Ferdinand Pecora
Encyclopedia
Ferdinand Pecora was an American
lawyer
and judge
who became famous in the 1930s as Chief Counsel to the United States Senate
Committee on Banking and Currency during its investigation of Wall Street banking and stock brokerage practices.
, the son of Louis Pecora and Rosa Messina, who emigrated
to the United States in 1886. He grew up in Chelsea on the west side of Manhattan. After briefly studying for the Episcopal ministry, Pecora was forced to leave school as a teenager when his father was injured in an industrial accident. After securing a job as a clerk in a Wall Street law firm, Pecora eventually attended New York Law School
and became a member of the New York bar in 1911. Originally a Progressive Republican, Pecora became a member of the Democratic Party and Tammany Hall
in 1916. In 1918, he was appointed as an assistant district attorney
in New York City. Over the next twelve years, Pecora earned a reputation in the city as an honest and talented prosecutor. Although he had little experience with Wall Street, Pecora helped shut down more than 100 bucket shop
s.
In 1922, Pecora was named chief assistant district attorney, the number-two man in the office under the newly elected Joab H. Banton
. In 1929, Banton chose Pecora as his heir apparent, but Tammany Hall refused to nominate him, fearing that the honest Pecora might bring prosecutions against its members. Pecora left the district attorney's office for private practice, where he remained until 1933.
presidency by its outgoing Republican chairman, Peter Norbeck
, and continued under Democratic chairman Duncan Fletcher
, following the 1932 election that swept Franklin D. Roosevelt
into the U.S. presidency
and gave the Democratic Party
control of the Senate.
The Senate committee hearings that Pecora led probed the causes of the Wall Street Crash of 1929
that launched a major reform of the American financial system. Pecora, aided by John T. Flynn
, a journalist, and Max Lowenthal
, a lawyer, personally undertook many of the interrogations during the hearings, including such Wall Street
personalities as Richard Whitney
, president of the New York Stock Exchange
, George Whitney (a partner in J.P. Morgan & Co.
) and investment bankers Thomas W. Lamont
, Otto H. Kahn
, Albert H. Wiggin
of Chase National Bank, and Charles E. Mitchell
of National City Bank (now Citibank
). Because of Pecora's work, the hearings soon acquired the popular name the Pecora Commission
, and Time magazine featured Pecora on the cover of its June 12, 1933 issue.
Pecora's investigation unearthed evidence of irregular practices in the financial markets that benefited the rich at the expense of ordinary investors, including exposure of Morgan’s “preferred list” by which the bank’s influential friends (including Calvin Coolidge
, the former president, and Owen J. Roberts, a justice of Supreme Court of the United States
) participated in stock offerings at steeply discounted rates. He also revealed that National City sold off bad loans to Latin American countries by packing them into securities and selling them to unsuspecting investors, that Wiggin had shorted Chase shares during the crash, profiting from falling prices, and that Mitchell and top officers at National City had received $2.4 million in interest-free loans from the bank’s coffers.
Spurred by these revelations, the United States Congress
enacted the Glass–Steagall Act, the Securities Act of 1933
and the Securities Exchange Act of 1934
. With the United States in the grips of the Great Depression
, Pecora's investigations highlighted the contrast between the lives of millions of Americans in abject poverty and the lives of such financiers as J.P. Morgan, Jr.; under Pecora's questioning, Morgan and many of his partners admitted that they had paid no income tax in 1931 and 1932; they explained their failure to pay taxes by reference to their losses in the stock market's decline.
for Mayor of New York City. Returning to the practice of law, Pecora represented such major clients as Warner Bros. Pictures Distributing Corporation
, et al. as respondents before the United States Supreme Court in the 1954 case, Theatre Enterprises v. Paramount
, 346 U.S. 537.
Ferdinand Pecora died in 1971.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
lawyer
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
and judge
Judge
A judge is a person who presides over court proceedings, either alone or as part of a panel of judges. The powers, functions, method of appointment, discipline, and training of judges vary widely across different jurisdictions. The judge is supposed to conduct the trial impartially and in an open...
who became famous in the 1930s as Chief Counsel to the United States Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
Committee on Banking and Currency during its investigation of Wall Street banking and stock brokerage practices.
Early career
Ferdinand Pecora was born in Nicosia, SicilySicily
Sicily is a region of Italy, and is the largest island in the Mediterranean Sea. Along with the surrounding minor islands, it constitutes an autonomous region of Italy, the Regione Autonoma Siciliana Sicily has a rich and unique culture, especially with regard to the arts, music, literature,...
