The South Sea Company was at the center of the South Sea Bubble, which collapsed in Britain in 1720.
Founded in 1711, the company received a government-backed monopoly over British trade with Spanish South America in exchange for assuming part of the national debt. Its actual commercial opportunities were far smaller than public enthusiasm suggested, but its shares rose dramatically as investors anticipated wealth from overseas trade and government finance.
The bubble burst in late 1720. Share prices fell sharply, ruining many investors and exposing corruption, insider dealing, and misleading promotion. Parliament investigated the scandal, and several directors were punished or forced to surrender assets.
The South Sea Bubble was not the same event as the Mississippi Bubble in France, although the two speculative episodes occurred at roughly the same time and were linked through international investor enthusiasm. The South Sea Company also differed from the later stock-market crashes of the nineteenth and twentieth centuries because its collapse centered on a speculative company promotion and government debt conversion.