''United States v. Morgan'', 118 F. Supp. 621 (S.D.N.Y. 1953), more commonly referred to as the Investment Bankers Case was a multi-year
antitrust case brought by the
United States Justice Department
The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United State ...
against seventeen of the most prominent
Wall Street investment banking firms, known as the Wall Street Seventeen.
[A financial history of the United States Vol. 3]
M.E. Sharpe, 2002
Facts
The Justice Department filed suit against the firms in 1947 claimed that the leading investment banking firms had combined, conspired and agreed, in violation of the
Sherman Antitrust Act
The Sherman Antitrust Act of 1890 (, ) is a United States antitrust law which prescribes the rule of free competition among those engaged in commerce. It was passed by Congress and is named for Senator John Sherman, its principal author.
...
, to control and monopolize the U.S. Securities markets.
The 17 Wall Street firms named as defendants in the case, later known as the "Wall Street Seventeen" were as follows:
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Morgan Stanley & Co.
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Kidder Peabody
Kidder, Peabody & Co. was an American securities firm, established in Massachusetts in 1865. The firm's operations included investment banking, brokerage, and trading.
The firm was sold to General Electric in 1986. Following heavy losses, it was ...
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Goldman Sachs
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White Weld & Co.
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Dillon Read & Co.
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Drexel & Co.
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First Boston Corporation : ''For the company after its acquisition by Credit Suisse, see Credit Suisse First Boston (known as CSFB and CS First Boston)''
The First Boston Corporation was a New York-based bulge bracket investment bank, founded in 1932 and acquired by Cr ...
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Smith Barney & Co.
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Kuhn, Loeb & Co.
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Lehman Brothers
Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, a ...
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Blyth & Co.
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Eastman Dillon & Co.
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Harriman Ripley
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Stone & Webster Securities Corp.
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Harris, Hall & Co.
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Glore, Forgan & Co.
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Union Securities Corp.
Excluded from the case were a number of prominent Wall Street firms including
Bache & Co.,
Halsey Stuart & Co.,
Merrill Lynch, Pierce, Fenner & Beane and
Salomon Brothers & Hutzler among others.
Judgment
The case, which was brought to trial in the
Southern District of New York
The United States District Court for the Southern District of New York (in case citations, S.D.N.Y.) is a federal trial court whose geographic jurisdiction encompasses eight counties of New York State. Two of these are in New York City: New ...
in 1952 was presided over by the controversial and politically conservative Federal judge
Harold Medina
Harold Raymond Medina (February 16, 1888 – March 14, 1990) was a United States circuit judge of the United States Court of Appeals for the Second Circuit and previously was a United States district judge of the United States District Court for ...
, who had become internationally infamous for his rulings in the 1949
Smith Act trials of Communist Party leaders
The Smith Act trials of Communist Party leaders in New York City from 1949 to 1958 were the result of Federal government of the United States, US federal government prosecutions in the postwar period and during the Cold War between the Soviet Uni ...
.
In October 1953, after a year-long trial, Medina found in favor of the investment banking firms. In his judgment, he saw "a constantly changing panorama of competition among the seventeen defendant firms."
See also
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Pujo Committee
The Pujo Committee was a United States congressional subcommittee in 1912–1913 that was formed to investigate the so-called "money trust", a community of Wall Street bankers and financiers that exerted powerful control over the nation's finance ...
*
Pecora Commission
The Pecora Investigation was an inquiry begun on March 4, 1932, by the United States Senate Committee on Banking and Currency to investigate the causes of the Wall Street Crash of 1929. The name refers to the fourth and final chief counsel for th ...
References
External links
* {{caselaw source
, case = ''United States v. Morgan'', 118 F. Supp. 621 (S.D.N.Y. 1953)
, googlescholar = https://scholar.google.com/scholar_case?case=16272511525268880530
, justia =https://law.justia.com/cases/federal/district-courts/FSupp/118/621/2281809/
Whither Are We Bound? TIME Magazine, October 26, 1953
1953 in United States case law
United States antitrust case law
United States District Court for the Southern District of New York cases
History of banking in the United States