
introduced to several select customers, will be available to all
customers in the first quarter.
Recruiting Firm Taps Traders
Link Global Solutions, a fixed income recruiting firm, is looking
to hire former traders or sales associates for two or three new
recruiting positions that the firm is creating. The firm started a
year ago. The search firm wants to tap those with industry
experience. The firm would like to expand into equities and two
or three of the four to six recruiters it will hire next year will work
on equities recruiting, said Joe Messineo, founder. He is looking
for staffers who have a significant amount of experience in their
business and perhaps have been a recruiter for a few years.
ISE Seeks Permanent FX Market
Maker Arrangements
The International Securities Exchange is planning to put in
place a more permanent appointment process for its foreign
currency options market makers, so they can quote more
competitively and develop longer-term marketing strategies.
The ISE, which provides options on the six most common
currency pairs, picks market makers by auction; winners get a
trading license for three years. Under the new proposal, those
who win the auctions based on the market quality
commitments and dollar bid amount will be able to retain the
license as long as they wish. If approved, the proposal will go
into effect Jan. 1.
ISE intends to keep the requirement that there be 10
competitive market makers per currency pair, including new
listings. Officials said that they expect the market to become
more competitive as a result of the new auction process. “A
permanent allocation will allow FXPMMs to create and execute a
Wall Street Letter
long-term strategy to promote growth and trading in the foreign
currency product that has been allocated to it,” they wrote in a
related rule filing. Those that fail to meet their obligations will be
reviewed for extenuating circumstances; if they fail to improve,
they will be terminated.
ICAP Urges More Electronic
Trading, Transparency
Efforts to improve the over the counter equities and derivatives
markets infrastructure should be consolidated and intensified,
according to Mark Yallop, chief operating officer of ICAP. The
Committee on Payment and Settlement Processes Working
Group worked on deal confirmation and documentation,
collateral usage and central party clearing usage, among other
things. Other efforts have recently cropped up as well to improve
regulation and transparency.
Yallop quashed the idea that OTC derivatives trading should
be transferred onto exchanges, calling that unrealistic and
undesirable. “You impose the obligation to accept basis risk when
users from the OTC markets go to exchanges,” explained Yallop.
Instead, he suggested an overhaul of the OTC infrastructure and
simplification to help create more transparency. Some suggested
improvements suggested included more clearing and use of
central counterparties, more electronic trading and quicker
settlement cycles.
API Gains Prominence
For Faster Trades
Traders who are more latency sensitive are beginning to demand
Application Programming Interfaces more than FIX messages.
An API allows the user to access an offering more directly,
without adding the FIX communication protocol in the middle,
explained Meaghan Mullins, managing director of electronic
services at Knight Capital Group. While Mullins doesn’t see FIX
messages being significantly phased out, more traders are
requesting API.
Traditionally, statistical arbitrageurs and high-frequency
traders were using APIs to reduce latency. “As lower latency
becomes a very common theme Street-wide, the more traditional
buy- and sell-side customers are now asking about the availability
for a proprietary API,” said Mullins. Previously she would receive
one request a month about getting an API system; she is now
getting those requests on a weekly basis.
APIs usually require fewer messages than FIX. Venue-specific
APIs are used in markets without another messaging protocol. In
Europe, the exchanges use specific APIs while the multi-lateral
trading facilities mainly use FIX.
To receive email alerts or online access, call 800-715-9195.
5
WSL111708
11/13/08
7:57 PM
Page 6
Wall Street Letter
www.wallstreetletter.com
Tethys Adds FX Trading Capabilities
Tethys Technology has rolled out an extension of its Execta
platform for high volume foreign exchange trading desks, which
cuts out excess trading workflow. The FX offering now cuts FX
trades down to their essential executions and automatically
allocates gross executions back to the source accounts. Traders can
now trade FX on a net basis, reducing the number of currency
pairs traded and the amount of bid/ask spread crossed, explained
Mary Cogger, sales director. It simplifies the trading process and
reduces transaction costs for traders; it also allows traders dealing
with FX exposures such as spot, forwards and swaps, to reduce
their costs. It was developed based on client demand.
