The Stock Exchange Forgery was a fraud perpetrated at the London Stock Exchange during the years 1872 to 1873.
In 1870 the telegraph systems of the United Kingdom were nationalised and run by the Post Office. The development of the telegraph systems had been of great benefit to the Stock Exchange as stock prices could be quickly communicated. If those working at the Stock Exchange wanted to send a telegram they would write their message on a telegram form and take it with payment of one shilling or more to a clerk who would then give them a 1 shilling green postage stamp to apply to it, if necessary with other stamps to make up the correct fee which depended on the number of words. The clerk then cancelled the stamp with a dated postmark to indicate that the appropriate payment had been made.
A fraudulent clerk supplied forged stamps for the forms in order to steal the expensive one shilling fees without depleting the stock of genuine stamps which were subject to audit. The fraud was successful because the forged stamps were only used on certain days and the stamps were convincing forgeries that were not retained by the customers who only handled them briefly. After the telegrams had been sent the forms were filed before later being put in a bag for disposal.
The fraud was not detected at the time and could have remained undetected had all the stamps been destroyed as originally intended; however they were retained by the Stock Exchange for a period, after which they were disposed of as waste paper. Some of the forms eventually came into the hands of stamp dealers, and the fraud finally came to light over 25 years later in 1898 when the young philatelist Charles Nissen noticed the following differences from the genuine stamps:[1][2]
The dates when the fraud was operating are apparent from the dates on the Stock Exchange postmarks applied to the stamps. As a large number of forged stamps were found and 1 shilling was a significant sum at the time it is likely that the fraud was highly profitable for the culprit(s) who were never identified. Paradoxically the forged stamps are now worth more than the originals to collectors.