E. F. Hutton Executives Plead Guilty to Fraud.

On May 2, 1984, the E. F. Hutton Company, the fifth largest investment firm in the United States, pleaded guilty to two thousand counts of wire and mail fraud. Beginning around 1980, Hutton had implemented and executed an elaborate, illegal, check-kiting scheme that would earn the company millions of dollars from interest-free loans. Hutton floated checks that were still in the clearing process, allowing the firm to earn interest during the time banks processed the checks and deposits. This approach worked for Hutton because of the slow rate in which checks cleared the banks, all in the days before electronic banking.