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May 31, 2004

A Hippie's Triumph

By Ingrid Eisenstadter

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From disco to Reg NMS, one CEO took a most unusual journey on his way to the top.

A 1970s hippie leading an upstart market has been a thorn in the side of Nasdaq. David Colker is president and chief executive officer of the National Stock Exchange (NSX), which has taken away lots of business from Nasdaq and other competitors. The NSX, once known as the Cincinnati Stock Exchange, has bothered Nasdaq officials so much that some of them a few years ago quietly suggested that the new kid on the block could be a compliance nightmare.

The Chicago-based NSX, by one measure, is now ranked the third largest exchange in the country, having passed the American Stock Exchange in 2002. NSX's growth has been dramatic. In 1995, it was recording some 10 million shares daily. Today, that number is about 650 million shares. Much of this increase has come at the expense of Nasdaq.

An example of Colker's battle with Nasdaq came recently with his SEC testimony. In speaking about Regulation NMS, he effectively defended his turf and the big bite the NSX has succeeded in taking out of the Nasdaq.

Colker is armed for his work with a law degree and an undergraduate finance degree from the University of Virginia. However, to understand Colker's success, one must venture back to the disco decade.

"I am an old hippie," Colker says. "I did the 70s thing." That's how the CEO of the NSX explains the interval between the time he entered college and the time he finally graduated which was, well, 14 years.

During much of that time he was in full regalia with bellbottom jeans, VW Microbus, beard and a dog named Lucy. "I was 29 when I got my Bachelor's," he says today with old-hippie pride and lots of laughter. During the decade-long interval, when he was a dropout and living in a Cape Cod cottage, he says that "I had 10 jobs in 10 years." He worked as a carpenter, at a local newspaper, in an orphanage, and, for a time, with autistic children. He also spent a year managing a mom and pop grocery store called Stapat.

Flower Power

Today, Colker can no longer remember what salary he made back in the glory days of flower power, but "I do remember getting a raise of 25 cents an hour and I thought it was a lot." He still recalls his favorite Stapat customer, John Kelly, the legendary Boston Marathon runner who finished 58 out of 68 of the annual races, running well into his old age.

"Kelly was in his 60s then and had the body of a 35-year-old," Colker recalls. And he provides some insider info into Kelly's longevity and good health: "He bought a case of wine a month."

Actually, though, Colker had not totally given up on his education during the decade that passed between his junior and senior college years. He spent a year studying at the United Technical Institute in Springfield, Mass. When he graduated - in auto mechanics - his first post-secondary degree was something called a Certificate of Completion.