Word: casey
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Dead Center. Casey's activism is popular partly because it comes at a crucial moment for the securities industry. Brokerage firms are staggering under rising costs and mountainous paperwork; 129 houses have been forced into liquidation or merger. Large money-managing institutions like mutual funds and insurance companies are seeking membership on the New York and American stock exchanges in order to save on brokerage commissions. Because of antitrust prodding by the Justice Department, negotiated commission rates will almost surely have to be extended to cover trades of less than $500,000. Regional stock exchanges and the "third market...
Faced by such problems, brokers who once feared SEC supervision are now looking to the agency for leadership. "The feeling around here is that we've been on dead center too long and that Casey will get things moving," says William Salomon. "Even if he makes unpopular decisions, the mere fact that he is taking affirmative action will make most of us support...
...will it really, though? Much of Casey's popularity stems from the fact that no one yet knows where he stands on the big issues. His reforms so far have been needed and overdue, but relatively uncontroversial. His hearings seem designed largely to give him a quick education in Wall Street's problems. Many of the same difficulties are being investigated separately by Senate and House committees; Casey denies that the SEC hearings are intended to beat Congress to the punch, but with characteristic alacrity he has promised to have a full set of conclusions and recommendations ready...
Divided Street. When they are released, it is hard to see how Casey's honeymoon with all of Wall Street can continue for very long. At the moment securities men believe that Casey is inclined to give them what they want, and he does not dispute that. "I'm certainly not unfriendly to Wall Street," he says. "My purpose is to see that Wall Street serves the public interest. I can induce them into taking action, but I cannot do that if I come screaming at them...
Wall Street, however, cannot agree on what it wants; Casey's hearings have disclosed bitter division on all the large issues. Major brokerage firms like Merrill Lynch, for example, would like to see negotiated commissions rather than fixed rates on almost all stock trades, so that they could compete more effectively with the rates arrived at by bargaining between investors and brokers who are not members of large stock exchanges. Smaller brokers fear that the resulting commission cutting would bring about a catastrophic loss of revenue. For the moment, each side can hope that the SEC chairman will decide...