Stanley Ross, the London-based Eurobond trader who revolutionized the system that priced debt securities in the 1970s, has died. He was 83.
Ross died at his home in Dunfold, England, on July 23, according to his friend Valerie Thompson. The cause of death is not yet known, she said.
In the late 1970s, Ross was instrumental in breaking the information monopoly that underwriters enjoyed on the pricing of new bonds. By disseminating two-way prices before a note was formally sold, Ross undermined the economics of the business and earned the enmity of new-issue managers, whose profits depended on their ability to hide their bonds’ real performance.
They reacted by attempting to put London-based Ross & Partners out of business by outlawing so-called gray-market trading. The forum they chose to do so was the Association of International Bond Dealers, a trade group Ross had co-founded in 1969. While the attempt failed, it underlined his status as an outsider shaking up the establishment. The organization is now called the International Capital Market Association based in Zurich and London.
“His importance comes from his role in starting the gray market,” said Thompson, a bond trader at Salomon Brothers Inc. in the 1980s. “He was an outsider, he was outspoken. He always felt short-changed by the establishment and its clubbiness. He wasn’t in the club.”
Ross was an equities trader at brokerage Strauss Turnbull & Co. in 1963 when he was asked to make a market in the newly issued Autostrade SpA notes, the first Eurobonds: international securities with untaxed coupons. The new debt market blossomed, as did Ross’s business, which was bigger than the equities side when Ross left the firm in 1967 to set up the Eurobonds business of New York-based Kidder, Peabody & Co.
While at Kidder’s London office, Ross became incensed by the chaos around the settlement of trades, which could take months or even years. He ensured that Kidder threw its weight behind Euroclear, now the world’s biggest settlement system for securities trades, by refusing to deal with anyone who didn’t settle through it.
Ross was a colorful character noted in London’s financial district for his mutton-chop whiskers, a monocle and a newsletter called “The Week in Eurobonds” that he used to proselytize on behalf of the burgeoning market. The newsletter showed “we simply find it impossible to take life, and indeed ourselves, seriously all the time,” he told Kidder stockholders in 1977. “What dull people we would all become if we did.”
“Stanley was the one who turned up in the Porsche or the on the boat,” said Willy Dunn, a colleague of Ross’s from Strauss Turnbull. “He had style.” Ross sold his boat, “Highland Beauty,” about a year ago because it was getting too much for him, according to Thompson.
Ross was ousted from Kidder in 1978 amid a row over commissions that pitted him against rising star Hans-Joerg Rudloff, and left to set up Ross & Partners. Rudloff retired as chairman of London-based Barclays Plc’s investment bank in February. Ross & Partners was sold to Drexel Burnham Lambert Inc. in 1983 over Ross’s objections and he quit.
In 1984, he resurfaced at Deutsche Bank AG, where he stayed until 1991. While he became the first non-German to join the Frankfurt-based lender’s executive committee, he didn’t like the culture.
“One guy took on the banking system,” said Dunn. “You couldn’t do it today.”
When he left Deutsche Bank, Ross became interested in anti-European Union politics, helping to raise funds first for the Referendum Party, more recently for Nigel Farage’s U.K. Independence Party, whose national conference he was planning to attend in September, according to Dunn.
Stanley Donald Lyn Ross was born on Nov. 20, 1930, into a working-class family in London. Ross left school at 15 and began working in London’s financial district in the 1950s.
He is survived by his second wife, Jackie; a daughter, Victoria; and a son, Adam, from his first marriage.