4 History-Making Wall Street Crooks: Part 1

An article by Chris Seabury reflects on the interesting facts revolving around the criminals who had their shares in the Wall Street.According to the author, to fully understand the impact of these criminals on financial history, we must examine the individuals themselves, what they did and the legacy their misdeeds has left behind. While no two are alike, what these men share is the lasting effects of their crimes, which are still felt by Main Street many years later. earticle examines four of the most famous and unscrupulous Wall Street criminals: Richard Whitney, Ivan Boesky, Michael Milken and Bernard Ebbers.

The Unlucky Gambler: Richard Whitney was the president of the New York Stock Exchange (NYSE) from 1930 to 1935. On October 24, 1929 (Black Thursday), acting as an agent for a pool of bankers, he bought shares in many companies, creating a dramatic turnaround in the market. This caused him to be falsely hailed as a hero to the market, and did little to prevent its inevitable crash five days later. His fraud became perverse when he looted the NYSE's Gratuity Fund, which was supposed to pay $20,000 to each member's estate upon death.After an audit discovered the crime, he was charged with two counts of embezzlement and sentenced to five to 10 years in prison. As a result of his misdeeds, the newly formed Securities and Exchange Commission (SEC) set caps on how much debt firms can have and separated customer accounts from the property of brokerage companies.

The Market Manipulator: Ivan Boesky career on Wall Street began in 1966 as a stock analyst. In 1975, he started his own arbitrage firm, and by the 1980s, his net worth was estimated to be in the hundreds of millions. Boesky looked for companies that were takeover targets. He would then buy a stake in those companies on speculation that news of a takeover was going to be announced, then sell the shares after the announcement for a profit. Throughout the 1980s, corporate mergers and takeovers were enormously popular. Before the deals were announced, the prices of the stocks would rise as a result of someone acting on inside information that a takeover or leveraged buyout (LBO) was going to be announced. This is a sign of illegal insider trading, and Boesky's involvement in this illegal activity was discovered in 1986 .Boesky was charged with stock manipulation from inside information on November 14, 1986. He agreed to pay a $100 million fine and serve time in prison. He was also banned from trading stock professionally for life.