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Death on Wall Street, Fact and Rumor

POSTED: 05:10 PM ET, 01/22/2009 by Derek Kravitz

A long line of jobless and homeless men wait outside to get free dinner at New York's municipal lodging house in the winter of 1932-33 during the Great Depression. (AP Photo)

One of the enduring myths from the 1929 stock market crash is that scores of financially-ruined bankers leaped to their deaths from New York skyscrapers. It turns out that there were probably only a couple of such crash-related leaps.

But financial ruin does sometimes provoke desperate men and women into desperate acts, and the current economic panic is no exception.

Take the case of Rene-Thierry Magon de la Villehuchet, a French hedge fund manager whose firm was exposed to $1.4 billion in losses through its investments with Bernard Madoff, the Wall Street magnate charged with securities fraud after confessing to his sons that his company was a giant Ponzi scheme.

Just before Christmas -- two weeks after Madoff was charged -- Villehuchet was found dead by New York City police at his Madison Avenue office. He was at his desk with his wrists cut, apparently with a box cutter. Sleeping pills were found nearby.

A friend, who declined to be identified, told Agence France Presse that Villehuchet was "devastated" and feared his clients would turn against him in the courts.

"Access was his whole life, and Madoff was a manager in whom he had complete trust," the friend said. "I lunched with him two weeks ago and he said, how lucky it was that Madoff was the only manager still doing well at the moment."

In another case two weeks ago, an Indiana financial adviser tried to fake his own death authorities say, by parachuting out of his plane as it crashed into a swampy area of north Florida.

Police combed the woods of Alabama and Florida looking for 38-year-old Marcus Shrenker, an Indianapolis pilot and president of Heritage Wealth Management.

Shrenker, dogged in recent weeks by a host of personal and legal problems, was caught several days later at a campground, after having slashed his wrists in an apparent suicide attempt (he has since pleaded not guilty to charges of deliberately crashing his airplane and making a false distress call).

Then there is Arthur G. Nadel, a 76-year-old hedge-fund manager from Sarasota, Fla. He was charged yesterday with fraud, after authorities say he took some $350 million in investors' money.

In a suicide note he left at home, Nadel described "extreme guilt he was feeling over business actions that he had taken which resulted in the loss of other people's money," a sheriff's deputy wrote in a report obtained by the Sarasota Herald Tribune.

Of course, the full toll of the Panic of '08 and '09 won't be known for awhile. But based on what happened in the Great Depression, the tales may become exaggerated over time. notes that between the October 1929 stock crash and the end of that year, four of the 100 suicides and suicide attempts reported in The New York Times were linked to the crash. And only two were actual jumps:

Hulda Borowski, a 51-year-old bond clerk at a Broadway firm, jumped 40 stories to her death from the roof of the old Equitable Building. "Her employers said she had been near exhaustion from overwork," said a New York Times story from Nov. 8, 1929.

From the article:

None saw the woman's body leave the roof but Joseph Marquis, an office boy, who said he had noticed Mrs. Borowski sitting on a platform about two feet below the parapet on the roof at 10:05 a.m. while he was playing outside, the Bankers' Club with other boys. He had just returned to his office when he heard that a woman had fallen to death from the roof.

Patrolman Cannon of the Old Slip Station saw the body strike the curbstone in front of 80 Cedar Street, narrowly missing pedestrians. He summoned an ambulance and, aided by other policemen, held back the crowd until an ambulance arrived and detectives began an investigation.

Eight days later, George E. Cutler, a well-known head of the produce firm, jumped from the seventh floor of the Munson Building at Wall and Beaver streets. Cutler had been at a law office in the building and became frustrated when an attorney he wanted to speak to was not available.

From the article:

After repeating several times his demands that he be permitted to see Mr. Fox, he went to a window overlooking Beaver Street, thrust it up and climbed out on a ledge. Robert Hawthorne of 33-05 North 168th Street, Flushing, another attorney in the office, tried to pull him back into the room. A scuffle ensued on the ledge, 100 feet above the street.

For a moment the men fell apart, then Mr. Cutler lunged over the ledge. Mr. Hawthorne seized the tail of his coat, but his grip broke. Cutler's body crashed on to an automobile with New Jersey license plates parked near the junction of Wall, Pearl and Beaver Streets, and bounded to pavement.

Still, even the day after the initial stock drop on Black Thursday (two more drops would follow), rumors about suicidal investors abounded.

"Rumors, most of them wild and false, spread throughout the Wall Street district and thence throughout the country," read a New York Times story from Oct. 25, 1929. "One of the reports was that eleven speculators had committed suicide. A peaceful workman atop a Wall Street building looked down and saw a big crowd watching him, for the rumor had spread that he was going to jump off."

By Derek Kravitz |  January 22, 2009; 5:10 PM ET Economy Watch
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