TY  - JOUR
AU  - Hilt,Eric
TI  - Wall Street's First Corporate Governance Crisis: The Panic of 1826
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14892
PY  - 2009
Y2  - April 2009
UR  - http://www.nber.org/papers/w14892
L1  - http://www.nber.org/papers/w14892.pdf
N1  - Author contact info:
Eric Hilt
Wellesley College
Department of Economics
106 Central Street
Wellesley, MA 02481
Tel: 781/283-2986
Fax: 781/283-2177
E-Mail: ehilt@wellesley.edu
AB  - In July of 1826, several prominent Wall Street firms abruptly went bankrupt, amid scandalous revelations of fraudulent financial practices by their management. Although mostly forgotten today, these events represented a watershed in the early development of the corporation laws and investor protections governing Wall Street: in the aftermath of the scandals, New York State enacted an extensive package of legislation designed to protect the interests of investors. These statutes were some of the the very first of their kind, and had a lasting influence. This paper analyzes the causes of the failures, and the evolution of the law in response. The analysis highlights the critical role played by scandal-driven legislation in the evolution of investor protections and financial regulations.
ER  -