James J. Needham, the first SEC commissioner to have been a practicing public accountant and the first full-time, salaried chairman of the New York Stock Exchange, has died. He was 80.
Needham, whose three years at the Securities and Exchange Commission began in July 1969, was credited with speaking out for improvements in accounting principles, procedures, practices, and financial reporting. In a press release, the SEC also noted that he was particularly concerned with the structure and composition of the securities markets and that he frequently spoke of the need for vigorous self-regulation in the securities industry, subject to appropriate federal oversight. Needham was also cited as a strong proponent of fully automated markets.
In 1972, Needham became chairman of the NYSE, where he was criticized for resistance to proposals by constituencies in Washington and New York, according to The Washington Post.
During his four-year tenure, wrote the newspaper, Needham fought the attempt to end the 200-year-old practice of fixed brokerage fees, and then the implementation of negotiated commissions for stock trades.
Regarding rate reform, Needham “was on the wrong side of history,” Columbia professor and securities expert John C. Coffee Jr. told the Post. The ban on fixed fees, enacted in 1975, “proved to be a huge boon for the securities industry. Once competitive rates were abolished by Congress, we got more trading, and the public was more willing to buy securities.” The change was especially beneficial to small investors, the newspaper noted.
Needham was also unlucky to preside over the Big Board during one of the worst market downturns, in the early 1970s. It was widely reported that he was pressured into resigning in April 1976, nearly two years before his contract was to expire, the Post also wrote.
In 2003, Needham was again in the news when Richard Grasso’s compensation came to light. Needham called for his resignation, and for the resignation of all board members who approved Grasso’s $140 million pay package.