Junius Peake, Wall Street innovator, dies

Junius Peake, who poked and prodded the finance industry as one of the earliest, most persistent proponents of electronic trading, has died. He was 80.

He died on Jan. 27 in hospice care at Northern Colorado Medical Center in Greeley, Colo., said his son, Andrew. He suffered a series of strokes over the past few years, following his retirement in 2006 as professor of finance at the Monfort College of Business, part of the University of Northern Colorado in Greeley.

Peake, known as Jay, had a front-row view as Wall Street firms were inundated by paper during what became known as the back-office crisis of the late 1960s. As partner in charge of operations at the Manhattan brokerage firm Shields & Co., he oversaw the use of a $500,000 computer system the firm purchased in 1964 from National Cash Register Co., now known as NCR Corp.

The computer, which some employees called "the monster," calmed the frenzy of settlement days, The New York Times reported in a 1965 article. "Our overtime has been minimal recently," Peake told the Times.

The back-office experience shaped Peake's view that buying and selling by shouting on trading floors such as the New York Stock Exchange "was no longer viable in the modern world and that it was essential to move to automated trading," he wrote in a four-page summary of his career. "This was a change in which I passionately believed, and I began to express my opinions and suggestions for change in many articles and papers, which led to me being asked to testify at various congressional hearings."

Peake teamed up with two like-minded financial thinkers -- Morris Mendelson, a professor of finance at the University of Pennsylvania's Wharton School, and R.T. Williams Jr., a computer expert -- to devise an electronic stock exchange, presenting their idea to the Securities and Exchange Commission in 1975.

"We wrote the SEC proposal in less than two weeks," Peake told The Philadelphia Inquirer in 2008. "Some Luddites argued we were going to kill the NYSE, put many specialists out of business, and ruin the U.S. financial system. They thought we were the devil incarnate."

The three men refined their idea and publicized it in papers published in 1976 and 1979. Their 1976 proposal was contained in a 50-page report to the SEC titled "National Book System: An Electronically Assisted Auction Market." New Vision It envisioned a single, electronic national stock market, with up-to-the-minute bids and offers available for all brokers and customers to see on computer screens.

The plan also called for quoting prices in decimals, doing away with the one-eighth increments that had long defined Wall Street math. "This would make the markets better because decimalization would create genuine price competition for securities," Peake wrote. "However, this was resisted, as the market preferred the nice wide spreads, which trading in fractions brings." Fractions would remain in place until 2000, when stock exchanges moved to the dollars-and-cents pricing that Peake and others had called for.

Junius Wentworth Peake was born on Feb. 12, 1931, in New York City, where he attended choir school at the Cathedral Church of Saint John the Divine. He left Syracuse University after just one year to work on Wall Street to help support his family, after his father suffered a stroke.