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During the middle of 1945 it wasn't unusual for members
of the Combat Engineer Battalion (CEB) to be involved in the liberation of concentration camps. At 21 years of age, Donald Stone was at the Battle of the Bulge as a member 1263rd
CEB and eventually went through three of those horrific camps. Stone passed away at the age of 92 on May 20th. Stone started his career on
Wall Street trading bonds at Asiel & Company, did a stint on NYSE's floor as a $2 broker, worked for E.H. Stern on the floor and ended up as the Senior Partner of the Specialist firm of Lasker, Stone & Stern
(LSS). In Stone's own words, "I decided if I joined E.H. Stern & Company, which they asked me to do, my contribution will be what I make as a Specialist, that's how I can help. I knew Eddie Stern, I think he
was the richest and best trader on the Exchange. He had capital, and that was vitally important to my being a Specialist. They didn't ask me for capital…When Eddie Stern died [Bernard] Bunny Lasker and I changed the
name of the firm to Lasker, Stone & Stern…" Eventually, when Merrill Lynch bought LSS, Stone would become Chairman and Chief Executive of Merrill Lynch Specialists, which made markets in 100 stocks.
As to LSS, it was headed by Bernard Lasker, a former arbitrage legend and NYSE chairman. The company had three divisions, a proprietary arbitrage desk, a commission based brokerage and the Specialist operation that made
markets on NYSE's floor in 42 listed companies. LSS made markets in its assigned stocks at Post 8 in the Main Room. In 1989 Lasker retired and Stone took over the Specialist unit while Vincent Farina took over the
brokerage operation. Stone could often be seen at the famed NYSE Luncheon Club located on the 7th floor of the Exchange. For Stone's part, he was born in 1924, graduated from Deerfield Academy and
Williams College, before enlisting in the US Army. He married Jean Lawson in 1950. He and Jean had three children. According to his official obituary, "During his tenure on the Exchange, Don witnessed dramatic
moments and profound change. He began his career when trades were recorded on the ticker tape and he helped the Exchange gradually move to electronic trading. He recalled the panic of the floor when President John
Kennedy was assassinated in 1963. By far the most traumatic moment in his career was 1987's "Black Monday," the largest one-day market crash in history. He told The New York Times, 'I was in combat during
World War II and the feeling you had in your stomach was the same as when you were under fire, except you didn't risk your life, just all your assets.' Don played a pivotal role in stabilizing the market that day."
I was first introduced to Stone in Oct. of 1985, at Post 8, by floor broker Bobby Guarnino of Wedbush, Noble Cooke. He was polished, as most senior partners of Specialist firms were, with a nice
smile as he invited me to take a look and how the trading post operated. Every stock on the floor is assigned to a Specialist at a specific post. At the time there were 14 trading posts with many stations around the
posts where Specialists were assigned. Stone took time to show me how orders were filled and how the then paper book with limit orders worked. This was my first time on the floor and one of the most memorable.
Stone supported many philanthropic causes and served on a number of boards. As vice-chair of NYSE's board he loved to tour people on the floor of the Exchange. One notable was Elizabeth Taylor. William
Johnston, past NYSE president and a Specialist himself, put it this way to me this week, "Stone was a class act, terrific specialist and a good friend of Jim Jacobson," who was the Vice Chairman of the
Exchange after Stone. Former NYSE Chairman and CEO, Dick Grasso, weighed in on this column with the following, "Donnie was a special friend and important influence on my career. He served as a Senior Trading Floor
Governor for 27 years and a Director of the Exchange for 12 years 11 of which as Vice Chairman. He defined Excellence, Integrity and Professionalism as a Specialist and served as a role model to all on the Exchange
Floor. As a member of the SEC's National Market Advisory Board he helped guide the implementation of the Securities Act Amendments of 1975 the first major rewrite of the Acts of 1933 and 1934 creating the modern
equities market structure. He was a driving force in bringing technology to the Exchange Trading Floor. All who were privileged to know Donnie are better for his friendship and counsel."
There you have, it doesn't get any better—right there on the corner at 11 Wall Street. Quote of the Week: The Exchange was the envy of all other exchanges around the world. It had credibility; it was
an honor to be listed on the New York Stock Exchange. You had to meet criteria that no one else had to meet, and there still must be a feeling that the Exchange has credibility or no one would pay listing fees to be
there.—Donald Stone |
