In 1955, Two Traders Cornered Nearly All Onion Supplies in Chicago and Pocketed Roughly $100 Million

In 1955, two men, Vincent Kosuga (an onion farmer) and Sam Siegel (a businessman), executed a massive cornering of the onion market that remains one of the most notorious examples of market manipulation in U.S. history. Their actions led to a permanent federal ban on onion futures trading that is still in effect in 2026.

Siegel and Kosuga, operating out of the Chicago Mercantile Exchange, began their scheme by aggressively buying both physical onions and futures contracts. By the fall of 1955, they controlled approximately 30 million pounds of onions, roughly 98% to 99% of the entire available supply in Chicago. After establishing their monopoly, they threatened growers with a market flood to force them to buy back the inventory at higher prices.

While publicly supporting the price, they secretly took massive short positions on onion futures, betting that prices would crash. To trigger the collapse, they flooded the market with their hoarded onions, some of which they had shipped out of Chicago to be cleaned and re-shipped back to create a false impression of an endless new supply. 

By March 1956, the price of a 50-pound bag of onions plummeted from $2.75 (in August 1955) to just 10 cents. At 10 cents, the onions were worth less than the mesh bags they were packed in. Thousands of onion farmers were driven into bankruptcy. Siegel and Kosuga, however, profited handsomely from their short positions, earning an estimated $8.5 million at the time (roughly $100 million in current value).

Millions of pounds of worthless, rotting onions were dumped into the Chicago River, reportedly causing the city to smell for weeks. The resulting national outrage led to congressional hearings where then-Congressman Gerald Ford sponsored a bill to prevent such manipulation.  In August 1958, President Dwight D. Eisenhower signed the Onion Futures Act, which prohibited the trading of onion futures in the U.S.

Onions remain the only agricultural commodity in the United States specifically excluded from futures trading by federal law. The act was later amended in 2010 to also include a ban on motion picture box office receipts.