by Charles Gasparino
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Product Description
A Long Way to the Top Rags-to-riches stories abound in American lore, but even Horatio Alger would have been hard-pressed to write one as powerful as Richard Grasso's: the son of a working-class family whose childhood dream was to become a cop, he grew up in New York City's outer boroughs, as far removed from the marble halls, expensive suits, and imported cigars of the New York Stock Exchange as if his grandparents had remained in Italy. Here is the riveting story of how the "Little Man in the Dark Suit" rose to become the most influential CEO in the Exchange's history. Minus the tony upbringing, affluent prep schools, or inside connections that were de rigueur for top Wall Street players, Grasso would master the subtle deal-making and politics necessary to succeed in the most competitive business on Earth. The Day the Market Fell The story of September 11, 2001—the shock, panic, resilience, and heroism—is one that's been told many times. But on that day, Richard Grasso faced a challenge no other CEO of the Club had ever imagined: how to bring the very heart of global finance back from near-death to functioning operation. Swiftly, completely, and without the public knowing how desperate the struggle really was. He met it with aplomb: his finest hour, and yet one that sowed the seeds of his own destruction. A Plutocrat's Pay As the Exchange leapt from success to success, and Grasso's reputation, already gold-plated following 9/11, grew with it, the Club's Board of Directors lavishly rewarded him with a pay package that even the CEOs at the world's largest corporations might envy: more than $140 million in deferred compensation. It was a package that, when leaked, brought down a hailstorm of protest; bitter divisions among the most powerful names on Wall Street; an investigation from the "Scourge of Wall Street," thenAttorney General Eliot Spitzer; and Grasso's eventual humiliating downfall. The End of an Era Almost single-handedly, Grasso had kept the famous specialist system, where human traders matched buy and sell orders, front and center at the Club. As competing camps plotted his downfall, the exchange's fate became clear: without Grasso, it might survive and indeed flourish, but the Exchange, the firms that supplied it with business, and the structures underpinning the movement of money around the country and the globe would never be the same.
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Average Customer Review:
0 of 0 people found the following review helpful:
 Rise and fall of Dick Grasso , 2008-05-04
An interesting work that provides an inside picture of not only the NYSE, Wall Street but also some of the powerful people involved in high finance and corporate America. This book is particularly for you if you are looking for a detailed biography of Grasso. I was looking forward to reading about the pay controversies involving the 140 million retirement cash payout with a contested 48 million additional sum and the battle with Elliott Spitzer over, what was construed, as an excessive payment for a non-profit company. The interest in pay and Spitzer's involvement doesn't really take off until roughly 180 plus pages. However, the first half of the book covers well Grasso's rise from humble means and start with the NYSE, his involvement with the floor traders, his rise, his ability to recruit companies to the NYSE and his ability to promote the NYSE with the ringing of the bell each day with celebrity and his getting the NYSE up and running after 9-11. And there is some glitz about Grasso's high power associations, dinner at Rio's and his celebrity. The fall starts with the emergence of his pay package that grows with one of his strongest supporters on the compensation board with significant salary increases that are often deferred into a NYSE retirement account. Although hard to fathom, even after reading the book, it seems that many on the compensation board, although recognizing the value of Grasso, seem to lose focus on what he is getting paid until Grasso decides to cash out 140 million all at once. Changes on the NYSE board that impact Grasso included current Treasurer Secretary Henry Paulson, with Goldman Sachs at the time, who, according to the author, undermines Grasso's position with the NYSE exchange board through back channels with the intention of modernizing the NYSE from floor traders to a computerized system. In addition, the failure of a former political associate of Spitzer's who acts as chair of the compensation review committee had great difficulty to comprehending Grasso's pay package that leads to conflicts that catch many members of the board surprised. Many of the NYSE board are well known names that range from Mel Karmazin, a Grasso supporter, to former Secretary of State Madeline Albright, who allegedly supported Grasso initially but turned against him. The book really takes an interesting turn when Grasso's pay goes public and his rare failure in public relations goes into over drive when he also tries to get a pal on the NYSE board after the individual had just been publicly run through by Spitzer. Also heating up the book is the coverage of the interim NYSE chairman's John Reed's loose cannon statements that irk the recently departed Grasso into fighting back full bore (amazing how supposedly smart people can say the wrong things publicly.) My only misgivings is that I wish there was more detail about the Spitzer v. Grasso fight over Grasso's pay that is only addressed in the final stages of the book and very lightly. However, by the end of the book, the NYSE moves from floor trading to a more modern computerized method of doing business during the chairman tenure of John Thain, formerly of Goldman & Sachs and an associate of Paulson's.
