When he declared bankruptcy, he owed approximately $6.5 million
Richard Whitney was born into a wealthy Boston, Massachusetts, family on 1 August 1888. In 1910 he moved to New York where he founded his own bond brokerage firm and, two years later, bought a seat on the New York Stock Exchange. In 1919 he joined the board of the Stock Exchange where he quickly became its vice-president and, in 1930, its president. His brother George was doing well at J.P. Morgan & Co where he was expected to succeed bank president, Thomas W Lamont.
However, it became apparent that far from being a brilliant banker Richard Whitney was losing money hand over fist. He had speculated on a number of investments that had failed and was forced to borrow large sums of money from his brother and other wealthy friends. By 1931 Whitney was at least $2 million in debt, but he kept up his opulent lifestyle. If he couldn’t borrow, he stole. Whitney took money from the New York Stock Exchange Gratuity Fund, the New York Yacht Club where he was the treasurer, plus an additional $800,000 of bonds from his father-in-law’s estate. In 1935 he retired as president of the New York Stock Exchange but remained on the board of directors.
New York City, USA
On 8 March 1938 the comptroller of New York Stock Exchange reported that Whitney’s company was insolvent and that, in addition, he had been stealing money from the Exchange. When the final investigations were made public, it was estimated that Whitney had “borrowed” more than $30 million from his friends, his family and the accounts in his trust. When he declared bankruptcy, he owed approximately $6.5 million. On 10 March 1938 New York County District Attorney, Thomas E. Dewey, charged him with embezzlement. A grand jury recommended that he be brought to trial. Whitney was arrested and pleaded guilty, receiving a sentence of 5-10 years in Sing Sing. On 12 April more than 6,000 people watched as Whitney was taken to jail from Grand Central Station by armed guards. George Whitney eventually repaid all the money his brother had stolen. Richard Whitney was released on parole in August 1941 after serving three years and four months in Sing Sing. He died on 5 December 1974.