John Schwall may be a household name — at least, if your household reads the Wall Street Journal or Michael Lewis — but it wasn’t long ago that the co-founder and chief operating officer of disruptive startup IEX was a Stevens student.
That’s a key reason the campus chapter of Phi Beta Lambda invited Schwall, ’95 B.E. Engineering Management and ’98 M.S. Technology Management, to campus for a discussion hosted by Dr. George Calhoun.
Seth Kirschner, corporate liaison for PBL, said Schwall was a desired speaker because of his Stevens background and industry credentials — he has more than 20 years’ experience in the financial industry — and he “captivated and engaged the audience while encouraging participation” in the fireside-style chat.
Dr. Calhoun, director of the undergraduate Quantitative Finance program at the School of Business, introduced Schwall, who is portrayed in Lewis’ “Flash Boys” book as a good soldier concerned with the behavior of some of the biggest players in finance. That sense of injustice is behind the formation of IEX, which essentially created a kind of “speed bump” that eliminates the advantages some institutions have been able to exploit in the market. Those disadvantages are largely due to how quickly technology disrupted finance, leaving regulators playing catch-up with industry.
“We believe everyone should have equal access. No one should be able to pay for a speed advantage relative to another member of the exchange,” Schwall said of IEX. “When we execute an order on behalf of an investor, we try to make sure we know the same price as the fastest market participants, and we don’t knowingly give another member of our exchange an opportunity to react to a routing event until the event is over.”
It might sound as though IEX is trying to rein in the sorts of technologies that enable practices like high-frequency trading, or HFT, but Schwall doesn’t expect that technology to go away — nor does he want it to.
“We’re not against HFT, just against the idea that an exchange would give premium-paying participants an advantage over other members,” he said.
Technology just one component of success
Schwall discussed technology’s sizable and growing role in the finance space, which was welcome to the students in attendance, who were curious about how their traditional and quantitative finance classes prepare them to build careers in this competitive industry. When IEX is hiring, Schwall said, the skills in business, technology, computer science and collaboration that Stevens emphasizes make for attractive candidates.
But it’s not all about technology, he said.
“You don’t have to be the smartest guy in the room, but what you have to be is incredibly hardworking, and incredibly committed to the mission of the company you’re with,” Schwall said. “You want to have some technical aptitude, and you want to be willing and able to take professional risks — to voice your opinion, support it with facts, and at the same time be willing to be considerate and respectful of your peers and superiors, but without being afraid to challenge.”
As a student, Schwall was highly active on campus, including serving as president of the Sigma Phi Epsilon fraternity and the Gear & Triangle and Khoda honor societies. Schwall also served as the Student Council social chairman and was a member of the Stevens Honor Board.
Dr. Calhoun moderated student questions for Schwall, which covered everything from how IEX makes its money to his understanding of how and why technology failed Facebook in its badly flubbed IPO.
“There are a lot of people who claim to be entrepreneurs, but somebody who’s able to make it from true small startup to a company being written up regularly on the front page of the Wall Street Journal, that’s special and a rarity,” Dr. Calhoun said.