President and CEO ● HedgeSpeed Technology ● New York ● Securities Lending Legend ●
John DiRocco is no newcomer to securities lending. He has long been recognized for his pioneering work in making securities lending the big business it is today. It’s not only his long and impressive resume that makes him without peer in the securities lending industry-but also, quite possibly, the fact that the smoking room in his Connecticut home was featured in Cigar Aﬁcionado magazine.
Over his 30 years in the industry, DiRocco has seen securities lending move from an often-forgotten back-ofﬁce chore to a front-ofﬁce money maker-a move he steered as much as anyone else. He started at the back ofﬁce at Prudential Insurance and soon moved securities lending to the forefront. He went to Shearson Lehman in 1987 to create its non-dollar securities lending operation before making another leap, to hedge funds. In the 1990s, he founded, with Michael Hiard and ﬁnanced by Paloma Partners, London Global Securities, the hugely successful stock loan intermediary, before moving to the Connecticut-based hedge fund Citadel Investment Group.
A more crowded ﬁeld once the competition copied the London Global Securities model hasn’t scared DiRocco away from new ideas and challenges; today he’s at the helm of HedgeSpeed Technology, a provider of middle- and back-ofﬁce software and consulting for hedge funds.
Although DiRocco has long seen through the opaqueness of securities lending, he doesn’t think the current regulatory upheavals will bring more transparency to the fee structure-in fact, quite the opposite. “I don’t think the regulators care what you pay,” he says. “They care what is being shorted, but not what is being charged.” Perhaps securities lending will never get any less murky, but DiRocco will still see right through the haze-cigar smoke and all.