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Tim Quast
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We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

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February 1, 2002

Guarding The Last Nazi: Why World War II is more than dry and distant history for one senior tradin

By Sanford Wexler

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  • Guarding The Last Nazi: Why World War II is more than dry and distant history for one senior tradin

It is one trader's part in a great historical drama and he will likely never forget it.

Fred Graboyes, 39, is managing director and head of quantitative equity trading at BNY ESI, the agency brokerage subsidiary of the Bank of New York.

But Graboyes, in another life, was actually a jailer. He once commanded the U.S. Army contingent that guarded the infamous Nazi war criminal, Rudolph Hess, at Spandau prison in Berlin, Germany.

After graduating in the top quarter of his class from the United States Military Academy at West Point in 1984. He later commanded a company for three years in the 101st Airborne Division in West Berlin. Then for the next two years he was with the famed 82nd Airborne Division at Fort Bragg in Fayeville, N.C.

Patriotism

Graboyes pursued a career in the U.S. military to satisfy his strong sense of patriotism. "I wanted to do something for my country," Graboyes said. "I chose the infantry after graduating. You have to keep in mind that most soldiers are not itching for a fight. But when you are called, you have to do the job."

Graboyes soon found out what service meant. "The military gives you a tremendous amount of responsibility at a young age," he said. And it's experience he uses on the trading desk. "Today, in the trading world I apply many of the leadership skills I performed in the military - leading military troops on a complicated mission is a good example," he said.

"If I am telling my soldiers to charge up a hill, I better be leading them up that hill," Graboyes said. "Similarly, if I don't know how to trade in the marketplace, the traders under me will not respect what I ask them to do."

In the summer of 1985, Graboyes, then a 23-year-old lieutenant, was selected by the U.S. Army to oversee guarding the last living, top-level Nazi war criminal, Rudolph Hess, for a period of one month. (The four World War II Allies - the U.S., the United Kingdom, France, and the then Soviet Union - rotated guarding Hess on a monthly basis.) "It was a great honor to be chosen to represent the Americans at Spandau," Graboyes said.

Graboyes and his some 100 troops spent about a month in training for guarding Hess. "It [the training] was mostly focused on the changing of the guard ceremonies and how we would handle guard shifts and guard duty at the prison," he said.

These ceremonies were not public. "They [the ceremonies] were only attended by senior American and Soviet officials," Graboyes said. "At the time, Spandau was the only place in the world where the American and Soviet armies interfaced with each other. Everywhere else there was a standoff across a wall or some territory."

American military personnel at Spandau were fully equipped with a slew of high-powered weapons. "We had machines guns, grenades, rocket launchers, and even anti-tank missiles. We had full combat weaponry for an infantry platoon," Graboyes said. "The fear was that some group would try to wage an escape for Hess."