Arca Extends Passive
Liquidity Credit
NYSE Arca is extending credit for mid-point passive liquidity
executions to those traders dealing in Nasdaq-listed Tape C
securities. Previously, the $0.0015 per share credit was only
extended for New York Stock Exchange-listed posts that resulted
in executions for the Tape A securities. The incentive is for
resting orders that are matched against incoming orders at
midpoint; these order types have been gaining more traction at
exchanges as many institutions prefer the entire quantity of their
order to be executed over achieving a specific price. Arca is
applying the new pricing schedule retroactively to Nov. 3. “The
exchange believes that the proposed credit will foster additional
flexibility and increased system functionality for NYSE Arca
users,” officials wrote in a related rule filing.
Research
FundQuest Expands Research Team
FundQuest, a wealth management solution division of BNP
Paribas, has hired analyst Matthew Whitbread and plans to
expand its research team in upcoming months. It has been
gradually adding to the investment research management team to
support an increase in the number of advisory firms it serves and
the new projects. Two analysts have been hired in the past year,
bringing the team to 48, said a spokeswoman. Whitbread is a
Chartered Financial Analyst and previously worked at Pyramis
Global Advisors and MFS Investment Management.
The company is also seeing more interest in its ongoing
ActivePassive Funds study. It looks at the performance results of
active and passive investment management over various time
periods, analyzing over 16,000 actively managed investments in
58 investment categories and representing over $7 trillion in asset
value. Many advisors are also adopting FundQuest’s unified
managed account, a portfolio with investment vehicles such as
6
November 17, 2008
managed accounts, mutual funds and exchange traded funds.
Both ActivePassive Funds and UMA are approaching their oneyear anniversary.
Indie Joins Up With Pulse Trading
Furey Research Partners, a research boutique specializing in
small-cap strategy, has joined Pulse Trading’s group of
independent securities research providers. James Furey,
managing partner and founder of the recently launched Furey
Research, said the entire model of how research is provided and
paid for is changing, which has given major leeway to
independent boutiques. “The need for research is greater because
of the volatility in the market and the indies are going to fill that
void,” said Furey. “I am confident that this evolving model,
driven by technology and structural forces, will overcome many
of the buy-side’s frustrations with traditional practices.”
The Pulse research platform offers broker-dealer registration,
regulatory guidance, trading and execution and commission
management to boutiques. In the past, there was not an explicit
price on research, said Furey. Someone paying $1 million was
getting the same amount of information as someone paying $10
million, but technology has put a price on research and provided
digital rights, he said. “The value of research has never gone
down. What has changed is the mechanism to pay for it and the
cost of delivering it,” he added.
FINRA Gets Tougher On Trading,
Research Links
The Financial Industry Regulatory Authority is planning to
require firms to establish and maintain procedures preventing
communication between the research department and the
proprietary trading desk to prevent non-public information leaks.
Before, such information barriers were optional. Policies and
procedures should be reasonably designed to prevent the trading
department from getting and using non-public information
about research reports for its own gain. FINRA is making the
change as part of several tweaks to its interpretive material on
trading ahead of research reports, which is being folded into the
consolidated FINRA rulebook.
At the same time, the regulator is clarifying several rule aspects
to ensure that it’s not overly restrictive. For example, if a trading
desk happens to maintain public information on a research
report that has not yet been made public by its own firm, it is not
prohibited from trading on that information. Lately, many news
stories have focused on expectations of how a certain research
report will rank a company, based on the trends in analyst’s
coverage. FINRA doesn’t want firms to be unfairly excluded.
“However, having knowledge of a publicly discernible trend is
©Institutional Investor News 2008. Reproduction requires publisher’s prior permission.
WSL111708
11/13/08
7:57 PM
Page 7
November 17, 2008
www.wallstreetletter.com
not a viable alternative basis trading desk to adjust its inventory
position when [it is] also the recipient of non-public advance
knowledge of the content or timing of the research report in that
security,” officials warned in a related rule filing. FINRA also
extended the application of the rules to cover inventory positions
for any securities, regardless of whether it’s exchange-listed.
