At that time, bill-discounting was carried on sporadically by ordinary merchants in addition to their regular business, but Richardson considered that there was room for a London house which should devote itself entirely to the trade in bills.
In an effort to recover its liquidity, the business was incorporated as a limited company in July 1865 and sold its £15 shares at a £9 premium, taking advantage of the buoyant market during the years of 1864–66.
However, this period was followed by a rapid collapse in stock and bond prices, accompanied by a tightening of commercial credit.
[5] Overend Gurney's monetary difficulties increased, and it requested assistance from the Bank of England, but this was refused.
A run on the bank ensued as panic spread across London, Liverpool, Manchester, Norwich, Derby, and Bristol the following day, with large crowds around Overend Gurney's head offices at 65 Lombard Street.
However, the Lord Chief Justice Sir Alexander Cockburn said that they were guilty only of "grave error" rather than criminal behaviour, and the jury acquitted them.