Michael J. Meehan (1891–1948) was a stock trader on

Wall St Wall Street is an eight-block-long street in the Financial District of Lower Manhattan in New York City. It runs between Broadway in the west to South Street and the East River in the east. The term "Wall Street" has become a metonym for ...

during the 1920s and 1930s. The

Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against mark ...

(SEC) forced him out of trading in 1935 as the first individual they prosecuted. During the Great Depression he purchased a controlling stake in the Good Humor ice cream company.

Background

Meehan was born in

Blackburn Blackburn () is an industrial town and the administrative centre of the Blackburn with Darwen borough in Lancashire, England. The town is north of the West Pennine Moors on the southern edge of the Ribble Valley, east of Preston and nort ...

England England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe ...

in 1892, but grew up in

Manhattan Manhattan (), known regionally as the City, is the most densely populated and geographically smallest of the five Boroughs of New York City, boroughs of New York City. The borough is also coextensive with New York County, one of the List of co ...

. After attending public schools in New York, he became a theater ticket seller on Wall Street. As a ticket broker in New York's financial district, brokers requested the best Broadway seats available. After six years as a ticket broker, Meehan used his connections to get himself a seat on the New York Curb Exchange. Three years later he had saved $90,000 to purchase a seat on the

New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed ...

(NYSE).

Good Humor

Meehan was an early investor in the Good Humor ice cream company. In what some call nothing more than a favor, he invested in the company as a favor to an old friend, the father-in-law of the franchise own, Tom Brimer. During the stock market Crash of 1929, when most other stocks lost their value, Good Humor paid high

dividends A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-i ...

. This brought the company to the attention of Meehan and he purchased a controlling stake in the company.

SEC fraud

In 1935, Meehan planned to manipulate the stock price of Bellanca Aircraft. Meehan used the strategy of 'matched orders' which had him manipulating the volume of the stock by frequently buying and selling the issue. By increasing the volume, Meehan believed he could generate interest in the company. Within a few months, the public had followed Meehan into Bellanca and pushed the share price up from $1.75 to $5.50. After Meehan completed his manipulation and sold the stock, the shares fell to their original price. The Securities and Exchange Commission (SEC) decided to prosecute Meehan under the new Securities Exchange Act. This would be the first punitive action taken by the SEC. The commission expelled Meehan from his seats on the NYSE, and also on the Curb Exchange and Chicago Board of Trade.

References

{{DEFAULTSORT:Meehan, Michael J. 1892 births 1948 deaths People from Blackburn Businesspeople from New York City American stock traders British emigrants to the United States 20th-century American businesspeople