10 Questions for Grant Callery
EVP and General Counsel, NASD
by Mary Westbrook, for Bisnow on Business
It’s not business as usual lately at NASD (formerly the National Association of Securities Dealers). But, then again, it never is, says T. Grant Callery, the EVP and General Counsel of NASD, which regulates all securities firms that conduct transactions with the public. Boasting $600 million in annual revenue, the group has a long history of defying categorization. It’s an association, technically, but its membership isn’t voluntary. It’s a private organization, sure, but it also has government-like functions, including the ability to discipline and tax its members. Another quirk?
“Since our members – the brokerage industry – fund us, the industry that we regulate essentially pays for the regulation,” explains Callery (Georgetown Law School ’73), a native of suburban New York City.
The group’s known for other roles, too, such as creating NASDAQ in the ‘70s and acquiring the American Stock Exchange in the ‘90s. Those roles have been at the center of current events, as NASD in the past five years has made a broad shift to get out of the markets operation business.
All that activity combines to create an eclectic practice within NASD, where the GC function is divided into two offices – corporate counsel, headed by Callery, and regulatory policy, headed by Marc Menchel. Combined, the offices have about 35 lawyers, but that’s just the tip of the proverbial iceberg. More than 300 of the 2,500 employees at NASD have passed the bar as a pre-requisite for employment, creating the opposite of an “us versus them” mentality between the group’s leadership and counsel, Callery says.
Why did NASD get out of NASDAQ and the American Stock Exchange and how did those divestures change your job?
We decided that our involvement there created a conflict of interest. So we got out. That created legal work that was of a very different nature. Initially, we needed transactional expertise; now we’re combining our regulatory functions with member-regulatory functions of the New York Stock Exchange, the other principal self-regulator in the US. The proxy contest ended with a special meeting of members on January 19. The proposal was adopted by a significant margin.
Did you have to bring in additional lawyers for the two transactions or did you already have the people in-house?
We augmented our internal staff by the use of outside counsel—transactional attorneys from Shearman & Sterling in Delaware, corporate experts from Richards Layton & Finger in Wilmington, and tax counsel from Davis Polk in New York.
What other unique kinds of law does your office need?
Probably the most unique thing revolves around being a broker-dealer regulator. Day to day, most of the unique areas we face relate to the regulatory policy group more than my corporate counsel group, but a basic knowledge of securities laws and securities regulations helps our lawyers understand our clients.
When do you use outside counsel?
In-house, we do the commercial, employment and litigation work, and all of the work that relates to governance and our board of governors. We look outside on the litigation side, often to the DC office of Gibson Dunn & Crutcher, if we have a case that’s going to go to trial and will be intensive in discovery.
You joined the staff of the NASD General Counsel’s Office in 1979 after five years in private practice at a small firm in DC. Were you ever tempted to leave, to try something new?
From time to time, but I have no burning desire to go back to a law firm, and I want to stay in Washington. Sometimes, I aspire to be a photographer, but I don’t know that I could put food on the table with that.
How has the in-house counsel situation changed since ‘79?
When I came, there were seven lawyers. Now, there are 35. The work and the organization have become more sophisticated, and that’s changed how we work. Before, everyone was somewhat of a generalist. Today, we’re able to bring in a lot of talent in various areas, including commercial and IP work and in the litigation area.
Is it ever frustrating not to specialize more?
Every once in a while you think, “Gee, I used to be more of a subject matter expert, on this or that,” but you pass that role to other people. It’s an evolution. I don’t regret not being the world’s greatest expert on some particular thing, no.
What lessons have you learned about being a general counsel you wish others had told you about when you started?
Take up photography. (Laughs.) At the end of the day, being a GC is, to a large degree, about having good people who work with you and making judgment calls that are more right than wrong.
Do you recommend an open door policy, or is that an invitation to get diverted and never get any work done?
Well my door’s open right now. I have generally found it doesn’t distract from your day. Then again, I’ve also always had uncomfortable chairs in my office that people accuse me of using to keep meetings short.
What does the T stand for in your name?
Thomas. My father was Thomas. My parents didn’t want two Thomases in the house and they didn’t want a Tommy. So, I’ve always used Grant. :)
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