Former SEC Chief Dead at 90 - InvestingChannel

Former SEC Chief Dead at 90

David Ruder, the former chairman of the U.S. Securities and Exchange Commission (SEC) during the 1987 stock market crash known as “Black Monday” has died at age 90.

As head of the SEC from August 1987 through September 1989, Ruder presided over the final phase of the agency’s insider-trading investigation of Ivan Boesky, Michael Milken and Drexel Burnham Lambert Inc. He also steered the agency away from the anti-regulatory course it had taken during Ronald Reagan’s first six years as president.

A longtime professor of corporate and securities law at Northwestern University, Ruder was President Reagan’s pick to succeed John S.R. Shad, a former vice chairman of E.F. Hutton & Co. who had led the SEC between 1981 and 1987.

Ruder was in his third month as SEC chairman when markets around the world plunged on October 19, 1987. The Dow Jones Industrial Average would end the day down 22.6%, having lost 508 points. That morning, Ruder delivered remarks to a conference of the American Stock Exchange in Washington, D.C. Afterward, he met with reporters seeking his reaction to what was happening in equity markets.

“I’m afraid to say that there is some point, and I don’t know what that point is, that I would be quite anxious to talk to the New York Stock Exchange about a temporary, and very temporary, halt of trading,” he replied in part, according to an Associated Press account of the event.

There would be no such halt, and Ruder was criticized for mentioning it as a possibility, which may have caused nervous investors to believe they had to race to sell shares before the market closed. The crash worsened after Rudder’s comments.

At a hearing three weeks after the crash, Ruder explained that when he spoke to reporters on October 19, he “did not have in my consciousness what sort of day it would be.”