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Biggest CorporateScandals
Adam MihailInternational Affairs
3rd year student, FSEGA
WorldCom•US’s second largest long-distance phone
company•Filed for Chapter 11 in 2002•The company’s assets were inflated by around
$11 billion with $3.8 billion in fake accounts
Jerome Kerviel and the Société Générale Banking Scandal
•French rogue trader, convicted in 2008•Made unauthorized trading in the securities
markets using the bank’s computers resulted in €4.9 billion losses to the Société Générale funds.
HIH Insurance•HIH Insurance was Australia’s second-largest
insurance company until it entered into provisional liquidation in 2001•It incurred losses totaling $5.3 billion•its director, Rodney Adler, was sentenced to four
and half years of jail time
Parmalat•Its founder, Calisto Tanzi was accused of
questionable accounting practices in 2003 when a €14 billion hole was discovered in the company’s accounting records•In 2005, Enrico Bondi relists a reconstructed
Parmalat on the Milan exchange
Swissair•Grounded in 2001 due to a bad expansion move•later acquired by Crossair and liquidation firm
Jurg Hoss.
The Bernie Madoff Ponzi Scheme
• stockbroker, investment advisor, and financier, convicted in 2009 to 150 years in federal prison•Using a Ponzi scheme, he embezzled over $65
billions from people and companies all over the world
Bre-X•Canadian mining company, announced the in
1995 the discovery of a large quantity of a gold in a mine in Indonesia•In 1997, they filed for bankruptcy
Tyco Ltd.•Manufacturing conglomerate that deals with
electronic components, health care, fire safety and security•In 2005, its CEO Dennis Kozlowski and CFO
Mark H. Swartz were found guilty of stealing $600 million from the company.
Barings Bank•is the oldest merchant bank in the city
of London, handled the Queen’s personal bank and was once the financier of the Napoleonic Wars.•Collapsed in 1995
Enron•by the use of accounting loopholes, special
purpose entities, and poor financial reporting, were able to hide billions of dollars in debt from failed deals and projects.•Filed for bankruptcy in 2001
Bibliography:•http://
www.worldfinance.com/home/special-reports-home/the-parmalat-scandal (12-05-2014)•http://www.insidermonkey.com/blog/the-10-biggest-corporate-scandals-in-modern-history-174301/?
singlepage=1 (12-05-2014)•http://list25.com/25-biggest-corporate-scandals-ever/?
view=all (12-05-2014)•http://
www.foster.washington.edu/centers/facultyresearch/Pages/karpoff-scandals.aspx (12-05-2014)