Albert Oustric
| Albert Oustric | |
|---|---|
 |
|
| Born |
2 September 1887 Carcassonne, Aude, France |
| Died | 16 April 1971 (aged 83) Toulouse, France |
| Nationality | French |
| Occupation | Entrepreneur, banker |
| Known for | Bank failure scandal |
Albert Oustric (2 September 1887 – 16 April 1971) was a French entrepreneur and banker. He was the son of a cafe proprietor, and held various jobs before managing to raise capital for a hydro power generation company. He founded a small bank in 1919 and specialized in turning around enterprises that were in financial difficulty through debt consolidation and the sale of shares at inflated prices. He invested in a wide range of industries from mining to leather goods and retail banking. His group was bankrupted by the economic crisis that started in 1929, and many small depositors were ruined. Oustric was found guilty of fraud and embezzlement and spent several years in prison. A commission of inquiry found that several politicians had protected Oustric, including the Minister of Justice. The Senate tried and acquitted them.
Albert Oustric was born on 2 September 1887 in Carcassonne, Aude. His father ran a cafe in Carcassonne, then became manager of a wine and liquor store in Toulouse. Albert Oustric became clerk to an advocate, then a sales representative of the Cusenier liquor firm in the Aude. When his father died in 1910 he succeeded him as manager of the Toulouse store, while continuing as a Cusenier representative. During World War I he was mobilized as an accountant in a shell-making factory. He was released from the factory to exploit a legacy of his father, the rights to a waterfall in the Gripp valley of the Hautes-Pyrénées, by building a hydropower plant. He raised the funds needed to float the Force & lumière des Pyrénées company for this purpose. He also floated the Electro-Métal company to produce ferro-silicon in Haute-Garonne.
In June 1919 Oustric founded Oustric & Cie, a small bank with a capital of one million francs, increased to five million in July 1921 and to fifteen million in 1921 after being transformed into a limited company. In 1921 he married Madeleine de Rigny. The bank had a small amount of capital from the hydroelectric company and the start of a consumer business. It became involved in arbitrage operations with coal and gold mines. Oustric's bank would issue stocks of questionable companies and use false publicity to increase their value before selling them off. Oustric sold shares in an artificial silk company, la Borswich française, in 1923. In 1926 Oustric invested in a silver mine in Bolivia, the Huanchaca. He used announcements of false discoveries to make the share prices rise by ten times their original value, then let them fall, then pushed them up again. With advance knowledge of price movements, he could sell high and buy low, while other investors always lost. He profited from the protectionist isolation of the French stock exchange, cut off from international finance and from other exchanges.
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