In the 1980s, Wall Street was a bastion of tradition, where everyone adhered to the establishment’s rules. The large brokerage houses, often under the sway of “old” money, wielded unchallenged power. Any attempt to operate outside this system faced stiff resistance, even from government entities tasked with overseeing America’s burgeoning financial markets.

Sheldon Maschler, however, grew frustrated with the status quo early on. Drawing from his experiences as a child in war-torn Europe and later on the streets of Brooklyn, he refused to passively accept Wall Street’s self-serving and inefficient system.

The technical inefficiencies in the market allowed many brokers to charge exorbitant commissions, maintain artificially high spreads, and reap enormous profits at the expense of their customers. Sheldon saw these practices as opportunities to revolutionise trading, making it more efficient and attractive to investors.

When he founded Datek and, later The Island ECN, Sheldon not only democratised access to the markets by offering low-cost investing to the masses, but he also exposed the market makers by forcing them to honour their quotes, thus rendering their inflated spreads meaningless. One of his significant innovations was the adoption of the Small Order Execution System (SOES), which expedited trading and reduced costs. This move faced resistance from the Wall Street establishment and even the SEC.

The Island ECN further challenged the status quo by advocating for a shift from the archaic practice of fractional listing reporting to a decimal system. This change improved efficiency and reduced the spreads that traditional brokers relied on for unfair profits.

Confident in the merits of his innovative recommendations and businesses, Sheldon was not one to be coerced. SOES and the equitable rules it introduced, along with universal access to the equities markets, became overwhelmingly successful, fundamentally transforming Wall Street’s outdated approach to serving its customers.

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