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Price manipulation at the NYSE and the 1899 battle for Brooklyn Rapid Transit shares

Published online by Cambridge University Press:  05 November 2013

Timothy A. Kruse  and
Steven K. Todd
Timothy A. Kruse*
Affiliation:
Xavier University
Steven K. Todd*
Affiliation:
Loyola University Chicago
*
Corresponding author: T. Kruse, Department of Finance, Xavier University, 3800 Victory Parkway, Cincinnati, OH 45207-5162, USA, [email protected].
S. K. Todd, Department of Finance, Loyola University, 820 North Michigan Avenue, Chicago, IL 60611, USA, [email protected].
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Abstract

In 1899, James Keene, a prominent bear, and Roswell Flower, a well-known bull, both attempted to manipulate the share price of Brooklyn Rapid Transit (BRT), a young commuter railway company. Flower and Keene were stock ‘operators’, who used pools of cash from like-minded investors to push share prices higher or lower. In their efforts to garner profits, BRT operators claimed insider status, planted rumors in the press, used leverage to accumulate large positions, manipulated borrowing costs and camouflaged trades. The events of 1899 can shed light on current market dynamics, and we draw parallels between the predatory trading strategies used in 1899 and those of today.

Keywords

financial market historystock operatorsbull manipulationbear raid

JEL classification

G10: General G01: Financial Crises N41: U.S. • Canada: Pre-1913 N21: U.S. • Canada: Pre-1913
Type
Articles
Information
Financial History Review , Volume 20 , Issue 3 , December 2013 , pp. 279 - 303
Copyright
Copyright © European Association for Banking and Financial History e.V. 2013 

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