The 1950s saw, that, under the leadership of Lewis, the origination of block trading which, by the next decade, was the only option of survival for most of the Wall Street. Before the SEC’s Security Act amendments became fully effective in 1975, Bear Stearns was among the few companies that benefitted to greater extents.
Bear Stearns soon developed reputation of being the frontrunner by beginning to expand retail business operations in the late 1960s. The company extended its operations to facilitating the management of investments for individuals, businessmen and corporate investors, as well ultimately laying foundations for margin operations, the company’s successful new area of business. Margin trading allows for brokerage houses to loan their clients’ securities to short sellers, while comparing funds with their own capital and using the entire amount to finance trade, paying interest on the amount loaned.
1975 proved to be another pinnacle for Bear Stearns, when it invested $ 10 million inNew York’s securities, to save the city from bankruptcy. Although the risk was very high when compared against the losses amounting to millions of dollars, the company eventually came off as a winner placing stakes on this dark horse.
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