Irwin Guttag, a legendary Wall Street trader who helped develop the exchange-traded option and led a New York Stock Exchange oversight committee until last year, died Saturday in Florida at age 89. His death was announced by his son, John.
Guttag, who for many years led the trading firm of Kaufman, Alsberg & Co., was a specialist in arbitrage, exploiting small differences in a security's price between two exchanges. A pioneer in options, Guttag helped found both the New York Futures Exchange and the Chicago Board Options Exchange.
Appointed to the board of the New York Stock Exchange in 1977, Guttag ran the NYSE Special Surveillance Committee, charged with ensuring that floor traders follow ethical guidelines. He was chairman for more than two decades, retiring in 2004.
A native of New York, Guttag was the son of Henry Guttag, half of the Wall Street partnership Guttag Brothers, known at one time as "the dean of foreign exchange brokers." The firm also dealt extensively in numismatics, specializing in commemorative issues, and published guides to foreign currencies. Guttag Brothers' trading business was largely destroyed by the Depression.
Guttag's concern with ethics in business - manifest in his leadership of the surveillance committee and also in an endowed chair of business ethics at his alma mater, Syracuse University - stemmed at least in part from his father's struggle to avoid bankruptcy and repay debts in the wake of his trading firm's demise, according to John Guttag.
Although his father discouraged him, Irwin Guttag joined the now-defunct Guttenstein and Ladenberg as a bond-trading clerk. His mother had to resort to selling her jewelry to help him get a start, John Guttag said.
During World War II, Guttag served in the Navy and helped to coordinate small craft for the invasion of Normandy. After the war, he joined Kaufman, Alsberg. Initially a client-oriented firm, under Guttag's leadership it became a purely trading company. In 1984, Guttag helped engineer the firm's sale to American Savings and Loan of Florida for $29 million.
A born trader, Guttag failed when he attempted to retire after leaving Kaufman, Alsberg in 1988. He then formed Mentor Partners and became involved in the emerging field of risk arbitrage. "He abandoned options trading when it got efficient," John Guttag said.
Guttag was known for mentoring young traders, many of whom went on to leading roles on the Street. He was known universally as "Gus," a nickname applied, some say, in honor of Gustave Levy, a former chairman of Goldman Sachs. A few intimates, who had witnessed his lack of expertise with sailboats and automobiles, sometimes called him "Crash."
For many years, Guttag spearheaded fund-raising for the Wall Street division of the United Jewish Appeal.
"He traded off the tape until nearly his dying day. He watched the patterns - he could never explain how he did it," John Guttag said. At the end, "He was very pessimistic about the market. The last thing he did on the way to the hospital was to sell some stuff."
Born February 18, 1916, in New York City; died February 26 of heart failure at Boca Raton Community Hospital; survived by his wife, Marjorie Vogel Guttag, son, John, daughter, Addie, and four grandchildren.