King of the Club: Richard Grasso and the Survival of the New York Stock Exchange

A Long Way to the TopRags-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 FellThe 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 PayAs 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," then-Attorney General Eliot Spitzer; and Grasso's eventual humiliating downfall.The End of an EraAlmost 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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