What Is The Largest Check Ever Written?

There are many checks written every day. But, what is the largest check you have ever seen? The largest check most people will ever see or write is maybe a few thousand dollars to cover rent, medical bills, or a security deposit for an apartment. Any huge amount, like a down payment on a home, is normally wired electronically.

The same case applies to the business world. A business cuts checks for employee salaries and some small business deals. However, for bigger transactions, an electronic wire is by far the best method.

On the flip side, there have been some very huge amounts written in checks during modern financial history, from the millions to the hundreds of millions of dollars. What is the single largest physical check ever written? To discover, we have to travel back in time a little bit…

Two equity bankers lose their Morgan Stanley broker licenses

October 2008

In October 2008, the world was reeling from an out-of-control financial crisis. The whole world was in a rapid fall. Banks that previously appeared the most reliable and steadfast institutions in the corporate space, were dangerously close to insolvency. Lehman Brothers had infamously failed and Bear Stearns was bought for pennies on the dollars.

Then, there was Morgan Stanley.

Morgan Stanley was the next in line to implode by all accounts. Desperate to avoid the fall, executives at Morgan Stanley reached out to many large foreign entities for a lifeline that would help shore up the bank’s finances and show investors that the bank would survive.

Morgan Stanley contacted a state-controlled Chinese bank for some time but eventually found a possible match with Mitsubishi UFJ.

The problem was urgency. Investor confidence had destroyed Morgan Stanley’s stock price from almost $60 per share to less than $10, and there did not appear to be an end to the pain in sight.

‘Sadly You Can’t Just Write A Check’

Teams from both companies held an emergency high-profile meeting over Columbus Day weekend in October 2008. After 48 hours of negotiations, the teams had a deal worked out and a final price tag. Mitsubishi would invest $9 billion into Morgan Stanley in exchange for a 21% ownership stake and a 10% annual dividend.

Under other circumstances in recent financial history, a $9 billion transaction would be made whole through an electronic wire from one bank to the next.

That is where the negotiating teams hit the wall.

  • First, it was a holiday weekend and banks would be closed in both nations until Tuesday.
  • Secondly, wiring any amount of money normally takes 2-3 days and Morgan Stanley may not have survived another 24 hours.
  • Thirdly, Morgan Stanley was raring to make a formal announcement of the merger as soon as possible to stop their stock price from dropping any more.

Desperate to get a solution for the $9 billion problem, one of the Morgan Stanley deal makers joked “too bad you can’t just write a check!”

Both teams erupted in laughter. However, a few minutes later, one of the top Morgan Stanley executives made an incredible realization that a check can work.

If Mitsubishi had the money to cover a $9 billion check, there was no reason why Morgan Stanley could not accept and deposit it before the markets opened on Tuesday morning. From a regulation/accounting standpoint, a paper check ‘checked’ all the boxes that enable Morgan Stanley to officially announce this merger and maybe reverse their plunging stock price.

The Japanese team left quickly to call the home office and research their capabilities. As luck would eventually have it, Mitsubishi UFJ indeed kept enough of a checking account balance to cover and clear a $9 billion check.

After several hours of phone calls and arrangements, the Mitsubishi bankers returned to Morgan Stanley’s headquarters with a check for $9 billion. That is a number nine followed by nine zeros. Eleven zeros if you count the pennies. It was, and still is, the biggest check ever written and deposited.

Here is a photo of the check:

Morgan Stanley instantly announced to the world that they had a done deal.

After the Columbus weekend, their stock exploded by 85% from $9.68 to $17.92. Today Morgan Stanley’s share price is more than $100. The firm’s market cap is $190 billion. So that $9 billion investment for a 21% stake has now become $40 billion not including dividends.

All that is attributed to a paper check.

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