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Mss:962 1972-1989 S524

Shad, John S. R., 1923-1994. John S. R. Shad papers, 1972-1989 (inclusive): A Finding Aid

Baker Library Historical Collections, Harvard Business School, Harvard University


Harvard Business School, Boston MA 02163.

© President and Fellows of Harvard College

Descriptive Summary

Call No.: Mss:962 1972-1989 S524
Repository: Baker Library Historical Collections, Harvard Business School, Harvard University
Creator: John S. R. Shad, 1923-1994
Title: John S. R. Shad papers
Date(s): 1972-1989
Quantity: 6.5 linear feet (12 boxes)
Language of materials: English
Abstract: Speeches, congressional testimonies, and briefing materials of John S. R. Shad, mostly created during his tenure as chairman of the United States Securities and Exchange Commission, 1981-1987. The records date from 1972 to 1989.


Gift of Leslie Shad, 2003.

Processing Information:

Processed: February 2004
By: Timothy J. Mahoney

Conditions Governing Access:

Some material may be stored offsite. Please contact histcollref@hbs.edu for more information.

Preferred Citation:

Cite as: John S. R. Shad papers, Baker Library, Harvard Business School.

Biographical Note:

John Sigsbee Rees Shad was born in Brigham City, Utah, on June 27, 1923 and was raised in California. During World War II, Mr. Shad served as a lieutenant (junior grade) in the United States Naval Reserve (1943-1946). After leaving the Navy, Mr. Shad attended the University of Southern California and in 1947 earned a Bachelor of Science degree. He then attended Harvard Business School and was awarded the Master of Business Administration degree in 1949. Later that year, Mr. Shad began a lengthy career on Wall Street. He was a securities analyst for Value Line Inc., an investment advisory service, and subsequently served in the same capacity at Shearson, Hamill & Company. During these years, Mr. Shad earned a law degree from New York University (LL.B., 1959). In 1963, Mr. Shad was recruited as a vice president of E. F. Hutton & Company, which was then a California-based retail brokerage. Working in New York City, Mr. Shad developed E. F. Hutton & Company's investment banking operations and headed its corporate finance and mergers and acquisitions departments. When he departed in 1981, Mr. Shad was vice chairman of the board of directors of the E. F. Hutton Group, Inc. and was the firm's third-largest stockholder.
During the 1980 Presidential election, John S. R. Shad chaired the Reagan-Bush Campaign's New York State Finance Committee. When Reagan took office in 1981, he nominated Mr. Shad for the chairmanship of the United States Securities and Exchange Commission, the independent federal agency charged with protecting investors and maintaining the integrity of the securities markets. Mr. Shad was confirmed by the United States Senate, and then sworn-in on May 5, 1981 as the twenty-second chairman of the S. E. C. He was only the second Wall Street executive appointed to the S. E. C. chairmanship, following forty-seven years after the first chairman, Joseph P. Kennedy.
Under Mr. Shad's ardent direction, the S. E. C. initiated a deregulatory program that conformed to the Reagan Administration's efforts to reduce the size of the federal government. In a December 2, 1981 speech before the Securities Industry Association, Mr. Shad stated "I believe industry can regulate itself better than the government can." Mr. Shad argued that mounting regulatory burdens were harmful to America's productivity and growth. His S. E. C. worked to reduce and streamline paperwork requirements and to increase automation. The Commission launched EDGAR (Electronic Data Gathering, Analysis and Retrieval System), a computer reporting system, in 1984.
The predominating issues of Mr. Shad's tenure as S. E. C. chairman were hostile tender offers (or takeovers) and insider trading. Hostile takeovers were increasingly common during the early to mid 1980s, and the issue received considerable popular attention. Mr. Shad was largely untroubled by the increasingly common hostile tender offers. As a steadfast proponent of free markets, Mr. Shad believed that hostile mergers and acquisitions could benefit stockholders, and could also encourage better corporate management. The Securities and Exchange Commission generally did not interfere in hostile tender offers during Mr. Shad's years as chairman.
Mr. Shad's S. E. C. took an aggressive stance on insider trading and fraud cases that contrasted with its policies on hostile takeovers and other regulatory issues. Chairman Shad himself promised to come down "on insider trading with hobnailed boots." Several high-profile insider trading cases made headlines during Mr. Shad's chairmanship. Most notable was the infamous Drexel Burnham Lambert "junk bond" scandal, which ultimately led to the convictions of Dennis Levine, Ivan Boesky, and Michael Milken.
Over the course of his chairmanship, Mr. Shad's concern with insider trading and fraud became increasingly personal. In the winter and spring of 1987, he made several speeches that connected the insider trading scandals with a broader issue—the general decline of business leadership and ethics. Mr. Shad was particularly upset that many of those indicted for insider trading were graduates of the country's leading business and law schools. In March 1987, he made a substantial personal donation to his alma mater, Harvard Business School. Mr. Shad's gift endowed a program in business ethics and leadership.
When John S. R. Shad resigned from the Securities and Exchange Commission on June 18, 1987, he was the longest-serving chairman to date. Later that month, Mr. Shad was confirmed as the United States Ambassador to the Kingdom of the Netherlands. He resigned his ambassadorship in February 1989 to join Drexel Burnham Lambert, a major Wall Street investment house whose former leadership then faced major corruption charges for racketeering, insider trading, and securities fraud. As part of its settlement agreement with the S. E. C., Drexel Burnham Lambert agreed to name Mr. Shad as its chairman of the board. He served until July 1990. John S. R. Shad died in New York City on July 7, 1994 at the age of seventy-one.

Series Outline

The collection is arranged in the following series:

Scope and Content Note:

The collection consists mainly of copies of the speeches and congressional testimonies that John S. R. Shad gave during his chairmanship of the Securities and Exchange Commission, 1981-1987. Also included are briefing materials gathered to provide Mr. Shad with background information on several regulatory issues that were pending during his tenure at the S. E. C. The records date from 1972 to 1989.

Container List

Additional Index Terms

Tender offers (Securities).
Consolidation and merger of corporations.
Consolidation and merger of corporations -- Law and legislation.
Corporations -- Investor relations.
Financial services industry.
Insider trading in securities.
Insider trading in securities -- Law and legislation.
Investment bankers.
Over-the-counter markets -- Law and legislation.
Stock exchanges -- Law and legislation.
Trade regulation.
Shad, John S. R., 1923-1994
United States. Securities and Exchange Commission.
Drexel Burnham Lambert Incorporated.
E. F. Hutton & Company.
New York Stock Exchange.