The Founding of the Securities and Exchange Commission Historical Society 1998 – 2002

What is the Securities and Exchange Commission Historical Society? In late 1998, David Ruder, Harvey Pitt and Paul Gonson formulated a plan to preserve the written and oral history of the U.S. Securities and Exchange Commission. The objective, modeled to a certain degree on the Supreme Court Historical Society, was to create a repository of U.S. financial regulatory history. Watch this short history of the Society’s founding and mission.

Mission Accepted

A proposal for a SEC Historical Society is put forward by Gregg W. Corso (SEC staff) and others, and recommends that former SEC Chairman David Ruder lead the effort.

David Ruder writes to SEC Chairman Arthur Levitt accepting the invitation to lead efforts to organize an SEC Historical Society.

Preparing for launch

David Ruder invites colleagues to join him on February 25, 1999 “to discuss prospects and strategies for creating the new organization.”

Ruder recruits Harvey Pitt and Paul Gonson to play significant roles in establishing the new entity. The organizing meeting takes place on February 25, 1999 confirming Ruder as the Society’s first Chairman, Pitt as its first President, and Gonson as its first Secretary/Treasurer. A number of suggestions are put forward by participants. Paul Gonson’s official meeting notes provide highlights of the discussion.

On March 16, 1999, David Ruder drafts a letter to the participants of the February 25 organizational meeting outlining a schedule of steps for creating the SEC Historical Society.

Liftoff

On April 4, 2000, another organizing meeting is held to, among other things, approve the initial 26-member Board of Trustees [9077]. Paul Gonson’s minutes of the meeting [9029] describe who was in attendance, actions on structure and governance, and plans for an inaugural reception to be held on May 11, 2000 at the National Building Museum.

An invitation to the May 11, 2000 inaugural reception containing membership* information is printed and mailed.

(*The Society is no longer a “membership” based organization, but a donor-based entity.)

The SEC Historical Society’s founding Trustees — David Ruder, Harvey Pitt and Paul Gonson — pose at the National Building Museum with then-SEC Chairman Arthur Levitt at the May 11, 2000 inaugural reception. [9112]

Professor David S. Ruder delivers remarks at the May 11 reception and describes his vision for the SEC Historical Society. [9062]

A list of attendees of the inaugural event reveals interest by SEC staff and that of other regulatory and regulated entities, the securities bar, individuals from academia, and those from the accounting and auditing profession. [9063]

On August 30, 2000, David Ruder writes Professor Joel Seligman to thank him for agreeing to chair the Society’s Acquisitions Committee. In the letter, he also indicates additional priorities: recruiting a full-time Executive Director and activating volunteer Trustees of the Board to perform certain tasks until staff is hired. [9051]

Liftoff

On March 19, 2001, Carla Rosati is hired as the Society’s first Executive Director, a position she held through May 2017.

In a memo to his fellow Trustees on April 18, 2001, Society Chairman David Ruder describes the Society’s accomplishments and future activities, including sponsorship of a major issues conference to explore challenges facing the Commission in the next decade. [9066]

In a foreshadowing of the move away from the idea of a bricks and mortar museum, a membership brochure for 2001-2001 outlines priorities for the year, including to “exhibit visuals and artifacts from the SEC archives through the Society’s expanded Web site (www.sechistorical.org)”

In spring of 2001, the Society publishes its first newsletter under the supervision of Trustee Daniel Goelzer. Announcements include details of the November major issues conference and initiation of an Oral Histories project.

On August 3, 2001, Harvey Pitt is appointed Chairman of the US Securities and Exchange Commission and resigns as President of the Society. Paul Gonson becomes Society President and Robert Kueppers Secretary-Treasurer. David Ruder remains Chairman.

While the Society is planning major new “firsts” for the autumn of 2001 to showcase itself and its mission, horrific national news will soon break — including the September 11 terrorist attacks and an anthrax letter scare – and consume the attention of the general public and coincide with an already slowing economy.

Two days after the September 11 attacks, the Society conducts its first oral history interview with Milton Kroll on September 13, 2001. [KROLL OH]

The Society also plans its first recorded program, to be held on October 4, 2001, that will feature key players from the 1963 Special Study of the Securities Markets, arguably one of the most important studies of the markets ever completed by the SEC.

Those participating in the October 4 discussion of the 1963 Special Study include Milton Cohen, director of the study, Ralph Saul, associate director of the study; Robert Birnbaum, Meyer Eisenberg, Norman Poser, Eugene Rotberg, Fred Siesel, David Silver and Stanley Sporkin. Brandon Becker and Irving Pollack moderated the discussion.

Aimed at showcasing the Society, those invited would include representatives of the world’s major securities regulators, U.S. and foreign securities exchanges, major investment banks, academics and lawyers. [9066]

The following month, on November 14-15, a joint SEC Historical Society and U.S. Securities and Exchange Commission major issues conference, “Securities Regulation in the Global Internet Economy,” has been months in the planning with the support of Northwestern University School of Law. Aimed at showcasing the Society, those invited would include representatives of the world’s major securities regulators, U.S. and foreign securities exchanges, major investment banks, academics and lawyers. [9066]

While deemed a substantive success, the November 2001 major issues conference was not a financial one, leaving the Society with over $100,000 in debt. Northwestern University Law School came to the Society’s rescue and absorbed the liability. The Society agreed to pay $50,000 back to Northwestern in 2 installments in 2002.

Liftoff

Society President Paul Gonson reaches out in January 2002 to schedule a February retreat of volunteers of an ad-hoc vision/planning committee to help create an action plan for the Society for the coming years. At the same time, however, an audit of the Society finds there is a “going concern” due to insufficient funds to maintain operations. The officers dismiss Executive Director Rosati as of May 11, the date of the Board’s planned annual meeting. On March 5, in the weeks prior to her last day on May 11, Executive Director Rosati secures a $25,000 commitment from the New York Stock Exchange to fund a “virtual museum” of the Society.

A draft Action Plan 2002-2005, dated March 29, the result of the February vision/planning retreat outlines goals to enhance the website as a “virtual museum” and secure funding needed to sustain and expand operations.

An April 24, 2002 memo by Richard M. Phillips to the Trustees outlines his thoughts on how the “virtual museum” might be developed with the help of volunteer committees focused on the different sectors of the Commission (investment company, market regulation, corporation finance, general counsel, and enforcement).

On May 11, at the Board’s annual meeting, eleven Trustees formally decide to continue efforts to sustain and grow the Society and virtual museum. David Ruder remains Chairman; Theodore Levine succeeds Paul Gonson as President; Robert Kueppers continues as Treasurer; and Stanley Keller becomes Secretary.

The May 31, 2002 Update Report of the Executive Director reveals the continuing uphill climb for the Society financially.

By December 31, 2002, the Society ends the fiscal year “in the black.”

The “Highlights of 2002” provide an overview of major achievements of the year, most significantly, birth of the Securities and Exchange Commission Historical Society’s Virtual Museum.

Oral histories taken in 2018 and 2019 of the Society’s first Chairman, David Ruder, first President, Harvey Pitt, and first Secretary/Treasurer, Paul Gonson, capture their significant roles and unique memories about the founding of the Society 20 years earlier.