QSG Launches Stock Rating Offering
Quantitative Services Group has launched its QSG Edge, a webbased stock ranking research offering. The automated research
service provides daily ranking alerts, tracking drivers of risk and
return across strategies such as earnings momentum, deep value,
price momentum, relative value and historic growth. The offering
is geared toward portfolio managers, equities traders and analysts.
Traders can get in or out of positions faster based on the offering’s
rankings. “Wall Street analysts can sometimes make their buy/sell
decisions based on hearsay or emotion along with their
fundamental research, whereas one of the advantages of our system
is that our models are based on facts and figures without the
conflict of emotion,” said Marty Donnelly, product consultant.
Retail Brokerage
Indies, RIA Firms Woo Brokers
Top producers are being presented with
appealing offers from registered independent
advisor firms and independent broker-dealers.
According to a study by Fidelity Investments’
National Financial, 34% of brokers have been
offered a sign-on bonus to switch firms from
September 29-October 8. The study used 127
Sandy Metraux
advisors working at national wirehouses,
regional brokerages, insurance brokerages and banks. “Brokerdealer firms and RIAs understand that in the current market
environment attracting top brokers and advisors can be a critical
component to their business growth efforts, as loyal high-networth clients may often follow their trusted advisors,” said Sandy
Metraux, executive v.p. of National Financial.
Brokers believe that 60% of their clients, on average, would
follow them to a new firm. It found that 46% of wirehouse
and regional firm brokers reported the highest percentage of
sign-on bonuses.
One recent Charles Schwab ad said “Independent adviser’
suddenly has a nice ring to it,” and a new Fidelity ad said “Want
to be your own boss?” Gail Graham, executive v.p. of Fidelity
Institutional Wealth Services said, “With the unprecedented
events on Wall Street in the past couple of months, we are seeing
brokers evaluate the independent model at a very rapid pace.”
The increase is the result of a combination of factors, such as a
Wall Street Letter
dramatic decrease in the value of brokers’ long-term
compensation and investors needing independent, objective
advice in this market. Fidelity Investments plans on absorbing
$14 billion in new assets from its registered investment advisor
division by the end of the year (WSL, 9/24).
To Lure FAs, Upgrade Tech
The technology a firm offers is the most important factor for the
majority of advisors when they are looking at new firms, an Aite
Group study found. About 72% of advisors consider technology
important or essential in their decision to work for a given firm,
particularly as a large share of brokers goes independent, said Alois
Pirker, senior analyst. The study used 201 financial advisors.
Almost half of advisors ranked financial planning tools as
their most important application. “If they can increase their
client service level and become more efficient, then they can get
a bigger book,” said Pirker. The study found that the way to
increase efficiency is to increase integration between brokerage
and wealth-management functions, providing a bundled
technology package in areas such as customer service and
account setup. Firms that have done this recently include
Wachovia Securities and Envision. “Technology laggards risk
losing high-producing employees or face a lower chance of
competing for the 25% of brokers considering leaving their
existing firm,” said Pirker.
FAs Turn To Alternative Investments
Advisors are directing their portfolios and clients to alternative
investments. A Morningstar study of 1,180 financial advisors
found that among advisors who work with individual investors,
almost 80% use alternative investments. “With this downturn in
the markets, advisors’ favors are shifting, and they are looking
for different strategies for investors,” said Steve Deutsch,
director of separate accounts and collective investment trusts.
About 40% of advisors had more than half of their high-networth clients’ assets in some alternative investments. Almost half
of the institutions surveyed allocate more than 10% of their
portfolios to alternative investments.
“The line between traditional and alternative money
management is becoming very hard to define,” said Deutsch.
There are more alternative investment strategies in mutual funds
and exchange traded funds, a higher prevalence of retail and
alternative money managers competing for assets under
management, and traditional money managers acquiring,
merging with, or recruiting alternative investment expertise. The
trend of advisors moving towards alternative investments like oil
and gas limited partnerships, church bonds and equipment
leasing will continue, said Deutsch.
To receive email alerts or online access, call 800-715-9195.