0 of 0 people found the following review helpful:
 "If you want a friend on Wall Street, buy a dog....", 2008-05-04
I'm not sure who was the first person to make that statement, but after reading Gasparino's book it certainly rings true. I've always been a Grasso fan after seeing him shrug off being called "the little bald-headed crook" on the Imus program. Imus of course makes his living insulting (usually) important people, some of whom don't take it kindly... Grasso (and the NYSE) were also big contributors to the Imus Ranch for Kids with Cancer -- a great cause.
On the other hand, I never could understand how the specialists (whose existence Grasso defended against powerful critics like Fidelity and Goldman Sachs) could actually add value to what is basically an auction. Ebay, for example, seems to work fine by automatically managing its marketplace, and as a private investor I can't tell the difference between an NYSE transaction or a NASDAQ one except on the NASDAQ I can view "level 2 quotes" (an explanation of which is outside the scope of this review).
But Grasso deserves credit for building (and, after 9/11 rebuilding) the NYSE. And you can certainly make a case for some kind of human interface after seeing what happened during the '87 crash.
Charlie Gasparino has an informal but precise writing style. It's as if you're having a beer with him after a hard day trading, and he lightens things up relating tales like Maria Bartiromo (from the floor of the exchange on live CNBC TV) being nearly run over (and then cussed-out) by an NYSE trader in hurry. After questioning 17 of the "animals", the culprit was identified, fined, and had a black mark on his "permanent record". Of course having a glamorous anchor mingling with "real" traders on live TV was at least one area where the hated NASDAQ could never compete...
Now that the NYSE is nearly all electronic like the NASDAQ, and most of the specialists and traders are out of a job, a long chapter in the US stock market history is at a close. A bigger threat to both may be the Sarbanes-Oxley legislation, which is causing overseas corporations to question the value of listing on ANY US exchange.
After reading the book, I'm still a big Grasso fan and think if the titans running Goldman, Bear, etc. were worth their (much bigger) paychecks then the "little guy" certainly deserved his...
0 of 0 people found the following review helpful:
Good read. Raises many unanswered questions., 2008-03-24
Interesting and informative read about one of the bigger scandals on Wall street in recent years, that of Richard Grasso's huge retirement package. Executive pay is something most of us can easily get riled up about, and the book seems to do a good job giving us both sides of the story so we avoid seeing it as a black and white issue. In the end the issue may not be the pay itself, but the chain of events and lack of oversight that lead up to it. What interested me more than the executive pay issue itself was getting some insight into the power-plays and politics involved on Wall Street, which even today must be playing itself out with the collapse of Bear Stearns and the Spitzer scandal making the most recent headlines.
The book also sheds some light on the internal workings at the NYSE, although I think it could've gone into much more depth about issues dealing with shady behavior by NYSE specialists, and other ways the system seems to be screwing the small investors.There are mentions of front-running, inter-positioning, manipulation, big fines paid by the specialists, quotes such as specialists having a "license to steal".. but in the end, I'm left wondering what became of all this. How much money did they "steal" from the 401K's? Did I somehow get screwed when I bought/sold a NYSE stock? One thread in the book also dealt with the particularly persistent CEO of AIG trying to get the specialist to give more support to the stock. Perhaps this is the advantage a company receives by being listed on the NYSE, but as a normal investor, the idea of the specialist giving artificial support to a stock based on the CEO's wishes is a scary one if not outright illegal.
All-in-all an enjoyable read for anyone interested in learning more about what really happens on Wall Street.
