Black Tuesday
On October 29, 1929, the Dow fell 11.7 percent. Roughly 16 million shares changed hands on the NYSE, a volume record that stood for 39 years. Ticker tapes ran hours behind actual trading because the equipment could not keep up. By July 1932 the index was down 89 percent peak-to-trough. Margin lending, pooled manipulation, and insider trading had been technically legal and widespread throughout the 1920s.
Before 1934, there was no such thing as insider trading as a prosecutable offense in the US. Corporate directors routinely traded on non-public information — it was considered an ordinary perk of the job.
03 · The SEC
The 1929 crash revealed that US public companies were under essentially no obligation to tell the truth. It took five years, a 90% decline in the Dow, and a new administration for Congress to create the Securities and Exchange Commission.
Read the full era →