7
WSL111708
11/13/08
7:57 PM
Page 8
Wall Street Letter
www.wallstreetletter.com
November 17, 2008
Futures & Options Expo ‘08
Over 5,000 traders, exchange executives and technology providers packed into the Hyatt Regency Chicago last week for the Futures Industry
Association’s Futures & Options Expo. The exhibit also attracted 180 vendors, culminating in the biggest gathering in years. The
entertainment portion of the program was also lavish, prompting some to wonder whether the exchanges were immune to the credit crisis.
Associate Reporter Stefanie Gordon covered the event for WSL.
Lukken: Int’l Regulators Should
Share Data
Departing Commodity Futures Trading
Commission chairman Walter Lukken
called for standardized sharing of market
data among regulators in his address to a
packed room at the Futures Industry
Association’s Futures and Options Expo
yesterday. Such a framework would allow
Walter Lukken
international regulators to better police
violations. Lukken cautioned that for the proposal to be
effective, regulators would have to agree to use the same data
format, such as XML. He also urged better cooperation on
bankruptcy treatment of customer assets.
Lukken also pushed for an overhaul of the regulatory
system into a new systemic risk regulator, a new market
integrity regulator, and a new investor protection regulator.
He rejected calls to merge the Securities and Exchange
Commission and the CFTC, an issue he’s sounded off on
many times in the past. “If change is in the air, we should
start from scratch with the new regulatory vision.
Regulatory framework will take months, maybe years to
implement,” he said. In the short term, Lukken suggested
regulators should advance efforts by market participants to
create clearinghouses for credit default swaps.
NYSE Euronext Revs Up
Global Futures
NYSE Euronext is betting that closer ties with China will help it
compete in the global futures market. It recently signed two
memoranda of understanding with the Dalian Commodity
Exchange and the Zhengzhou Commodity Exchanges, two of
the four futures exchanges in China, and will help the exchanges
develop their options and futures markets.
“These MOU’s are an important stake in the ground. They
will put us on level footing with other key futures exchanges
across the world,” said Hugh Freedberg, head of global
derivatives at NYSE Euronext. The two MOUs allow the
exchanges to share market research and market structure info.
NYSE Euronext will also supply Dalian and Zhengzhou
8
electronic trading and market data distribution technology.
NYSE’s European derivatives platform, Liffe, has fallen on some
hard times amid market volatility. According to NYSE’s third
quarter earnings report, it saw transaction volumes decline
10.3% for the quarter.
Ballista Sees Silver Lining
In Volatility
Having finally rolled out its alternative trading system for block
options and delta neutral orders to the public, Ballista Securities
is betting on high volatility levels to help its trading volume.
“Trading volatility is at an all-time high and gives an incentive
for people to trade. Whenever you see a decrease in retail volume
like we’re seeing now, there is a small uptake in institutional
volume,” said Robert Newhouse, ceo. With a minimum order
size of 500 contracts, the Ballista ATS system is intended for an
institutional client base.
The system electronically matches buyers and sellers of blocksized option and volatility orders. 3D Markets has also been
working on its block trading system as well as crossing at a
volume-weighted average price (WSL, 5/23).
Deriv’s Continue Reeling From
Short-Sale Ban
Despite the Securities and Exchange Commission’s short-sale
ban being lifted, derivatives trading executives are still feeling
its effects. Options transactions were severely impacted by the
short-sale ban as the regulations made it harder to execute
puts and other strategies that would have shorted the stock
(WSL, 10/10).
“Short sale volume is still down 50%. For one, retail and
institutional clients are afraid they’ll get caught out of the blue.
They’ve also heard so much about the ban that they were chased
away, and then didn’t hear much when the ban was lifted. They
still think restrictions are out there,” said Andrew Kolinsky, head
of sales and client services at Citadel.
The effects are not just limited to U.S. markets. “Some
countries that banned short-selling are continuing the ban,
months after ours ended. There was no coordination with it,” said
William Easley, vice chairman of the Boston Options Exchange.
©Institutional Investor News 2008. Reproduction requires publisher’s prior permission.
WSL111708
11/13/08
7:59 PM
Page 9
November 17, 2008
www.wallstreetletter.com
Repoter’s Notebook
Wall Street Letter
In The Crowd
“What Recession?”
