Using a hand collected new data set, this paper examines in detail a classic account of stock market manipulation - the stock pools of the 1920s, which prompted the current anti-manipulation rules in the United States. We find abnormal trading volume during pools, consistent with market manipulation, but this trading led to only modest average price increases in the short run and no abnormal performance in the long run. Thus, there is no evidence that the stock pools harmed small investors. Given investigators' efforts to find cases of manipulation on the New York Stock Exchange during the 1920s, these findings suggest that manipulation was not a substantial problem.

Guolin Jiang, Paul G. Mahoney & Jianping Mei, Market Manipulation: A Comprehensive Study of Stock Pools, 77 Journal of Financial Economy 147–170 (2005).