Ken Langone (head of the NYSE compensation committee) has commented that Grasso's pay really wasn't out of line, considering that (according to the old saying) a seat on the NYSE is a "license to steal."
The comment "license to steal" has been made about other exchanges as well.
License to Steal: The Secret World of Wall Street and the Systematic Plundering of the American Investor (Hardcover)
by Timothy Harper
Publisher: Collins (November 1, 1999)
A friend of mine who owns a seat on the New York Stock Exchange has bragged to me for years that he "has a license to steal."
You know the answer to these questions: The specialist system is enormously lucrative to its constituent members. It is, quite simply, "a license to steal." (Excuse my rhetoric, as even its members live up to the characterization.) Anyone who has put in a market order on the NYSE at one time or another has gotten lousy execution. Sometimes (who knows how frequently?) the specialist is at the other end of the trade — attempting to capitalize on a higher-than-expected price in the case of a buy or a lower-than-expected price in the case of a sale. And most recall the alarming damage to the individual investor perpetrated by the Nasdaq market-making community, which resulted in billions of dollars in fines. Et tu, NYSE specialists?
Of the 23 members of the NYSE board of directors who have as their responsibility the determination of Grasso's compensation, four are specialists and eight are multi-line brokerage firms that have specialists in their business repertoire. Tyco's Dennis Kozlowski taught us that loyalty can be purchased, although the price can be frightfully high. I make the argument that Dick Grasso, like the elected officials in Chinatown, is a purchased pawn of corrupt power brokers whose appetites know no check or balance, of the specialist network that he has attempted to perpetuate. That system now might be subject to more disclosure (and far less profit).
In the movie Chinatown, Jake realizes how impotent he is against the wealthy, depraved Cross. "Forget it, Jake," his old partner tells him. "It's Chinatown."
Or the New York Stock Exchange.
Posted by: William on September 18, 2003 10:25 AM
The NASDAQ system is unfairly rigged against investors!!!!
... Because NASDAQ market makers have a license to steal, that's why ... For those of you who disagree, try tracking a stock which moves ... Or trade on another exchange. ...
misc.invest.stocks - Feb 9 1995, 5:19 am by Fred Wiersma - 45 messages - 19 authors
VWRC hits Wall Street: Barrons
... a novice learns on Wall Street is that specialists have a license to steal. That license was duly conferred on them by the New York Stock Exchange, they paid ...
misc.invest.stocks - Mar 1 1998, 2:05 pm by Max Kennedy - 1 message - 1 author
21 March 2006, New York Post, "Time to Probe the NYSE" by John Crudele:
But these specialists turned into a major profit center for Wall Street firms during the 1990s. And why not?
As the last stop between the public and execution of the trades, specialists had a license to steal.
15 June 2006, New York Post, "Langone's 'License to Steal' Crack Not Too Slick" by John Crudele, pg. 50:
June 15, 2006 -- WHILE being grilled by prosecutors about his friend Dick Grasso, Ken Langone - head of the NYSE compensation committee - had this to say: "There's an old saying, that if you have a seat on the New York Stock Exchange, it's a license to steal.
"I shouldn't say that in front of a prosecutor, but anyway," Langone stammered, according to a record of that deposition.
What a dope!
Banking/Finance/Insurance • (4) Comments • Thursday, June 15, 2006 • Permalink
Nobody can have the license to steal because stealing is wrong whichever way you see it. There are still absolutes!
Would you consider updating the post to reflect recent events?
It’d be great to have updated info of the latest events.
Really great info. I’ve bookmarked it for future reference.