Wall Street Has Been Performing Criminal Acts Ever Since

1781 WordsMay 1, 20178 Pages
Wall Street has been performing criminal acts ever since its inception, and many of these schemes have become infamous public events. Scandals have included fraud, blackmail, and even outright stealing of money. These schemes have involved different techniques over Wall Street’s history, many of which fundamentally changed how the world deals in finance and regulates the economy. What most do not realize is that when someone commits fraud for billions of dollars, millions of people around the world are affected due to having invested in false promises. These scandals have also had a major effect on the American people, and it is important for people to know about Wall Street’s darker hours. Wall Street began in 1792, which was very early…show more content…
But Duer’s information was unpredictable at best, and began to lose money rapidly, even taking out money from the treasury in order to cover his losses. Once the public realized Duer’s investments were fake, a public panic ensued which caused the first ever financial panic in America. After inflation, over 50 million dollars were lost which, while today may not seem a lot, one has to realize that the United States had only a fraction of its population and land that it does today. Duer set the stage for Wall Street scandals to come, and they would only get bigger as the years went by. The next big scandal came in the mid-1800s, at which point Wall Street had already become the most important financial institution in the Western world, and men such as Daniel Drew had become one of the richest men on the planet. But Daniel Drew’s success did not come legally. The technique Drew used was what is today known as a ‘pump and dump’ scheme, where a large portion of a company’s stock is bought before publicly decrying the company (“Pump and Dump,” n.d.). Negative publicity for the company would cause the stock’s price to tumble, and Drew was able to ‘sell short’ the stock for massive returns. Selling short is when an investment is made with an expectation that the price will go down, and where profit is only feasible in extreme cases where a stock fails (“Selling Short,” n.d.). The return on these investments caused Drew to be one of the richest men on Wall Street until Drew went

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