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John Turney
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Foreign Exchange Infrastructure: Yesterday, Today and Tomorrow

In this exclusive to Traders Magazine, John Turney, Global Head of Outsourced FX at Northern Trust, discusses the evolution of the fx infrastructure and what is to come.

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June 2, 2009

After Blowup Comes Happy Ending

Stanford's Demise is Concept Capital's Good Fortune

By Michael Scotti

Also in this article

In early March, the picture didn't look promising for Rich Parker and his veteran equity sales and trading team. Only weeks earlier, they had experienced the shock of their lives when regulators shuttered their firm, the Stanford Group Co., and put it into receivership.

Rich Parker

Parker's group of nearly 40 pros found themselves out of work after financial irregularities, estimated in the billions, were uncovered in a separate part of the firm-far from the Stanford equity trading desk. The scope of the event generated headlines around the globe and came only months after the news of Bernard L. Madoff's fraud.

The desk could blame its predicament on a bad break, but there was little consolation once the team members were out on the street, looking for work at a time when the major stock indices had just touched a 12-year low, Parker said. "There were some difficult days walking around New York, when markets were down big, and I was still asking myself, 'What just happened to us?'"

Tough Assignment

Parker knew he had his work cut out for him. It's not exactly a bull market for unemployed traders, sales traders and research salesmen these days, and here he was trying to place an entire team-a tough assignment even in the best of times.

His ace in the hole, however, was an in-house research product: the Washington Research Group, co-founded by Ed Garlich. WRG, which Stanford bought in late 2004, had carved out a healthy niche during more than 30 years of offering institutional research on public policy. And how policy from Washington affects stocks and markets these days is hot, as the federal government leads the bailout of financial institutions and pushes to stimulate the economy with increased spending. There's a lot of money floating around the nation's capital these days, and investors want the inside story on what it means to them.

"Customers wanted to get the product," Parker said. "We had been working on the first hundred days, which was very well received, when the rug got pulled out from under us. It couldn't have been worse timing, and we needed to get back into seats right away."

Parker and WRG shared a long association. He had already built the product earlier this decade when he worked at Schwab Soundview. He then did it a second time at Stanford Group. There, he helped turn the research sales and trading effort into a $38 million business in 2008, say two knowledgeable sources.

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