All old abodes have their ghosts, and Wall Street has been well lived-in since the Dutch erected a wooden stockade to guard against attack in the 17th century. With hundreds of years during which fortunes have been won, lost, lamented and despaired over, there is no shortage of restless spirits from the past. Let's look at three gory tales let loose from Wall Street's crypt.

Wall Street's Unholy Trio
During the second half of the 19th century, Jay Gould, Jim Fisk and Daniel Drew provided the archetypes for Wall Street greed and corruption. The men came from different backgrounds but shared the goal of making their fortunes on Wall Street. By pooling their capital and talents for ruthlessness, the three became hostile-takeover specialists, attacking everything from tanneries to railroads.

Between the three of them, they committed every imaginable financial atrocity upon the markets and, far from being brotherly, even turned against each other. Their most famous battles were with "Commodore" Cornelius Vanderbilt over the Erie Railroad, one of the few railroads competing against Vanderbilt's growing transport empire. During the struggle for control, Vanderbilt bought up vast numbers of shares, unaware that the trio was watering stock - literally printing additional (and illegal) stock certificates with a press in the basement.

This glut of shares devastated the company's shareholders, but buying up the endless supply proved too costly for even Vanderbilt, and he threw in his hat. While the outcome was still in doubt, Drew held secret talks with Vanderbilt in hopes of striking a private deal that would have been to Fisk's and Gould's misfortune. Alas, in retaliation, Fisk and Gould negatively manipulated the stocks in Drew's fortune and ultimately ruined him. Gould's and Fisk's victory earned them a considerable reputation, as they were the only people to tangle with Vanderbilt and come out on top.

Gould and Fisk did not stop there. With Gould now at the helm, the two gathered a group of speculators and tried to corner the gold market, resulting in the Black Friday of 1869. Duping both the short sellers and the U.S. Treasury, Gould and Fisk pushed up prices rapidly. Discovering the ruse, the government opened its vault and the price of gold plummeted within minutes, ruining everyone but Gould, who had been tipped off and failed to tell his partners.

Fisk, his fortune diminished from the drubbing of Black Friday, was eventually gunned down in a quarrel over a woman (not his wife) in 1872. Jay Gould got away with it all, and his fortune was still intact when he eventually died of natural causes. Gould's defeat of Vanderbilt and the financial havoc he wreaked during his life earned him the title of the "Mephistopheles of Wall Street."

Boesky and Siegel
As if channeling the long-dead spirits of Gould and Fisk, Martin Siegel and Ivan Boesky teamed up to become the center of one of the largest insider trading scandals to rock Wall Street. The 1980s were already a time of black knights, vulture funds and dawn raids, as the leveraged buyout (LBO) revolutionized Wall Street. To take advantage of the LBO madness, arbitrageur Boesky needed an edge. He found it in Siegel, an investment banker in the mergers-and-acquisitions side of Kidder, Peabody & Co., which became defunct in 1994. Boesky wanted tip-offs about upcoming mergers and takeovers. To that end, he sent Siegel a briefcase with $150,000 in $100 bills and the two began a "professional" relationship.

The tips were well worth the money, because Boesky made millions by buying up pre-takeover shares and unloading them after the market learned about the deals. The takeover of Carnation by Nestle (OTC:NSRGY) alone netted Boesky $28 million and, for that reason, alerted the Securities and Exchange Commission (SEC) to his activities. Siegel's firm also came under scrutiny, and Boesky and Siegel parted ways, with Siegel receiving a final pay-off from Boesky of $400,000 dropped at a phone booth. The net was already cast, however, and the SEC reeled in Siegel and Boesky along with other big criminal names, such as Michael Milken.

Siegel became a witness for the government and was let off easy with a two-month sentence and a fine, while Boesky was given three years and fined $100 million for his involvement in the scheme.

Bram Stoker's Broker
Less high profile, but all the more chilling for it, is a tale of a dishonest broker and a wealthy client. L.R. Castelein was a Belgian investor with $12.5 million that he wanted to invest in U.S.Treasury bonds. In 1997, he met with a Corporate Securities Group (CSG) broker named Douglas Reid, who promised Castelein that he would set up an account at Bear Stearns - which later suffered its own financial misfortune in 2008 - that would return 7% interest. The account was set up at CSG, not Bear Stearns, in the first of many abuses that Castelein would suffer.

After receiving the money from Castelein, Reid forged Castelein's signature to route all the account information through Reid's own office and began actively trading in the account. By churning the account for commissions and paying out large management fees to himself and a fellow banker, Reid quickly bled the account dry.

For three months, Castelein tried to obtain clear information about the profits on his money and made several fruitless visits to Reid's offices, during which Castelein was given fabricated account statements. Forcing disclosure, Castelein discovered that his $12.5 million had been churned to a zero balance in the mere three months since opening his account. Castelein immediately began legal proceedings and sued the corporations involved. CSG had been purchased by Wachovia (NYSE:WB). He won $17.8 million in damages, but no doubt lost his faith in brokers.

The Bottom Line
It's impossible to air out all the skeletons in Wall Street's well-stocked closet. Familiar names like Boesky and Siegel still strike a raw nerve with investors, and vaguely remembered figures like Fisk and Gould wrote he book that modern fraudsters still study. It is unlikely that Wall Street will ever be free of people in positions of power getting involved in all manner of devilry. Money is at the root of many terrible crimes, and Wall Street is the junction through which much of the world's wealth passes. As a result, it will continue to attract fresh hordes of ghoulish people committing the same old crimes.

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