In his new book about the stock-market crash of 1929, the journalist Andrew Ross Sorkin recounts a scene from a summer day that year in Manhattan. The dining room of the Plaza Hotel came to attention, he writes, when top figures from Wall Street and the business world trickled in for Saturday lunch. The presence of such a crowd might not have created a stir at another historical moment, but these were not typical times. The nation was infatuated with the market, which was showering wealth on investors big and small.

Several of these boldface names, including the esteemed leaders of big banks, had a history of joining forces in market-manipulation schemes that were not a well-kept secret. Together, major players would form a pool and bid up a stock through “wash trades” with one another, c

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