This past Wednesday, the Stevens chapter of Phi Beta Lambda (PBL) offered faculty and students the opportunity to hear John Schwall, Chief Operation Officer of Investors’ Exchange, speak about his experiences in the finance world.
David Inga, Vice President of PBL, gave a quick introduction and soon gave Schwall the floor. Schwall graduated from Stevens in 1995, receiving a Bachelor’s Degree in Engineering Management and a Masters in Technology Management. He had come from a family of “humble beginnings,” raised in Staten Island family of several-generation firemen. Schwall had a rough beginning at Stevens, but eventually found something more of his “own speed.” By his senior year, he was the president of Gear and Triangle, served on the Honor Board, and was the president of the Kappa Sigma Fraternity.
Schwall did not anticipate entering financial services for he had initially entered Stevens with the intent of receiving a degree in engineering. He commented that he is “always surprised to see the number of engineer majors ending up in financial services.”
After receiving his master’s, Schwall began his first job as a Project Manager at Pershing, a company that specialized in transaction-based financial systems. After three years, he spent two years at Grant Thorton LLP as a supervising consultant before moving onto Bank of America.
Schwall’s time spent at Bank of America gave him insight regarding the financial world. As a senior technology manager, he envisioned and managed the development and implementation of a “proprietary payments application for use across multiple lines of business.” Schwall recognized that there were many different types of students in the room, and did his best to describe the complex financial terms and concepts in an understandable way: “Essentially, I didn’t want this system to be restricted to payment. I wanted it to be a multi-use system.”
Bank of America soon purchased Merrill Lynch, a banking company that helped “take the Equities Division of Bank of America global overnight,” according to Schwall. He also has served as a director in direct market access technology and transaction cost analysis, but soon felt that the company was moving in a different direction. At this time, Brad Katsuyama, founder and President of IEX, was taking over the electronic trading division at RBC Capital Markets and wanted Schwall on his team.
Working closely with Katsuyama, Schwall found himself in the position to take a risk and start a new business that would represent investors with the goal of making the playing field for trading fairer. Schwall knew he was taking a big risk. “I was 42 with a wife and two young kids,” Schwall explained, “I wasn’t fresh out of college, where working 20 hours a day isn’t abnormal.” Katsuyama and Schwall left RBC and began building IEX from the ground up.
IEX is now on the forefront of the financial world, having been recognized by major investor groups. IEX rise to fame can be traced back to the publication of Michael Lewis’ Flashboys, a non-fiction book that focuses on the rise of high-frequency trading, which was released in March 2014. The book centers on Katsuyama and his team.
Schwall stated that IEX is now trying to become an official, regulated exchange in the United States. With that, IEX is going to need more team members to make that vision a reality. “We have a preference for engineers, and we’re actually looking for an intern for the summer,” Schwall informed the audience.
Schwall attributes his success to hard work and focus. He advised the students in the audience to “do what is best of your company, not what is best of your manager. Make a statement of how principal-oriented you are.”
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