On March 8, 1938, the New York Stock Exchange (NYSE) suspended trading at 10:05 a.m., only five minutes after the start of their trading day. At that time, NYSE President Charles Gay took to the podium to announce that former NYSE President Richard Whitney’s company had been declared insolvent.
Whitney was serving as vice president of the NYSE during Black Thursday in 1929. He tried to stop the Wall Street Crash of 1929 by purchasing stocks in U.S. Steel and other blue chip stocks at prices will above their current market prices. While his actions did stop the market from sliding any further that day, it was not enough to stop the crash completely.
As it turns out, Whitney was making quite a few speculative investments during his career, many of which caused him to lose considerable amounts of money. He borrowed heavily from his brother, but when that wasn’t enough, he began embezzling from the New York Stock Exchange Gratuity Fund, the New York Yacht Club and his father-in-law’s estate. Whitney was charged with embezzlement on March 10, 1938 and sentenced to five to 10 years at Sing Sing prison. He was let out on parole for good behavior after only three years and four months.