Coastal Management Group LLC
Coastal Management Group, an investment advisory and money management firm, was founded by three accomplished veterans of exchange-based trading. Its principals have experience in managing their own specialist firms, as division heads of larger firms, and as overseers of trading of securities, currencies, and derivatives. All the principals were present at the birth of many kinds of derivatives, have seen them evolve, and understand how they trade.
Mr. Herman’s prominent specialist firm set markets over the years in hundreds of equity and derivative products. After selling GHM to Bear Stearns, Mr. Herman worked with the late and legendary John Mulheren.
Gary graduated from the University of Denver, majoring in English and psychology. Within two years he was made partner at what was to eventually become GHM Inc.—a stock specialist firm on the American Stock Exchange. He was the force behind GHM’s expansion into the nascent options market. Under his aegis, the firm blossomed over the next twenty-eight years into the number-one rated "book" on the Floor—becoming the primary market for such companies as Merrill Lynch, Amazon, Pfizer, Royal Dutch Shell, and more than a hundred others from every industry imaginable.
In addition to options, for which it was best known, GHM was responsible for other innovations. GHM developed advanced strategies for primes, scores, and warrants. It also was responsible for the premier equity product on the American Stock Exchange—the classes of Washington Post stock—and for handling arbitrage between them. Beyond that there was British Petroleum, which traded here and overseas and presented its own challenges. In all these areas Mr. Herman achieved success.
GHM expanded from a ten-person operation to over a hundred employees by 2001, when it was approached by the legendary Wall Street maverick John Mulheren, whose division of Bear Stearns purchased it. Rather than retire, Mr. Herman took the opportunity to work with Mr. Mulheren for two years as risk manager, floor liaison, and director of dispersion trading. After that, Gary took a little time off from watching the tape every day and then got back together with Michael Riley and Daniel Mintz to form Coastal Management Group LLC.
Mr. Herman is married and is the proud father of Kate Herman, who is employed at Random House, and Leah Herman, a student at George Washington University.
Daniel S. Mintz
For eight years Mr. Mintz taught mathematics and computer science at the undergraduate and graduate levels. He then shifted careers, and traded for twenty-five years, primarily on the Amex and the CBOE, where his firm carved out a large share of the burgeoning options market.
When Mr. Mintz graduated college, the listed options market had not yet begun. However, while at MIT, he absorbed a strong background and useful skills for what would later develop on the trading floors. He also crossed paths with seminal figures in the field of finance, and after he became a practitioner, Mr. Mintz was the beneficiary of insights and advice from personal communications with several of them, including Robert Merton, Myron Scholes, and Fischer Black.
On the floor in the early days, Daniel had to develop for himself many of the techniques that later became standard in the industry. He was a very early user of computers in options trading and wrote the software himself for what were slow, primitive machines that required facility with operating systems and compilers.
When tax spreads became viable, Mr. Mintz was on the leading edge. When puts came along, he was among the first to see the potential of conversions, reversals, and collars. When ETFs began, he was in there, making markets in them with his own money. When interest rate options began trading, he commuted to the CBOE to put on positions himself, having already traded government and corporate fixed-income instruments on the floor of the Amex.
Along the way, Mr. Mintz formed a couple of noteworthy alliances. With Spear Leeds and Kellogg he joined in the purchase of several media properties. With Sanford C. Bernstein he helped launch their options brokerage and positioning arm. From these ventures Mr. Mintz picked up some good contacts and some valuable background in financial analysis.
At the American Stock Exchange Mr. Mintz rose through the ranks to become chairman of the Option Market Makers Association, representing the interests of more than five hundred Exchange members. He also became a Floor Official and an Exchange Official, serving on the Allocations Committee and as part of many Disciplinary Panels. In addition, Mr. Mintz assisted on the Facilities Committee, overseeing expansion, and for many years on the New Products Development Committee.
After a brief retirement Daniel was happy to join forces with Gary Herman and Mike Riley. Coastal Management Group has the right attitude, the right skills, and good prospects.
Mr. Mintz holds degrees from MIT and from the Courant Institute of Mathematical Sciences. He is married, with two sons.
Michael G. Riley
Mr. Riley built from scratch an Amex specialist unit which grew over time until at his retirement from floor trading he had responsibility for over a hundred employees. During his career he oversaw the introduction and managed the risk of many kinds of products.
Michael Riley has been involved in the listed derivatives market since its inception in April 1973. He worked on the floor of the CBOE in the summers of 1973 through 1977 while attending the University of Connecticut. At that school he helped introduce the finance department's derivatives analysis section. Upon graduation in 1978 Michael joined Paine Webber in their newly formed retail listed options department. Within six months he was promoted to vice president in charge of the retail options trading and small institutional positioning desks. At Paine Webber in 1981 Michael participated in planning and implementing one of the first index arbitrage program trades, crossing the CBOE's OEX index versus the first stock index future (the Kansas City Board of Trade’s Value Line).
In 1982 Michael left Paine Webber to trade for one of the very few conversion-reversal arbitrage firms, for which he traded Merrill Lynch and XMI on the American Stock Exchange. In 1984 NYSE specialist firm Walter Frank hired Michael to develop their options trading effort in NYA and various index arbitrage and equity options arbitrage. In 1986 Michael was back at the Amex, this time at GHM, where he worked with Gary Herman to help develop risk management procedures and a training regimen for younger traders. Michael also acted as specialist in some of the world's most active index options. At GHM Michael participated in pricing and consulting on hybrid products such as primes and scores and equity rights and warrants. Michael continued with GHM, helping Gary develop the derivatives specialist business until 1995.
In 1995 Mr. Riley was hired away by LETCO, the renowned Chicago-based derivative specialists. LETCO was the largest trader on the largest exchange, and Michael was hired to drive their expansion in New York. Mr. Riley built the 10-person 13-product specialist unit into four divisions comprising 130 employees. Options trading, equities, bond, and index specialists, exchange traded funds, structured products, Holders, and market making all reported to Mr. Riley. Among the many responsibilities allocated to Mr. Riley by the Exchange were American Express, Texaco, and Yahoo. Letco Specialists LP, as the unit came to be named, was acquired along with the rest of LETCO and Stafford Trading in 2002 by Toronto Dominion Bank. Michael became managing director at TD Options LLC in charge of United States East Coast listed option trading with 160 traders reporting to him. He managed 345 equity option classes, 50 equities, ETF arbitrage, and index option trading.
Michael retired in late 2002 and moved to Rhode Island, where he traded for his own account until 2005, when he formed Coastal Management Group LLC with Daniel Mintz and Gary Herman. Michael is married and has three children. He has a series 65 license and is a member-in-waiting at the Providence Society of Security Analysts. Michael is on the advisory boards of Telemark, Actuarials Inc, and, soon, the Hedge Fund Association Northeast Chapter. Michael enjoys poker, board games, and puzzles and is a member of Rhode Island and American Mensa Clubs.
The chores of administration are capably handled by Kaufman Rossin Fund Services.
Coastal Management Group
Coastal Management Group
A Rhode Island Limited Liability Company