I have a reputation as being one of the most-if not the most-hard-assed players in the market. I never, ever, ever, ever, cut anybody a break, because I figured that at Salomon everybody was trying to knock us off. I was sure that if the tables were reversed, no one would ever give us a break. My view was always that these are the rules of the game. I don't give any quarter, and I don't expect any quarter.
Traders would sometimes call up when they had just missed the expiration of an over-the-counter option that went out m the money. There were a million excuses: "I tried to get through earlier." "I forgot." "I'm
only a few minutes late, couldn't you just make an exception?" I always knew that if we called late, no one
would let us exercise. The fact is, in all the time I was there, we never missed an expiration. The argument I
made was, "Look, we've put a lot of money and thought into our back-office operations. We've instituted numerous fail-safe measures to make sure that we don't make mistakes."
When I was working out the management company details with Merrill, they asked me how much they
should budget for back-office errors. I said, "Zero."
They asked in disbelief, "What do you mean by zero?" I said, "Zero. We don't have back-office errors."
They said, "What do you mean-of course you have back-office errors."
I answered, "No, we don't make errors. If you put in enough fail-safes, you don't make errors."
That was my attitude, and that was why I wouldn't break the rules. People who knew me really well would say, "Lipschutz, why do you have to be such a hard-ass about everything?" I would simply say, "Hey, these
are the rules; that's the way the game is played." So for me, letting the specialist off the hook was very much out of character.