Pecora Hearings
Because of the 1929 market crash a remarkable banking investigation, which was conducted between1932 and 1934, caught the attention of the USA and the world community. The hearing was called Pecora hearing named after Ferdinand Pecora, Sicilian-born assistant district attorney of New York City.
Pecora conducted the investigation by calling a line of family names from the financial aristocracy before the Senate Committee on Banking and Currency. Among others, the following entities and individuals appeared before the hearing. Those are Charles Mitchell of National City Bank, Albert Wiggin of the Chase National Bank, Clarence Dillon of Dillon, Read, and Company, Richard E. Whitney, president of the New York Stock Exchange, Samuel Insull, utility company magnate, Otto Kahn of Kuhn, Loeb, and Company. At the height of the investigation, Pecora summoned J.P. Morgan Jr., the world’s most powerful…show more content… Pecora learned that the well-regarded Boston investment bank Lee, Higginson sold $250 million in shares of companies owned by Ivar Kreuger. The stock was worthless, and Kreuger subsequently committed suicide in Paris in 1932. Lee, Higginson had neither examined Kreuger’s fraudulent books nor had it checked his guarantee. Stocks were buttressed up until the original investors had gotten out all the money they could, then sold to the average investor, and finally rudely allowed to drop. Pecora wrote about the manipulations. ‘The bigger the issue, the more money the bankers make.’
It was also learned that Albert Wiggins, chairman of Chase National Bank, openly amalgamated his own finances with his banks, disguising his stock speculations through a series of family-owned corporations. It was revealed that he earned $4 million in profit financing a bear raid on his own stock, using an $8 million loan from his company, even as he led a group of bankers who struggled to stabilize the market after the crash of