Robert J. Birnbaum

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Robert J. Birnbaum
President of the New York Stock Exchange
In office
May 6, 1985 – 1988
Preceded byJohn J. Phelan Jr.
Succeeded byRichard Grasso
Personal details
Born
Robert Jack Birnbaum

(1927-09-03)September 3, 1927
Bronx, New York, U.S.
DiedDecember 23, 2021(2021-12-23) (aged 94)
Boca Raton, Florida, U.S.
Spouse(s)Joy E. Birnbaum (d. 1990)
Gloria J. Birnbaum
OccupationWall Street executive, attorney

Robert Jack Birnbaum (September 3, 1927 – December 23, 2021) was an American financial executive who served as president of the

Securities Exchange Commission, where his studies recommended the introduction of the forerunner of the modern National Market System
in securities trading.

Early life

Birnbaum was born on September 3, 1927, in

University of California, Hastings College of the Law and Georgetown University in Washington, where he would receive his Bachelor of Laws degree in 1962.[1]

Career

Early career

Birnbaum started his career with the

Securities and Exchange Commission (SEC) in 1961.[1] During his time at the SEC, he was part of a team that studied securities markets and he specifically focused on sections of the study as it pertained to the Over-the-Counter (OTC) market.[2] The team's report, titled Special Study of Securities Markets, made recommendations that would later result in structural changes of market exchanges in what would serve as a precursor to the National Market System.[1][3] The system enabled the setting up of a national price quotation mechanism to give all market participants both a common and an accurate view of securities prices, and led to the creation of a central clearing house that matched two sides of a trade for all trades in stocks as well as stock options.[1] He later worked as a branch chief for OTC regulation at the SEC.[2]

In 1967, Birnbaum joined the

Wall Street Journal columnist R. Foster Winans, whose column, Heard on the Street, was leaked to a stockbroker ahead of its publication. The case was one of the most high-profile cases of insider trading in the history of securities markets.[1]

New York Stock Exchange

In April 1985, Birnbaum was named president and chief operating officer of the New York Stock Exchange, effective May 6, 1985, with a salary of $500,000 per year.[6][7] Birnbaum's appointment was "the first time a senior officer of the Amex has taken a ranking post with its larger rival".[6] In 1986, Birnbaum angered traders of the New York Futures Exchange by stating "N.Y.F.E. is not a major player".[8]

Birnbaum served as president during the market

crash of 1987, when US stock prices dropped more than 22 percent, or 508 points, in a single day on October 19, 1987.[1][2] The day would later be dubbed "Black Monday".[9] His actions during the incident included freezing of trading, but restarting as normal the very next day. The New York Times
described his actions as having "helped soothe investors and prevent a frenzied sell-off from continuing".

Subsequently, Birnbaum would bring together leaders of all major exchanges to study the event and put in place a common set of rules to halt trading. In a meeting that Birnbaum convened between leaders from various exchanges, including

circuit breakers as trade curbing mechanisms during periods of excess volatility.[1]

In 1988, Birnbaum was replaced as president by Richard Grasso,[10] who had been the executive vice president for capital markets since 1986 and was a member of the Exchange's management committee.[11][12] In a statement by former Exchange president and then Chairman, John J. Phelan Jr. said about Birnbaum: "His many years of experience in operations and extensive knowledge of securities industry issues contributed significantly to the NYSE’s ability to operate smoothly and efficiently during the market crisis."[11] Others have noted that his initiatives shaped modern securities markets.[1]

In 2000, he was a director of the Chicago Board Options Exchange.[13] In February 2009, after financial markets had experienced a severe downturn and Wall Street's reputation was diminished, he stated: "It's taken a hit, but so what? We don't need all the bright people going to Wall Street, chasing money. There's a lot of things bright people can do. Like find a cure for cancer."[14]

Personal life

Birnbaum was married to the late Joy E. Birnbaum, with whom he was the father of Gregg Birnbaum (b. 1960), a journalist and professor, and Julie Duffy (b. 1965, married to Lawrence Duffy), an interior designer. In 1993, he married Gloria J. Birnbaum (b. 1942),[13] and became stepfather to three children, Jeremy, Simon, and Jenny.[2] He had seven grandchildren.

Birnbaum died in Boca Raton, Florida, on December 23, 2021, at the age of 94.[2]

References

  1. ^
    ISSN 0362-4331. Archived
    from the original on January 8, 2022. Retrieved January 8, 2022.
  2. ^ a b c d e Arnold, Laurence (January 2, 2022). "Robert Birnbaum, Who Led New York's Two Exchanges, Dies at 94". www.bloomberg.com. Archived from the original on January 2, 2022. Retrieved January 9, 2022.
  3. ^ Society, SEC Historical. "Securities and Exchange Commission Historical Society". www.sechistorical.org. Archived from the original on November 22, 2021. Retrieved January 8, 2022.
  4. ^ "Amex Elects New President" (PDF). The New York Times. May 27, 1977. Retrieved January 15, 2020.
  5. ^ Gilpin, Kenneth N.; Purdum, Todd S. (April 8, 1985). "BUSINESS PEOPLE ; Big Board Officers Vie for Top Post". The New York Times. Retrieved January 15, 2020.
  6. ^ a b Greenberg, Herb (April 5, 1985). "BIRNBAUM NAMED NYSE PRESIDENT". Chicago Tribune. Archived from the original on January 15, 2020. Retrieved January 15, 2020.
  7. ^ "Amex President Named as Head of Larger NYSE". Los Angeles Times. April 5, 1985. Archived from the original on January 15, 2020. Retrieved January 15, 2020.
  8. ^ Gilpin, Kenneth N. (November 8, 1986). "Birnbaum Angers Futures Traders". The New York Times. Archived from the original on January 15, 2020. Retrieved January 15, 2020.
  9. ^ Lambert, Emily (October 1, 2010). "The Truth About the Flash Crash". Forbes. Archived from the original on January 15, 2020. Retrieved January 15, 2020.
  10. ^ "Grasso to Replace Birnbaum at NYSE". Los Angeles Times. March 4, 1988. Archived from the original on January 15, 2020. Retrieved January 15, 2020.
  11. ^
    AP news. Archived
    from the original on January 15, 2020. Retrieved January 15, 2020.
  12. AP news. March 4, 1988. Archived
    from the original on January 15, 2020. Retrieved January 15, 2020.
  13. ^ a b "WEDDINGS; Julie Birnbaum, Lawrence Duffy". The New York Times. May 14, 2000. Retrieved January 15, 2020.
  14. ^ Segal, David (February 3, 2009). "Wall St., a Financial Epithet, Stirs Outrage". CNBC. Archived from the original on January 15, 2020. Retrieved January 15, 2020.
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