The Futures Industry Association opened
the Expo opening reception with a wine
tasting at the Art Institute of Chicago’s Stock
Exchange Trading Room. Guests trekked through the
museum to find a spread of wine and hors d’oeuvres awaiting
them in a cavernous room. The spread was lavish enough to
prompt one amused bystander to wonder “Recession? What
recession?” Bottles of wine from North and South America
dotted the room, with enough cheese and dips to allow every
dairy farmer in the Midwest to sell the silos and collect for an
early retirement.
Rob Mowry of Trading
Technologies challenges
co-worker Jamie Ricks
to a game of foosball at
the exhibit hall.
A Side of Foosball
The basement of the Hyatt Regency overflowed with beer,
sushi, hot dogs, and gifts as more than 130 exhibitors poured
out their wares at the expo. Sports buffs could practice their
swing with Wii golf at Maron Structure Technologies booth,
or give foosball a shot at the Montreal Exchange’s spot. In
light of recent economic woes, both NYSE Liffe and Business
Only Broadband offered chocolate half dollar coins at their
booths. Spectators in need of a little R&R could treat
themselves to back and neck massages courtesy of LCH
Clearnet, followed by a good shoe shine from RSM
McGladrey. Smokers could pick up a cigar, hand-rolled on the
spot, from Dow Jones.
CME Group
reception at River
Arts Center.
Kseniya Wright and
Joe Desnoyers of RTS
at the opening
reception wine tasting.
Artistic Sidecar
The CME Group Reception held at the River East Art Center
showcased both art and libations for conference attendees after
the last panel discussion came to a close. The two floors of the
center were packed, with blue lights creating the illusion of
water dripping down the walls. Taking an educational walk
around the various exhibits seemed to take a backseat to finding
a spot around the mammoth wet bar on the ground floor.
They Said It…
“We didn’t get a Board of Trade, but we did get a Clearing
Corporation.”—Jeffrey Sprecher, chairman and ceo of
Gene Koziarz of
Logical Information
Machines and Mark
Haraburda of
Barchat.com.
Magnus De Let and Warren Geers
of Johannesburg Stock Exchange.
“They don’t call it payment for order flow. They call it marketing
fees.”—Andrew Kolinsky, head of sales and client services at
Citadel, on options market structure.
Intercontinental Exchange, on growth prospects despite missing out
on the Chicago Board of Trade acquisition a year ago.
“Well, in your case, the answer seems to be “cowboy boots.”— Matt
“What’s the difference between a bond and a bond salesman? Bonds
mature.”—Brad Hintz, senior analyst at Sanford C. Bernstein.
panelist on the question of differentiation.
“We are the only unsocialized part of the financial industry.”—
Richard Sandor, chairman and ceo of the Chicago Climate
Exchange, on less regulation in the futures markets.
Andresen, co-ceo of Citadel Derivatives Group, answering a
“We’re going to launch four more exchanges, so next year here
we’ll have our own panel.”—Gary Katz, ceo of the
International Securities Exchange, on the high number of
exchanges in the options industry.
To receive email alerts or online access, call 800-715-9195.
9
WSL111708
11/13/08
7:57 PM
Page 10
Wall Street Letter
www.wallstreetletter.com
November 17, 2008
People & Firms
Smith Barney Staffs Up
Jon Lonske, Jon Hyett and Justin Fuery, formerly of Morgan
Stanley, have joined Smith Barney’s Boston office. They will be
reporting to Jon Malarney. The team has $5 million in
production and $347 in assets under management.
In Boca Raton, Fla., William Cappeller and Carole Marko
will be reporting to Steve Sapirstein. Capeller and Marko come
from Merrill Lynch and have $1.41 million in production and
$178 million in assets under management.
The St. Paul, Minn., Smith Barney branch has just added Kevin
Cunningham and Kenneth Last. They came from Wachovia and
will be reporting to Dennis Rowland. They have $1 million in
production and $150 million in assets under management.
In Houston, Ben Cravens, formerly of UBS, will be
reporting to John Hantak. He has a little more than $1.1
million in production and nearly $150 million in assets
under management.
