Which London company became notorious after the South Sea Bubble burst in 1720?
Answer
South Sea Company
Answer
South Sea Company
The South Sea Company became notorious after the South Sea Bubble burst in 1720.
Founded in 1711, the company received a British government monopoly over trade with parts of Spanish South America, although its actual trading opportunities were limited. Its shares rose spectacularly as investors were encouraged to exchange government debt for company stock and as extravagant expectations spread.
The price collapsed later in 1720, ruining many investors and causing political scandal. The episode led Parliament to investigate corruption and helped produce restrictions on the creation of joint-stock companies.
The South Sea Bubble is often discussed alongside France's Mississippi Bubble, which also collapsed in 1720. They were separate schemes, however. The South Sea Company was the British enterprise, while John Law's Mississippi Company operated in France.
Source: Wikipedia · fact-checked Oct. 2026