John J. Phelan Jr., an unflappable Wall Street veteran and a former chairman of the New York Stock Exchange who helped assuage widespread fear during the October 1987 international stock market crisis and who was credited with advancing the use of computer technology by the Big Board in the 1980s, died Aug. 4 in Manhattan. He was 81.
The cause was complications from prostate cancer, said his son Peter Phelan.
Mr. Phelan, who took over his father’s Wall Street specialist firm in 1966, managed the exchange throughout the 1980s. He was president from 1980 to 1984 and chairman and chief executive from 1984 to 1990.
Mr. Phelan was commended for his collected response to the Black Monday crash of 1987, the largest one-day percentage drop in stock market history with the Dow Jones industrial average plummeting 508 points. Mr. Phelan resisted overwhelming pressure to close the exchange in an effort to end the hysteria. “If we close it, we would never open it,” he told the Wall Street Journal at the time.
Days after the crash, President Ronald Reagan issued an open letter of praise to Mr. Phelan, recognizing his professionalism and pragmatism at a time of great uncertainty in the market.
John C. Coffee, a securities law expert at Columbia University, described Mr. Phelan as “an agent of change” who contrasted sharply with several earlier “Old Guard chairs.”
Mr. Phelan recognized the benefits of investing in and utilizing groundbreaking trading technologies, such as the computerization of commission bills as well as profit and loss statements. Mr. Phelan’s firm, Phelan & Co., was among the first to offer such electronic services. As NYSE president, he was instrumental in Wall Street’s multimillion-dollar investment in the computerization of many of the Big Board’s high-tech operations. As a result, the exchange was able to incorporate electronic systems to handle the demand for high-volume, round-the-clock trading that would have been unthinkable a generation earlier.
As vice chairman of the exchange in 1976, he helped recruit William M. Batten, the recently retired chief executive of the J.C. Penney department store chain, to serve as the exchange’s chief executive. Batten, the first chief executive of a public company to serve as CEO of the exchange, was, like Mr. Phelan, a fierce advocate of technological modernization.
John Joseph Phelan Jr. was born on May 7, 1931, in New York City. Exposed to Wall Street at 16 as a runner for his father’s firm, he swore he “would never work on Wall Street again,” recalling in the Institutional Investor that “the pay was low, the trip [from home] was terrible, and the job was awful. I thought there must be a better way to make a living.”
Mr. Phelan, a Marine Corps veteran of the Korean War, received a business administration degree in 1970 from Adelphi University in New York. In 1957, he rejoined his father’s specialist firm, which became known as Phelan & Co.
Specialists are independent firms whose members work on the trading floor to buy and sell as needed to ensure that there are fair and orderly markets and liquidity in specific stocks. “They are the air traffic controllers for stock trading,” said Richard Adamonis, senior vice president of communications for the NYSE. A few years ago, specialists were renamed dedicated market makers.
Mr. Phelan became managing director of Phelan & Co. after his father’s death in 1966. He served on corporate boards, including that of Merrill Lynch & Co., and was board chairman of the Catholic Charities of the Archdiocese of New York.
Survivors include his wife of 57 years, Joyce Campbell Phelan of New York; three sons, John C. Phelan and Peter Phelan, both of New York, and David Phelan of Boston; a sister, Elizabeth Lawlor of Royal Oak, Md.; and six grandchildren.