JPMorgan Lures Hirshman Back
Susan Hirshman has returned to JPMorgan as a wealth advisor.
She had left her practice management position at the firm just last
spring to work on her personal finance book for women, which
will be released early next year. She will be reporting to David
Bloom, head of wealth advisory practice for the Northeast.
Hirshman will advise clients on wealth transfer strategies, business
succession, charitable giving and retirement planning.
v.p. of business development from FirstMark Capital
(formerly Pequot Ventures), where he worked as associate
focused on data, analytics and infrastructure businesses. Paul
McCabe joined as v.p. in the private equity market from
JPMorgan’s wholesale mortgage group. Michael Moro joined
as v.p. of data & analytics. He was previously part of
Citigroup’s global fixed income group.
Liquidnet Hires Tech Head
Neal Goldstein has been hired by Liquidnet as the head of
enterprise technology services. He will be responsible for
establishing global infrastructure standards and will report to Kevin
Lupowitz, chief information officer. Goldstein worked for CIBC
World Markets, where he was U.S. regional head of technology.
Pragma@Weeden, Fidessa Get
Buy-Side Tech Honors
OnePipe optimal liquidity management system was named Best
Buy-Side Newcomer in the Buy-Side Technology awards.
OnePipe, offered by Pragma@Weeden, was introduced in
January to maximize efficiency and access non-displayed
liquidity. In July, OnePipe launched Lifeguard, which offered
advanced gaming logic, to detect and deter price manipulation
strategies. Fidessa LatentZero’s Sentinel was named best
compliance solution at the same awards. Sentinel ensures pre and
post-trade compliance for over the counter derivatives including
accurate measurement of counterparty and global exposure.
OTC Valuations Snares CTO
OTC Valuations Limited, a valuation company focusing on
OTC derivatives, has tapped Paul Bergbusch, former quant
analyst on the equity derivatives desk of hedge fund BlueCrest
Capital Management, as chief technology officer. He will be
leading efforts to expand coverage of structured products and
exotic derivatives out of Vancouver. At BlueCrest, he was
responsible for modeling volatility instruments, development and
analysis of trading strategies and front-office system integration.
CEP Firm Taps FIG Execs
Coral8, a complex event processing provider, has tapped two
executives for its expanding financial services division. Colin
Clark joined as executive v.p. of financial services to lead the
group. He was previously v.p. of customers at StreamBase and
founding CTO of Kaskad Technology. Michael DiStefano
joined as v.p. of architecture, responsible for advancing missioncritical CEP systems to banks and brokerages. He was previously
the founder of Integrasoft and v.p. of architecture at GemStone.
SecondMarket Expands Reach
SecondMarket, the illiquid marketplace formerly known as
Restricted Stock Partners, has brought on five new v.p.s to
support expansion into new asset classes. Michael Anderson
joined as v.p. of the bankruptcy claims market. He was
previously assistant v.p. of business development in the global
structures products group at Dominion Bond Rating Services.
Owen Dolan joined as v.p. of the public equity market. He
was previously a trader and analyst for ProMed Management,
a long/short healthcare hedge fund. Samuel Hodges joined as
10
Investars Names New Director
Investars, an integrated research management company, has
named Danny Murray to its board of directors. Murray is the
founding principal and ceo of DMC Worldwide, and also acts as
senior advisor for political and government affairs. He has more
than 40 years of experience as an attorney and on the Hill. Kei
Kianpoor, ceo of Investars, said that Murrays expertise will be
invaluable next year as the company rolls out new offerings and
expands into global markets.
©Institutional Investor News 2008. Reproduction requires publisher’s prior permission.
WSL111708
11/14/08
12:14 PM
Page 11
November 17, 2008
www.wallstreetletter.com
BOfA TO JOIN
(continued from page 1)
While BofA was not part of the protocol, Merrill Lynch was—
which also led to confusion over the enforceability of the
restrictions. The protocol acts as a truce between firms and allows
brokers to take clients’ names, addresses, e-mails and phone
numbers to contact them about transferring their accounts after a
certain time. Prior to the protocol, which came about in 2004
and was championed by Merrill Lynch, UBS and Smith Barney,
lawsuits between brokerage firms were more rampant and the
protocol agreement has stemmed these lawsuits.
