- Gerald Putnam
Gerald Putnam is an American businessman. He started Archipelago holdings, an
electronic communication network , in 1999; it was acquired by theNYSE for almost $3 billion. Putnam was selected as one of the innovators of 21st century by "Time" magazine.Putnam built from scratch a stock and options exchange using only electronic trading. With the passage of
Regulation NMS , which mandated that orders to buy/sell equities be executed at the best price (no matter what exchange they trades on), the internal workings of an opaque stock market were forced to become transparent and competitive. This transformation caused the NYSE to lose its centuries old monopoly.ArcaEx was built to instantly look at the Arca exchange for best prices and if not matched then to route to the bourse that displayed the best price. It was exactly this type of algorithmic matching that put ArcaEx into the leadership position in the US.
When Putnam spearheaded Arca's purchase of the
Pacific Stock Exchange , he created the first ECN that was also a stock exchange. He also took Arca into options trading. By assembling a team of managers and working hard to help make the marketplace more fair and transparent, Putnam attracted the struggling NYSE's attention.John Thain , a perennial deal maker, did his first major deal since taking the helm at the NYSE when he merged with Arca.This merger, which was incredibly controversial among the old-boys network, breathed new life into the NYSE. It also caused the 212-year old (at time of merger) NYSE to demutualize and make an
initial public offering . NYSE seatholders were each given roughly 80,000 shares of NYX in exchange for their now-obsolete NYSE seats. Shortly after the IPO, hordes of floor traders and specialists were made redundant, margins were widely expanded, and the members-only luncheon club and barber shop and 20% of the old-fashioned trading floor were closed.The newly established public NYSE soon merged with
Euronext to form NYSE Euronext.The company declared its first
dividend in June 2007. Putnam was promoted to Vice Chairman and given additional responsibility overseeing SIAC. In August 2007, Putnam announced that he would leave his managerial duties with the NYX and remain involved as a consultant with an office in Chicago.References
* [http://arcaex.blogspot.com ArcaEx related blog]
* [http://www.time.com/time/innovators/business/profile_putnam.html Quicker on the Draw in a Wall Street Showdown]
* [http://banking.senate.gov/99_10hrg/102799/putnam.htm Prepared Testimony of Mr. Jerry Putnam CEO of Archipelago ECN to the Senate Banking Committee]
* [http://www.suntimes.com/business/roeder/536331,CST-FIN-putnam31.article Putnam kaput in NY]
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