, the son of Louis Pecora and Rosa Messina, who emigrated
Emigre
Emigre, also known as Emigre Graphics, is a digital type foundry, publisher and distributor of graphic design centered information based in Berkeley, California, that was founded in 1984 by husband-and-wife team Rudy VanderLans and Zuzana Licko. The type foundry also published Emigre magazine...
to the United States in 1886. He grew up in Chelsea on the west side of Manhattan. After briefly studying for the Episcopal ministry, Pecora was forced to leave school as a teenager when his father was injured in an industrial accident. After securing a job as a clerk in a Wall Street law firm, Pecora eventually attended New York Law School
New York Law School
New York Law School is a private law school in the TriBeCa neighborhood of Lower Manhattan in New York City. New York Law School is one of the oldest independent law schools in the United States. The school is located within four blocks of all major courts in Manhattan. In 2011, New York Law School...
and became a member of the New York bar in 1911. Originally a Progressive Republican, Pecora became a member of the Democratic Party and Tammany Hall
Tammany Hall
Tammany Hall, also known as the Society of St. Tammany, the Sons of St. Tammany, or the Columbian Order, was a New York political organization founded in 1786 and incorporated on May 12, 1789 as the Tammany Society...
in 1916. In 1918, he was appointed as an assistant district attorney
District attorney
In many jurisdictions in the United States, a District Attorney is an elected or appointed government official who represents the government in the prosecution of criminal offenses. The district attorney is the highest officeholder in the jurisdiction's legal department and supervises a staff of...
in New York City. Over the next twelve years, Pecora earned a reputation in the city as an honest and talented prosecutor. Although he had little experience with Wall Street, Pecora helped shut down more than 100 bucket shop
Bucket shop (stock market)
As defined by the U.S. Supreme Court a Bucket shop is "[a]n establishment, nominally for the transaction of a stock exchange business, or business of similar character, but really for the registration of bets, or wagers, usually for small amounts, on the rise or fall of the prices of stocks, grain,...
s.
In 1922, Pecora was named chief assistant district attorney, the number-two man in the office under the newly elected Joab H. Banton
Joab H. Banton
Joab Hamilton Banton was New York County District Attorney from 1922 to 1929.-Life:...
. In 1929, Banton chose Pecora as his heir apparent, but Tammany Hall refused to nominate him, fearing that the honest Pecora might bring prosecutions against its members. Pecora left the district attorney's office for private practice, where he remained until 1933.
Washington
Ferdinand Pecora was appointed Chief Counsel to the U.S. Senate's Committee on Banking and Currency in January 1933, the last months of the Herbert HooverHerbert Hoover
Herbert Clark Hoover was the 31st President of the United States . Hoover was originally a professional mining engineer and author. As the United States Secretary of Commerce in the 1920s under Presidents Warren Harding and Calvin Coolidge, he promoted partnerships between government and business...
presidency by its outgoing Republican chairman, Peter Norbeck
Peter Norbeck
Peter Norbeck served as the ninth Governor of South Dakota, and as a United States Senator. Norbeck was the first Governor of South Dakota to have been born within the borders of the state.-Biography:...
, and continued under Democratic chairman Duncan Fletcher
Duncan U. Fletcher
Duncan Upshaw Fletcher was an American lawyer and politician of the Democratic Party. Senator Fletcher was the longest serving U.S. Senator in Florida's history.-Early life and career:...
, following the 1932 election that swept Franklin D. Roosevelt
Franklin D. Roosevelt
Franklin Delano Roosevelt , also known by his initials, FDR, was the 32nd President of the United States and a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war...
into the U.S. presidency
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
and gave the Democratic Party
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
control of the Senate.
The Senate committee hearings that Pecora led probed the causes of the Wall Street Crash of 1929
Wall Street Crash of 1929
The Wall Street Crash of 1929 , also known as the Great Crash, and the Stock Market Crash of 1929, was the most devastating stock market crash in the history of the United States, taking into consideration the full extent and duration of its fallout...
that launched a major reform of the American financial system. Pecora, aided by John T. Flynn
John T. Flynn
John Thomas Flynn was an American journalist best known for his opposition to President Franklin D. Roosevelt and to American entry into World War II.-Career:...
, a journalist, and Max Lowenthal
Max Lowenthal
Max Lowenthal was a Washington, DC political figure through the 1930s and 40's. During his early days in politics he was an advisor to several United States senators including Harry S. Truman. Many of Lowenthal's accomplishments are presumed unknown as some are being discovered through...
, a lawyer, personally undertook many of the interrogations during the hearings, including such Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
personalities as Richard Whitney
Richard Whitney (financier)
Richard Whitney was an American financier, president of the New York Stock Exchange from 1930 to 1935, and a convicted embezzler.-Biography:He was born on August 1, 1888 in Boston, Massachusetts to George Whitney, Sr....
, president of the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
, George Whitney (a partner in J.P. Morgan & Co.
J.P. Morgan & Co.
J.P. Morgan & Co. was a commercial and investment banking institution based in the United States founded by J. Pierpont Morgan and commonly known as the House of Morgan or simply Morgan. Today, J.P...
