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Ten to Watch 2010-2011: Where Are They Now?

An update on last year's Ten To Watch.

MICHAEL BARR, Department of the Treasury's Assistant Secretary for Financial Institutions

LAST YEAR'S CHALLENGE: Barr was busy last year developing and coordinating financial regulatory reform policies and convincing lawmakers to pass them.

HOW HE'S DOING: Barr played a central role in the administration's push for financial reform. Though brokers are not required to adhere to the fiduciary standard under the new law, it is more pro-fiduciary than many expected.

DAVID ELLISON, President, FBR Advisors

LAST YEAR'S CHALLENGE: The longtime manager of FBR Small Cap Financial Fund dodged trouble in 2008 by shifting most of his assets to cash. Last year he said that the worst was over. Ellison said that financial stocks would rally for the next three to five years.

HOW HE'S DOING: After loading up on bank stocks near the market bottom, Ellison scored big gains. This year through July 8, his fund returned 37.5 percent, outdoing 94 percent of his competitors. Ellison remains bullish on the sector.

JEREMY GRANTHAM, Chairman, Co-Founder, Grantham Mayo Van Otterloo (GMO)

LAST YEAR'S CHALLENGE: Grantham is known for sniffing out bubbles. Last year, he inveighed against the efficient market theory, and estimates that fair value of the S&P 500 is around 800 or 900.

HOW HE'S DOING: Grantham is still bearish and is railing against central bankers for easy money policies that he believes will inflate another bubble.

ROBERT KHUZAMI, Director of Enforcement, SEC

LAST YEAR'S CHALLENGE: After blowing it with the Madoff mess, the SEC had to restore public confidence in its ability to regulate. Khuzami had to show he could catch the next Madoff.

HOW HE'S DOING: Khuzami, a man who used to prosecute terrorists, is now ferociously going after misbehaving firms on Wall Street. But his recent $550 million settlement with Goldman was considered a win for both the SEC — and for Goldman.

ANDY SAPERSTEIN, Managing Director and Head of Wealth Management, Morgan Stanley Smith Barney

LAST YEAR'S CHALLENGE: To preside over the smooth integration of Morgan Stanley and Smith Barney, creating the biggest retail brokerage in the business.

HOW HE'S DOING: Saperstein and his team have unified compensation and the pricing of products and accounts between the two firms. “We did all this without stampeding the herd,” says a source, with MSSB able to maintain a stable FA headcount of 18,000 or so. Next is integrating the new FA tech platform.

DAN SONTAG, head of Americas Client Relationship Group, Global Wealth Management, Merrill Lynch

LAST YEAR'S CHALLENGE: Sontag, a lifelong Merrill man and former broker, took the reins of Merrill's thundering herd from Bob McCann when McCann quit in January of 2009. He seemed like the right choice to oversee the integration between BofA and Merrill.

HOW HE'S DOING: Sontag made his exit just as this magazine was landing on your desk last August. He retired, saying his “whole heart” wasn't in the job after he was passed over for the head global wealth and investment management, which went to Sallie Krawcheck.

FRANK SORTINO, Professor of Finance, San Francisco State University; CIO, Sortino Investment Advisors.

LAST YEAR'S CHALLENGE: His firm, Sortino Investment Advisors, has been collaborating with leading researchers and academics trying to develop tools to better manage downside risk.

HOW HE'S DOING: Sortino is now running True Path funds, managed accounts and sub-advising for Fiserv, Morgan Stanley Smith Barney, and other institutions.

ELIZABETH WARREN, Chairwoman of the Congressional TARP Oversight Panel

LAST YEAR'S CHALLENGE: To make sure big banks make good on their TARP loans and see that the creation of a consumer financial protection agency was included in Wall Street reform.

HOW SHE'S DOING: The TARP program has been lauded as largely successful. Warren is the most likely candidate to head the Consumer Financial Protection Bureau, a centerpiece of the financial reform law.


LAST YEAR'S CHALLENGE: Persuading top wirehouse FAs to join HighTower, an RIA/broker-dealer backed by significant venture capital.

HOW HE'S DOING: Client assets have risen from $15 billion to more than $16 billion, driven partly by the recruiting of two Morgan Stanley Smith Barney teams. A second round of VC financing contributed $100 million to HighTower's balance sheet in December, on top of $65 million raised in 2008.

MEREDITH WHITNEY, CEO, Meredith Whitney Advisory Group, LLC

LAST YEAR'S CHALLENGE: Proving her landmark 2007 call questioning Citigroup's capital position was more than a one-hit wonder.

HOW SHE'S DOING: Now running her own research firm, Whitney is still in the media spotlight. Remaining bearish on the big banks and the economy, Whitney predicts there will be a double dip in the housing market, but she has yet to make another epic call.

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