John J. Phelan Jr., the former New York Stock Exchangechairman credited with managing the chaos of the "Black Monday"market crash of 1987, died Saturday. He was 81.
The NYSE Euronext and Phelan's family confirmed his death Monday. The cause ofdeath was not disclosed.
A former Marine who worked as trader for years before leading the exchange,Phelan was best known for keeping the markets open following the historic crashon Oct. 19, 1987. That day, stocks suffered what is still the largestsingle-day percentage drop, with the Dow Jones industrial average crashingnearly 23 percent.
It was considered Phelan's finest moment. Those who were there say panicgripped Wall Street as trading volumes soared, orders littered the floor andthe Dow plunged. But Phelan worked with calm authority and resisted calls toclose the exchange, which he knew would breed further panic. Later that day, herang the closing bell himself, demonstrating leadership at a time when the eyesof the world were on the exchange.
"I think he went a long way in protecting us from a much worsesituation," said James Rutledge, managing partner of Rutledge SecuritiesGroup, who was there for the crash.
The following day, pressure to close the market continued but Phelan walked thefloor, cheering traders on. Meanwhile, he worked closely with the FederalReserve to convince banks to keep credit lines open so trading could continueand pressure on the market would ease.
President Ronald Reagan later heralded Phelan and his staff's work in a letterthat Phelan read aloud from the podium of the exchange. Many who were there sayit was this kind of visible leadership that defined him.
Phelan was regarded as an intelligent and calm man who derived his authorityfrom experience. Having worked at nearly every level, he was familiar with themarket's innermost workings. As an official on the floor, people regularlysought him out because they saw him as a knowledgeable and fair resource.
He served as president from 1980 to 1984 and then as chairman from 1984 to1990.
"He is one of the distinguished executives of the financial industry inthe U.S.," Marshall Carter, deputy chairman of the board of NYSE Euronext,said.
Phelan was also widely considered a man who was not afraid of taking a boldstance when warranted, including modernizing a staid institution. He introducedcomputer technology to the exchange prior to the plunge, which some say helpedhandle the volume of orders that day.
He also pushed for further reforms after the crash, including supporting theadoption of so-called "circuit breakers," which halt trading duringsteep plunges and aim to prevent the kind of free-fall that took hold in 1987.He argued for greater coordination between equities and derivatives markets.And colleagues say he supported any moves to ensure that investors wereinvesting, not just gambling, with their money.
"I think (his legacy) was having a very high sense of integrity and applyingthat within a business context, which was unusual at the time and continues tobe unusual today," said his son Peter Phelan.
In addition to his work at the NYSE, he served on the board of a number ofmajor companies including Merrill Lynch & Co. And he was very active incharitable activities, most notably as Chairman at the Catholic Charities Boardof Trustees.
The New York native is survived by his wife Joyce and three sons John, Peterand David.