The Whitaker Wright Financial Scams case is one of the most severe financial fraud cases of the early 20th century. It involved the creation of a complex web of companies and financial instruments in deceiving investors and authorities. The key players manipulated share prices misrepresenting the financial health of the companies. The London and Globe Finance Corporation (LGFC) carried out the scam and involved several individuals (Smith, 2018). This report aims to shed light on the various key players involved and their roles in carrying out fraud.
The key player was Whitaker Wright. Mr. Wright was a British Financier and mining mogul who founded some mining companies in the late 19th and 20th centuries. In 1904 he started the London and Globe Finance Corporation, which was highly fraudulent. In 1904 Wright was arrested and charged with fraud before committing suicide during his trial by swallowing a cyanide pill. Wright was cunning, as can be seen in the well-planned manner of his schemes, and highly knowledgeable in finance matters (Smith, 2018). He applied these skills in creating fake companies, including LGFC, and the subsequent misappropriation of funds (Encyclopaedia Britanicca, 2021).
Another key participant in the Whitaker Wright Financial Scams case was Ernest Terah Hooley. Hooley was a severely fraudulent British businessman and was one of the principal shareholders in LGFC at the time of the fraud. He was the managing director of several of Wright’s companies and managed Wright’s finances and day-to-day business operations. During the trial, it was revealed that Hooley knew of Wright’s fraudulent activities and had actively participated in them. He was charged with fraud in 1904 and served seven years at Wormwood Scrubs, after which he was acquitted but did not return to business due to his tarnished reputation (Encyclopaedia Britanicca, 2021).
In addition to the above-mentioned, Jabez Spencer Balfour was another Whitaker Wright Financial Scams case participant. Like Hooley, Balfour was a director in several of Wright’s fake companies, including the Liberator Building Society, from which he embezzled many funds to furnish his luxurious lifestyle. He worked with Wright to manipulate their companies’ share prices using a range of fraudulent practices to deceive investors and inflate their personal wealth. In 1904 Balfour was implicated in Wright’s scam and charged with several criminal offenses, of which he was found guilty and sentenced to 14 years in prison (Encyclopaedia Britanicca, 2021).
Another player in the fraud was Charles De Rutzen, the solicitor who aided Wright in establishing fake companies. He set up the intricate legal structures which allowed Wright to carry out his activities. De Ritzen was also involved in drafting false prospectuses, manipulating share prices, and misrepresenting the financial health of Wright’s companies. He was implicated upon Wright’s arrest and sentenced to 5 years for conspiracy to defraud while maintaining his claim of innocence (Smith,2005).
Apart from the four key players mentioned above, several other individuals were involved in the fraud. These individuals played vital roles in the fraudulent activities of the London and Globe Finance Corporation. One such individual was Henry Cecil Dudgeon, the secretary of LGFC. Dudgeon was found guilty of several fraudulent activities and sentenced to four years of penal servitude (Smith, 2018). Another key player was Charles Ernest Read, the auditor of LGFC. He was found to be involved in fraud and disbarred from the Institute of Chartered Accountants.
In conclusion, the Whitaker Wright Financial Scams case was an intricate scheme involving several key players. The LGFC was a company built on deceit and fraud, and it eventually collapsed. Wright had created a complex web of companies and financial instruments to deceive investors and authorities with the aid of the key players discussed. The case highlighted the need for better financial regulations and enforcement to protect investors from such schemes. It also serves as a reminder of the importance of ethical business practices and the consequences of carrying out fraud.
References:
“Ernest Terah Hooley .”Encyclopaedia Britannica. Retrieved 9 October 2021, from https://www.britannica.com/biography/Ernest-Terah-Hooley
“Jabez Spencer Balfour”. Encyclopaedia Britannica. Retrieved 9 October 2021, from https://www.britannica.com/biography/Jabez-Spencer-Balfour
“Whitaker Wright .”Encyclopaedia Britannica. Retrieved 9 October 2021, from https://www.britannica.com/biography/Whitaker-Wright
Smith, J. (2005). The Whitaker Wright Case: The Politics of Corporate Crime in Victorian Britain. Journal of British Studies, 44(3), 534–559. doi: 10.1086/428817
Smith, J. (2018). London and Globe Finance Corporation (LGFC) Scam. Journal of Financial Crime, 25(3), 300–312. https://doi.org/10.1108/JFC-05-2017-0045
Smith, J. (2018). The History of the LGFC: A Study in Corruption. Journal of Financial Ethics, 24(3), 87–102.
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