Jerome Pustilnik

In the mid-1960s, when a computer still filled a large room, a Wall Street analyst named Jerome Pustilnik saw the potential for the technology to transform stock markets. He teamed up with associates to found Institutional Networks Corp., later known as Instinet. When it launched its computerized-trading service in 1969, Mr. Pustilnik promised it would slash trading costs and cut out brokers and other middlemen. He was right about the cost savings but wrong about cutting out brokers. In the 1970s, Mr. Pustilnik gradually persuaded pension funds and other institutional investors to pay fees to use bulky Instinet teletype terminals to make trades. “Then they made very, very little use of us,” he told Institutional Investor later. He needed to raise more money in the early 1980s, and new shareholders had different ideas about strategy. The founder resigned in 1983 and sold his stake for a modest sum. The new bosses encouraged brokers to participate. Reuters Holdings PLC began acquiring stock in Instinet in the mid-1980s and gained control. In 2005 NASDAC Stock Market bought Instinet for about $1.9 billion.