Other firms that also have the protocol agreement include
Morgan Stanley, Raymond James, Wachovia, and Focus
Financial. The restriction was especially concerning for Merrill’s
Private Banking & Investment Group and Wealth Management
advisors because they typically have larger books of business and
are concerned about being able to leave the firm after the BofA
merger is finalized.
Although still unhappy with the terms of their retention
offer, Merrill advisors are feeling more at ease with signing the
retention deal since the BofA/Merrill announcement about
Wall Street Letter
joining the protocol, according to a former Merrill Lynch
advisor who opted not to sign his retention deal. Recruiter
Darin Manis, ceo of RJ & Makay, noted that the protocol
announcement is part of a larger issue related to the BofA
merger. “[The combined platform] joining the protocol is a
good sign for Merrill advisors because if BofA had no intent
of being part of protocol that would go way beyond just the
issues of protocol and actually be a symbol of saying ‘not only
are our cultures completely opposite but we have no interest
at all in compromising,’” he said.
Calls to John Thain, Merrill ceo, were referred to a Merrill
spokeswoman who did not return calls by press time. Although
no plans to amend the retention offer have been released, a BofA
spokesman said that the plan for the combined brokerage
platform to join the protocol for recruiting brokers would allow
Merrill Lynch advisors to continue moving between protocol
member firms but did not confirm the date for when this would
go into affect. “BofA financial advisors are not currently a
member of the protocol but our efforts are currently underway to
determine the specifics of how and when they would become a
member of the protocol,” he added.
—Melissa Karsh
BOFA ANALYSTS
Where Are The II-Ranked Analysts?
(continued from page 1)
Sector
and BofA was ranked sixth, but the latter bank is now lagging
behind in research due to overcutting the department earlier this
year (WSL, 3/14).
On Nov. 7, BofA said in an internal memo that Candace
Browning, head of global securities research and economics for
Merrill, would be head of global research after the deal goes
through. The bank has yet to determine who would be leading
U.S. equity research. Michael Rietbrock is the head of equity
research at BofA. Browning, Rietbrock and a BofA spokesman
did not return repeated calls by press time.
The two research departments overlap the most in
restaurants, banks/midcap and wireless/telecom equipment
coverage. One East Coast recruiter said Merrill management will
most likely go by sector rankings to deduce which analysts
should stay and which should go. This process is comparable to
what JPMorgan and Bear Stearns did when they were putting
together the research department after the combination in
March (WSL, 5/9). Merrill is better ranked in the education,
electric power, healthcare, housing sector, transportation and
utilities sectors. BofA ranked better in public facilities and
development sectors. Merrill also has twice as many II-ranked
analysts as BofA (see chart).
—Meredith Lepore
Paper and Packaging
Capital Goods and Industrials
Airlines
Autos
Beverages
Restaurants
Tobacco
Energy: Oil Services & Equipment
Banks/Midcap
Financial Institutions
REIT’s
Healthcare
Healthcare Tech & Distribution
Media
Technology
Wireless/Telecom Equipment
Telecom Services
Macro
Merrill Lynch
Bank Of America
George Staphos
Kenneth Hoexter
Michael Morin
John Inch
Jonathan Ellis
Michael Linenberg
John Murphy
Rachel Rothman
David Adelman
Alan Laws
Heather Wolf
Guy Moszkowski
Kenneth Bruce
Edward Spehar
Jay Cohen
Stephen Sakwa & Team
Thomas Gallucci
Thomas Gallucci
David Risinger
Gregory Gilbert
Jessica Reif Cohen*
Steven Fox
Jay Vleeschhouwer
Justin Post
Kasturi Rangan
Tal Liani*
Bryan Spillane
Joseph Buckley
Kenneth Usdin
Robert Willoughby
Timothy Long
David Barden
Tatyana Hube & Team
David Rosenberg
Heiko Ebens team
Richard Bernstein
Steven DeSanctis
Mary Ann Bartels
*Ranked in two subsectors
To receive email alerts or online access, call 800-715-9195.