0 of 0 people found the following review helpful:
Raw meat for the Street, 2008-03-21
Gasparino proves himself to be one of the most tuned in reporters of Wall Street in this fascinating gossipy book about the rise and self inflicted fall of Dick Grasso as the head of the New York Stock Exchange. Gasparino obviously has done a lot of digging; replete with inside stories, quotes from most of the participants, and leaks, they all paint a vivid landscape of the machinations of the Street and the politics of New York City. What is remarkable is the long term brilliance of some and the myopia of others as the institution of the Exchange is changed by Grasso's fall. The Aesopian tale of the scorpion and the frog comes to mind in the interplay of Spitzer and Grasso. Once allies, they boarded the raft together until the existing pay package scandal was exacerbated by John Reed and his investigation. One can all but imagine Grasso asking, "why me?" To which the now disgraced scorpion responds "it is in my nature." How true that all seems in the aftermath of Spitzer's fall into the mire of call girl scandal.
2 of 3 people found the following review helpful:
A Wonderful Peek into Wall Street for the Outsider, 2008-02-22
A few years ago, when I first heard of Mr. Grasso's salary I recoiled in shock. The presentation of the "facts" by the press led me like the pied piper to this inevitable reaction. Simply stated, I believe I reacted in the way that the news media wanted me to; in a sense I was programmed by the coverage to react the way I did. In retrospect, there may have been some balanced reporting out there at the time; I did not read everything or even a great deal about the case. It seemed so open and shut.
I purchased this book, not so much because it was about the NYSE and Mr. Grasso, but because I admire the author. Now, I admire the author even more and I have, at last, been exposed to a balanced account of the "Grasso story." Although I doubt that Mr. Gasparino intended it, I have come to the conclusion that Mr. Grasso's pay was what his peers thought it should be. Mr. Grasso's detractors say that he stacked the compensation committee and the board with his allies.
All of us who work for institutions have their pay determined by others. Furthermore, some of us, including me, have cultivated those who determine their pay and have received above average salary advancement on a consistent basis, often because of this cultivation. Besides schmoozing those who set our pay, most of us try to excel at our jobs and thus repay the organization for our compensation. In Mr. Grasso's case there is so much objective evidence that he executed extraordinarily as an employee of the NYSE, at all position levels, that I find it difficult to rationalize the attacks made on him.
Bad "optics" is used to explain the awkwardness of Mr. Grasso's salary package at the time of its revelation to the public at large. Having been the victim of negative "optics" about my own salary level, I understand what this meant for Mr. Grasso. In his case, as in mine, people thought they could gain personally by making attacks on the level of compensation. There is no point complaining about the unfairness of this process, e.g. standards being applied selectively by a person to justify an attack on another person. Where "politics" intervenes, and it often does, fairness flees.
Mr. Gasparino's book reveals much about the "politics" of the stock marketplace and how the objectives of various players conflict with one another in this highly competitive world. The oft heard complaint that Mr. Grasso was the chief regulator of the NYSE members and therefore should not have received such a high salary, becuase regulators are never paid very much, smells bad or, at best is simply naive. It is true that ONE of Mr. Grasso's MANY responsibilities was that of a regulator but his primary function was to promote the welfare of the NYSE and its member organizations. This he did superbly and, for what it's worth, I have the impression that he was not such a bad regulator given all of the conflicts of interest that are inherent in any system of what is euphemistically called "self regulation."
Perhaps, I should say that I know none of the players in this story. In fact, I have never been inside the NYSE building and have never had any connection with the financial industry other than as small stock holder. After reading the book, I am kind of glad that I've had no connection. Furthermore, as much as I now admire Mr. Grasso because of this book, I would not want to ever have reported to him. His relentless obsession with the NYSE and his successful job execution make him a "larger than life" figure in the history of the exchange and the exchange, if it has not already done so, should prominently display his portrait with accolades or even a statue with an appropriate positive inscription on its base. His obsession would also have made him an unbearable boss for me, at least that is what my decades of direct experience of bosses leads me to believe.
Mr. Gasparino's book certainly opened my eyes. I believe that anyone whose mind is not already closed on the subject could learn something new about the "life and times of Mr. Grasso at the NYSE," by reading this book. Regardless, for the outsider, this book reveals a great deal about the NYSE and its inner workings. Congratulations Mr. Gasparino on a fine and balanced piece of financial reporting!
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