How 2 Guys Pocketed $99.43 Million From Trading Onions

By the end of 1955, Sam Siegel and Vincent Kosuga controlled 98% of all onions in Chicago, which totaled around 30 million pounds. How did they do this?

Think Google, Apple, or Procter & Gamble have a monopoly? What if I told you 2 guys controlled 98% of all onions in Chicago at one point. Why? To pocket nearly $100 million through market manipulation.

The Backstory

Sam Siegel and Vincent Kosuga were American farmers and commodity traders who saw the opportunity of a lifetime. In 1955, onion futures became the most traded commodity on the Chicago Mercantile Exchange, making up 20% of all trades.

Picture of Vincent Kosuga, the guy behind the onion future act

Picture of Vincent Kosuga in 1968 talking to media about his story

Siegel and Kosuga pounced. They bought up as many onions and onion futures as they could get their hands on. And by the end of 1955, Siegel and Kosuga controlled 98% of all onions in Chicago, which totaled around 30 million pounds - crazy right?

The Plan

The two men began shorting their futures, meaning they were betting that the price of onions would drop. Why would they short onion futures if they controlled 30 million pounds of onions? Because it was a guaranteed bet.

Kosuga and Siegel began flooding the market with their onions. They knew if they started selling their ridiculous amount of onions on the market, supply would dramatically increase, in turn dropping the prices of onions.

Overall, a pretty straight-forward game plan:

  1. Buy up as many onions and onion futures as possible

  2. Short onion futures

  3. Dump the massive supply of onions they control to crush onion prices

And wow, did it work. The impact was so strong a bag of onions that had previously cost $2.75 was being sold for 10 cents.

By the time the Commodity Exchange Authority figured out what was happening, the two men had pocketed $8.5 million in profits.

$8.5 million in 1955 (after adjusting for inflation) is $99,431,535 in 2024.

Yes, the two men made nearly $97 million (in today’s money) from manipulating the onion markets.

The Fallout

President Dwight Eisenhower amended and signed The Commodity Exchange Act into law in 1958. It included a stipulation known as the Onion Futures Act

The Onion Futures Act made onions the only commodity in the country to be banned from trading.

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