Word: haack
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THAT Wall Street must undergo fundamental reforms if it is to survive as the securities-trading capital is almost universally accepted. Woe to him, however, who tries to translate broad truism into specific truth. Robert Haack, president of the New York Stock Exchange, discovered the danger last week when he proposed some basic revisions in exchange rules. Though some members supported him, many reacted as if he were ordering tumbrels to convey them to the guillotine. Among the insults flung at him were "panderer," "out of his mind" and "he makes me sick." Bernard Lasker, chairman of the N.Y.S.E. board...
...Haack had suggested the eventual scrapping of one of the Big Board's most cherished principles: that all member brokers must charge the same commissions on stock trades. The rule originated in 1792, when 24 brokers met under a buttonwood tree in downtown Manhattan to found the organization that later became the exchange. They agreed, among other things, not to try to undercut one another's commission rates. Ever since, the fixed-commission system has been generally viewed as essential to the Big Board's existence...
Chicanery Problem. Haack in the past has voiced that sentiment himself, but last week he argued that the fixed-commission system loses business for the exchange and its members. Unable to get discounts on the Big Board, mutual funds, pension funds and other institutional investors are channeling a growing share of their business to regional exchanges and the so-called third market, where brokers arrange private trades of listed stocks. Some 20% of all trading in N.Y.S.E.-listed stocks, and 35% to 45% of the large-block trades (10,000 shares or more), now take place away from the exchange...
...help customers of ten brokerages that earlier tumbled into insolvency. On Tuesday, the exchange's governors and representatives of 20 of the richest investment houses were summoned, on an hour's notice, to an emergency meeting in the exchange's dark-paneled board room. President Robert Haack told them they had to come up with some salvage plan or face a major crisis. By process of elimination, Merrill Lynch, Pierce, Fenner & Smith, by far the biggest U.S. brokerage, was selected as savior. Clifford Michel, managing partner of Loeb, Rhoades, explains: "One strong, viable firm had to take...
...exchange's quarterly report, Haack noted the upturn in stock trading volume and said that those brokerage firms that have pared personnel and operations selectively "will enjoy a distinct advantage over their competitors when it comes to handling a resurgence of business." His message: companies that have zealously hacked off not only fat but also bone and muscle will feel the pain as business gets better...