) and investment bankers Thomas W. Lamont
Thomas W. Lamont
Thomas William Lamont, Jr. was an American banker.- Biography :Lamont was born in Claverack, New York. He graduated from Phillips Exeter Academy in 1888 and earned his degree from Harvard University in 1892. He became a generous benefactor of the school once he had amassed a fortune, notably...
, Otto H. Kahn
Otto Hermann Kahn
Otto Hermann Kahn was an investment banker, collector, philanthropist, and patron of the arts.-Life and career:He was born on February 21, 1867, and raised in the city of Mannheim, Germany, to Jewish parents...
, Albert H. Wiggin
Albert H. Wiggin
thumb|Wiggin, circa 1913Albert Henry Wiggin was an American banker.Born in the town of Medfield, Massachusetts, Albert Wiggin was the son of a Unitarian minister and a cousin of Arthur Francis Holme Wiggin CMG. At age seventeen, he went to work for a Boston bank and in 1892 he married Jessie...
of Chase National Bank, and Charles E. Mitchell
Charles E. Mitchell
Charles Edwin Mitchell was an American banker whose incautious securities policies facilitated the speculation which led to the Crash of 1929...
of National City Bank (now Citibank
Citibank
Citibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
). Because of Pecora's work, the hearings soon acquired the popular name the Pecora Commission
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...
, and Time magazine featured Pecora on the cover of its June 12, 1933 issue.
Pecora's investigation unearthed evidence of irregular practices in the financial markets that benefited the rich at the expense of ordinary investors, including exposure of Morgan’s “preferred list” by which the bank’s influential friends (including Calvin Coolidge
Calvin Coolidge
John Calvin Coolidge, Jr. was the 30th President of the United States . A Republican lawyer from Vermont, Coolidge worked his way up the ladder of Massachusetts state politics, eventually becoming governor of that state...
, the former president, and Owen J. Roberts, a justice of Supreme Court of the United States
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
) participated in stock offerings at steeply discounted rates. He also revealed that National City sold off bad loans to Latin American countries by packing them into securities and selling them to unsuspecting investors, that Wiggin had shorted Chase shares during the crash, profiting from falling prices, and that Mitchell and top officers at National City had received $2.4 million in interest-free loans from the bank’s coffers.
Spurred by these revelations, the United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
enacted the Glass–Steagall Act, the Securities Act of 1933
Securities Act of 1933
Congress enacted the Securities Act of 1933 , in the aftermath of the stock market crash of 1929 and during the ensuing Great Depression...
and the Securities Exchange Act of 1934
Securities Exchange Act of 1934
The Securities Exchange Act of 1934 , , codified at et seq., is a law governing the secondary trading of securities in the United States of America. It was a sweeping piece of legislation...
. With the United States in the grips of the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
, Pecora's investigations highlighted the contrast between the lives of millions of Americans in abject poverty and the lives of such financiers as J.P. Morgan, Jr.; under Pecora's questioning, Morgan and many of his partners admitted that they had paid no income tax in 1931 and 1932; they explained their failure to pay taxes by reference to their losses in the stock market's decline.
Later life
After Pecora closed his investigations, on July 2, 1934, President Roosevelt appointed Ferdinand Pecora a Commissioner of the newly formed U.S. Securities and Exchange Commission (SEC). In 1939 Pecora wrote a book about the Senate investigations titled Wall Street Under Oath: The Story of Our Modern Money Changers. On January 21, 1935, Pecora resigned from the SEC and became a judge of the New York State Supreme Court, a position he held until 1950, when he ran unsuccessfully against Vincent R. ImpellitteriVincent R. Impellitteri
Vincent Richard Impellitteri was an American politician, who served as the 101st Mayor of New York City.-Biography:He was born in Isnello, Sicily, and moved with his family to the United States as an infant in 1901...
for Mayor of New York City. Returning to the practice of law, Pecora represented such major clients as Warner Bros. Pictures Distributing Corporation
Warner Bros.
Warner Bros. Entertainment, Inc., also known as Warner Bros. Pictures or simply Warner Bros. , is an American producer of film and television entertainment.One of the major film studios, it is a subsidiary of Time Warner, with its headquarters in Burbank,...
, et al. as respondents before the United States Supreme Court in the 1954 case, Theatre Enterprises v. Paramount
Paramount Pictures
Paramount Pictures Corporation is an American film production and distribution company, located at 5555 Melrose Avenue in Hollywood. Founded in 1912 and currently owned by media conglomerate Viacom, it is America's oldest existing film studio; it is also the last major film studio still...
, 346 U.S. 537.
Ferdinand Pecora died in 1971.
Further reading
There is a brief entry for Pecora in the Dictionary of American National Biography (Oxford University Press, 1999).External links
- Chernow, R.:"Where Is Our Ferdinand Pecora?", "The New York TimesThe New York TimesThe New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
", Retrieved on 2009-01-06.
- Lewis, Stephen.: Investigating the Financial Crisis and My Passion for Borsalino Hats, recalling a personal encounter with Judge Pecora. Retrieved on 2009-01-09.