11
WSL111708
11/14/08
12:14 PM
Page 12
Wall Street Letter
www.wallstreetletter.com
FINRA INSTITUTES
(continued from page 1)
customers to the market.
Now that the market has grown to more $160 billion traded
on Pink OTC Markets and $42 billion traded on OTC Bulletin
Board last year, regulators are taking notice. Knight saw an
average daily volume of three trillion equity shares in September,
compared to 832 million listed equity shares, though those share
prices are much higher.
Pink OTC Markets expects to see volume increase as much as
50% in the next three years, said Cromwell Coulson, chairman
and ceo. More companies could begin to list as a result, explained
Matt Samelson, Aite Group analyst.
“Each trade is more important because they’re less liquid,”
he said.
Knight incorporated the limit order protection rule into its
system starting Nov. 3 and it has also extended this same
protection to market orders.
“If more companies list on the pinks, then Nasdaq OMX
Group and [the New York Stock Exchange] could get more
listings in the future,” said an exchange executive.
While companies don’t have to list on pink sheets before
listing on an exchange, many find it easier to attract liquidity
on the platforms.
—Alexandra Zendrian
UBS TO LET
(continued from page 1)
Brothers producers coming over to UBS and wanting to be
recognized as they were at Lehman. He said the private wealth
management unit alone at UBS has brought in around $56 billion in assets from former Lehman Brothers advisors in the
last few months. “This is the Lehmanization of wealth
management at UBS. It was a big deal to be a managing director
at Lehman,” said the employee. Currently, Credit Suisse is the
only other firm to offer brokers managing directorships.
Merrill Lynch does not allow financial advisors to become
managing directors but they can qualify for a senior v.p. title if
they have $20 million in production credits over 10 years. A
spokeswoman for Morgan Stanley declined to comment on its
title eligibility policy.
The announcement about managing directors came as
part of a memo to brokers on a new payout grid. All advisors
who produce more than $440,000 will get one to twopercent across the board. The has reduced the number of
pay grids to 10 from 16. For details, please visit
www.wallstreetletter.com.
—M.L., Melissa Karsh
12
November 17, 2008
In the Bull’s Eye
Unemployment Vultures Stake Out Party
As Wall Street attempted to get its Pink Slip party
underway last Tuesday, more than dozen members of the media
invaded the space, camera crew in tow. That made the first half
of the party difficult to navigate, as people almost smacked their
heads against cameras. Despite the bother, the publicity drew
recruiters who wouldn’t pick up calls before. As the organizers
gave out glow-in-the dark bracelets to distinguish between
attendees, recruiters’ function-appropriate green shone
throughout the bar. And with good reason: more than 500
people attended, with the line sometimes wrapping around the
block. The Public House restaurant divided into the networking
bar area and “the pit,” where recruiters set up shop to interview
the candidates. Wonder how many hit the wrong area first.
Quote Of The Week
“[The combined platform] joining the protocol is a good sign for
Merrill advisors because if BofA had no intent of being part of protocol, that would go way beyond just the issues of protocol and actually be a symbol of saying ‘not only are our cultures completely
opposite but we have no interest at all in compromising.’”— Darin
Manis, ceo of RJ & Makay, on BofA relaxing restrictions on Merrill
broker movement (see story, page 1).
One Year Ago In Wall Street Letter
The American Stock Exchange planned to increase its annual
listing fees to cover listing development costs and better match
the Nasdaq Stock Market’s level. [Since then, Amex has become
part of NYSE Euronext. For the latest on the now-renamed
NYSE Alternext, please go to page 3.]
Five Years Ago
The Philadelphia Stock Exchange had been notified by the State
of Pennsylvania that it owed $1.12 million, representing five
years of unpaid corporate income taxes including interest and
penalties. [Phlx dealt with the matter and has since been acquired
by the Nasdaq OMX Group.]
10 Years Ago
Bear Stearns reportedly laid off a handful of professionals from
its equities business, joining the swelling ranks of firms to shed
staffers amid hard times on Wall Street. [Bear Stearns was
acquired by JPMorgan in a rescue sale this March.]
©Institutional Investor News 2008. Reproduction requires publisher’s prior permission.