Wall Street's $2.7 billion spelling mistake

Trivia of the Day

In 1962, which Wall Street firm accidentally printed dividend checks with an extra zero, overpaying shareholders by $2.7 million before anyone noticed?

1. Merrill Lynch
2. E.F. Hutton
3. Dean Witter
4. Paine Webber

Answer: E.F. Hutton — E.F. Hutton's check-printing error was discovered only when a sharp-eyed recipient called to ask if the windfall was real; the firm spent six weeks politely asking 1,800 clients to return the overpayments, and 96% did. The incident cost more in embarrassment than money—though adjusted for inflation, that's roughly $27 million today—and became an inside joke on the Street about the perils of automating dividend processing in the early computer age. It mattered because it exposed how little redundancy existed in back-office operations; within five years, every major brokerage had implemented dual-entry verification for payment systems, a safeguard we now take for granted.

Word of the Day

scripophily noun · scrip-AH-fill-ee

The collection and study of old stock certificates and bonds, especially those rendered worthless by bankruptcy or obsolescence. From Greek 'skripo' (writing) and 'philos' (love), the term emerged in the 1970s when collectors began hunting ornate railroad and mining certificates in estate sales, prizing them for their engraved vignettes of steam locomotives and allegorical figures representing Commerce and Industry.

“His scripophily obsession began with a framed Penn Central bond he found in a thrift store; twenty years later, his collection included certificates signed by Rockefeller, Carnegie, and a dozen robber barons whose empires had turned to dust. She practiced scripophily as economic archaeology, reading fortunes and failures in the flourishes of nineteenth-century penmanship.”

Joke of the Day

Why did the merger arbitrageur refuse to play chess?

He couldn't stand a game where hostile takeovers were actually illegal.

This Day in History

1775 — The Continental Congress issued the first Continental Currency notes on this day, printing $2 million in bills to finance the Revolutionary War. Backed by nothing but the promise of future tax revenue from colonies that didn't yet legally exist as a nation, the notes depreciated so catastrophically that by 1781 they traded at 500-to-1 against hard money, giving us the phrase 'not worth a Continental.' The hyperinflation taught the Founders a searing lesson about fiat currency; when they drafted the Constitution twelve years later, they gave Congress the power to coin money but said nothing about printing paper, an omission that would haunt American monetary policy for the next century.