Richard Grasso and
the Survival of the
New York Stock Exchange

By Charles Gasparino, Collins, 400 pp. $27.95

Reviewed by Cecil Johnson

Anyone who expected that the Dick Grasso retirement-compensation conflagration would flame out when the New York State Supreme Court ordered the former chairman of the New York Stock Exchange to give back part of his $188 million retirement package had to have forgotten what Yogi Berra said about when a contest is over.

The Richard Grasso portrayed so vividly by business journalist Charles Gasparino in his new book,

King of the Club

, would never concede that the matter was over until it was over irretrievably. And even then, he would not go gently into the obscurity that engulfs many of the high and celebrated who have plummeted from grace.

Gasparino's narrative conveys the story of a lower-middle-class Italian American from the Jackson Heights area of Queens in New York City, who, after failing the eye examination for the police department, took a job as a backroom listings clerk at the NYSE. Through hard work, dogged determination and Machiavellian machinations, he wound up reigning over "the Club" like an imperial potentate.

There is much to admire about the Richard Grasso served up by Gasparino. His story borders on the classic Horatio Alger model of the person from humble beginnings who achieves fame and riches despite the odds against him. Not only did Grasso lack the credentials of an Ivy League education to open doors for him on Wall Street, but he actually had no degree at all when he commenced his career in the world of high finance.

But Grasso possessed a toughness, a capacity for hard work, and a love for Wall Street's function in the economy and the role of the Club within that context that trumped the advantages some of the privileged brought to the arena.

Richard Grasso's finest hour as CEO of the Club occurred in the immediate aftermath of the terrorist attacks that leveled the World Trade Center towers. Gasparino delivers an engrossing account of Grasso's heroic exertions to revive trading on the exchange in less than a week and to prevent the atrocity from achieving its mission of irreparably damaging the financial markets.

"Grasso never strayed from his theme that the opening of the exchange was one way to defeat the criminals, and how proud he was of the exchange, 'this public-private partnership,' as he called it. Praise for Grasso poured in from everywhere. . . . The New York Times called the repairs a 'Herculean Effort,' " Gasparino writes.

This thoroughgoing picture of Grasso also illuminates his warts - his insatiable thirst for publicity, his fiery temper and bullying management style, his vindictiveness and the venality evidenced in his packing the board of the exchange with corporate cronies who would provide him the overly generous compensation that led to his downfall.

Grasso's blemishes, however, are not the only ones exposed in this warts-aplenty reflection on Wall Street's movers and shakers. Among the others whose flaws show in this critical book are former Nasdaq CEO Frank Zarb, the Home Depot Inc. co-founder Kenneth Langone, former Citigroup Inc. CEO Sanford Weil, Secretary of the Treasury and the Goldman Sachs Group Inc. CEO Henry M. Paulson Jr., and New York Attorney General Eliot Spitzer, a former ally who turned against Grasso over the retirement-pay issue.

Spitzer took the position that Grasso's compensation was way out of line for the CEO of a not-for-profit organization and in violation of the laws of the State of New York. There is widespread agreement with that argument.

Grasso and his supporters maintain that he earned the money. A case can be made that he is owed the money because he did an extraordinary job of keeping the specialist system going at the Club in the face of the stiff competition of the Nasdaq, which featured electronic trading.

Like King Canute, standing at the edge of the sea and trying to hold back the tide, Grasso staved off electronic trading until he was ousted. And with his departure, the specialists lost their bird's nest on the ground.

A reading of

King of the Club

suggests that Grasso saw the inevitable coming and made the decision that led to his firing. Perhaps he decided to collect his retirement money before retiring. Grasso seems to have come to the realization, as did Yogi Berra, that "the future ain't what it used to be."