WALL STREET’S LAST GREAT PARTY BOY
like characters, unprecedented greed, and an attitude of impunity. Big commission dollars brought big expense accounts and there was no limit to the way brokers treated hedge fund traders. The entertainment was only limited to the imagination. And it was all paid for by commission dollars. With $50 million in commissions to give out over the year, I was very popular. And I had plenty of new best friends. That is, that’s how it used to be. From Blow to Bagels In hindsight, one seminal event shifted the landscape of wining and dining forever... It was a 2003 outsized bachelor party that owns a permanent place in Wall Street lore. It was rumored to have dwarf tossing and cost $160,000, which was allegedly paid for by sell-side firms courting a Fidelity trader. And it was partly the reason Fidelity was fined $8 million dollars by the U.S. Securities and Exchange Commission. And although the change wasn’t instantaneous, the bad press marked the transformation of gift-giving rules on Wall Street. From that moment forward larger and more conservative institutions started putting rules and limits in place on how a client could be entertained. Before the bachelor party, many sell-side managers were fully complicit. And in some cases, sales traders were incentivized or even required to do as much entertaining as they could. But after the bachelor party, the corporate card-carrying game took a left
The first five years of Brad’s career, he worked at a bulge bracket firm. He was armed with some of the best research, banking, and capital on the Street. He also had a generous corporate card that was rarely scrutinized. It was easy to do business. Then in the late 90s, he traded all of that in to work at a direct payout shop... a brokerage firm that pays sales traders an exact percentage of their commissions. At the time, small sell- side shops would pay someone 40%-50% for every dollar they brought in. Brad’s timing was sublime. It coincided with both the technology boom and the emergence of hedge funds. It was an era where hedge funds would quickly rise to a $2 trillion dollar plus industry, the remuneration for hedge fund managers soared into the billions, and sales traders saw their own wealth grow beyond imagination. Personally, I was on the other side of some of Brad’s early trades. I had millions and millions of unsupervised commission dollars to hand out. I flew over traffic jams in private helicopters to the Hamptons and Atlantic City. I sat in 50-yard-line seats at the Super Bowl and right behind the dugout at Yankee playoff games. A broker and I once went to a World Series game with eight tickets in our pockets. We used the six extra ones to go outside to smoke because of the stadium’s “no reentry” policy. Each cigarette cost us $2,000. The nights were filled with secretive, Gatsby-
20 | July 2017
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