By Jim Toes, STA
Most companies and organizations have a motto – something that serves as a guiding principle for their members and employees while also providing a succinct description of their priorities and brand. For STA, it’s Dictum Meum Pactum, which is Latin for “My Word Is My Bond.”
This honorable principle dates back to a time when traders would consummate transactions with a verbal commitment to buy or sell a particular security at an agreed upon price. There were no witnesses to or tape recordings of the agreement, nor were there paper or electronic trails – just a promise. Imagine walking into an open house and agreeing on a price with the seller, with no lawyers, banks, title insurers or home engineers involved. For many years, this was how trading was done in our industry – and it worked.
As our markets have evolved and become more electronic, machines have displaced certain human functions with incredible efficiencies and speed. But that does not mean that STA will be looking for a new motto.
Last week, a jury cleared a former trader of fraud over lies they told to counterparties, rejecting the SEC’s theory that traders must adhere strictly to factual statements. Now, I have no knowledge of the facts surrounding this case, nor the reasons for the court’s decision. I also don’t know the former trader in question, so I cannot attest to their character or actions one way or the other. I do know, however, that at some point I will find myself in a conversation on this story, and I may struggle if asked, “So, Jim, did you ever lie when you traded?”
In all seriousness, our industry still very much relies on trust, and that is something that cannot coexist alongside nefarious behaviors. Bad actors who distort the truth and make misrepresentations to their counterparties must be treated accordingly. A career upon lying will not last long, because the individual will never form the relationships needed for a successful career in financial services.
This idea is bigger than any one person – our industry could not exist either if it were built on systemic lies either. How could any firm survive, let alone thrive, if its counterparties continuously fell down on promises made? It could not. Firms rely on other firms to fulfill their promises.
Integrity is essential in every industry, but for securities professionals, who play a role in helping citizens grow their assets and safeguard their livelihoods, the stakes are even higher. Over the course of their careers, many traders will come across opportunities for personal gain at the expense of their clients and counterparties. Our vision is for an industry in which every one of these opportunities is rejected – not because of regulatory rules or firm policies, but because of the traders’ own consciences.
So, “My Word Is My Bond” still carries meaning today. It is not a slogan, like Nike’s “Just Do It,” but remains a guiding principle to encourage and cheer on those who strive to do the right thing as often as they can, especially when it is hardest to do so.
“When enough people make false promises, words stop meaning anything. Then there are no more answers – only better and better lies.”
– Jon Snow, Game of Thrones