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September 30, 1998

The Showman Who Heads New York Stock Exchange:The Story Behind Richard Grasso's Sharp Edge and Sa

By Jim Cassidy

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When reprimanding subordinates, Richard A. Grasso, the chairman of the New York Stock Exchange, has tried something a tad stronger than a stinging memo or a cutting e-mail, according to people familiar with the chairman of the New York Stock Exchange.

Grasso has dressed down staffers in front of colleagues, uttering sarcastic remarks that are let's say not pretty. The effect is generally stunning, the sources said.

Grasso uses sarcasm like a surgeon using a scalpel without anesthesia. "He's feared by the staff," said one source, who declined to be named.

"Dick is pretty vindictive if you cross him," added another source, who also requested anonymity.

Even so, a hard-nosed attitude may be what's needed to run an institution as large, influential and powerful and with its share of competitive and ego-driven personalities as the Big Board.

A hard-nosed attitude, to be sure, helped Grasso make it to the very top in a cut-throat business. "Dick Grasso is an unassuming-looking Italian without a college degree," said a market veteran and a personal Grasso admirer. "Yet he's also the first person in the history of the exchange to become chairman from the inside. So you've got to recognize that you're dealing with a person with some remarkable properties."

His was no silver-spoon childhood. Home was an apartment in a five-story walkup in a working-class section of Elmhurst, Queens. (Grasso sometimes begins speeches with a joke about the source of his family's wealth: "The oil, rubber and airline industries. My family ran an Exxon station near LaGuardia Airport.")

An early interest in stocks would eventually lead him into fancier neighborhoods. Learning the basics of investing from a pharmacist whom Grasso worked for part-time, he first took the plunge at age 13, plowing $1,000 he'd saved into shares of an airline company (which to this day he coyly refuses to identify).

The first step out of Elmhurst was a two-year stint in the U.S. Army in the mid-1960s, just as the Vietnam War was escalating. Then in April 1968, he took an entry-level job in the listings department at the NYSE.

He thought of it only as an interim gig until the job he was waiting for at a brokerage firm opened up. "I always actually wanted to trade," Grasso was quoted saying in a magazine interview last year.

But Grasso soon took to the exchange life. The most arcane details of the NYSE's operations fascinated him, and he soaked it up. He studied accounting part-time at Pace University in lower Manhattan while working at the Big Board. But he quit before graduating.

"He understood the workings of the exchange and its people," a veteran insider said. In addition to hands-on experience, Grasso had "a very firm grasp on the theory of the structure that the NYSE offers. He's no academic, but he could hold his own."

Undeniably, Grasso has great people skills. "His great asset is his ability to establish instant rapport with wide varieties of constituents," said Chris Keith, the former chief information officer at the Big Board, and now head of Global Trade, a financial software developer based in New York.