The 1720 English company most closely associated with Britain's earliest famous stock-market bubble was the South Sea Company.
Founded in 1711, the South Sea Company received a government-backed monopoly over trade with Spanish South America, although the expected commercial opportunity was far smaller than promotional claims suggested. In 1720, Parliament approved a plan allowing the company to convert much of Britain's national debt into company shares.
Share prices rose dramatically as investors expected vast profits. Speculation spread to other ventures, including companies formed with extravagant or vague business proposals. The Bubble Act of 1720 attempted to restrict unauthorized joint-stock companies, but confidence collapsed later that year. South Sea shares fell, ruining many investors.
The scandal damaged public trust and caused political controversy because prominent officials had promoted or benefited from the scheme. Parliament investigated the affair, and economist John Law's Mississippi Company collapse in France occurred during the same wider European speculative episode. The South Sea Bubble is remembered as a classic example of credit-fueled speculation and herd behavior.