Greatest Business Scandals

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Greatest Business Scandals

• www.boston.com

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Charles Ponzi

• Ponzi's scheme In the 1920s, Charles Ponzi
  tricked thousands of New Englanders into
  investing in his postage stamp business. In a
  pyramid scheme, Ponzi used new investors' money
  to pay off earlier investors. Eventually his
  scheme collapsed, but his name still lives on,
  infamously.

 
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Ivar Kreuger

• Ivar Kreuger As the "Swedish Match King," Ivar
  Kreuger was once one of the richest men in the
  world. From 1913 to 1932, he built a small match
  business into a 600 million global empire.
  Kreuger controlled 40 percent of the world's
  match production. However, after his suicide in
  1932, forensic auditors found that Kreuger had
  operated a giant pyramind scheme. His debts
  exceeded Sweden's national deficit.
• (IvarKreuger.com)

4
Savings and Loan

• Savings and Loan Debacle During the 1980s, a
  string of bad business decisions triggered more
  than 1,000 U.S. savings and loans institutions to
  fail. Total S L income was 781 million in
  1980 the next year it fell to -4.6 billion.
  Charles Keating, left, a major player in the
  scandal, took advantage of small investors in the
  company, Lincoln Savings and Loan, and made risky
  investments under the protection of the Keating
  Five - involving five senators who had received
  300,000 from Keating during that time.

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Ivan Boesky

• Ivan Boesky Arbitrageur and investment banker
  Ivan Boesky was charged in 1986 with manipulating
  the stock market through insider trading. On
  November 14, 1986, also known as "Boesky Day," he
  paid 100 million to make up for insider trading
  profits. He later spent time in jail following
  his plea-bargain,agreeing not to participate in
  the markets. His activities were the inspiration
  for the Gordon Gekko character in the film "Wall
  Street."

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WorldCom

• WorldCom In 2002, telecommunications giant
  Worldcom committed the largest accounting fraud
  in history. Bernard Ebbers, former Worldcom
  chairman, was later sentenced to 25 years in
  prison for orchestrating an 11 billion scheme
  that drove his company into bankruptcy.
• (Daniel Acker/Bloomberg)

7
Tyco

• Tyco That same year, former CEO L. Dennis
  Kozlowski and two other former employers used
  600 million in bonuses and company loans to buy
  extensive personal luxuries like vacation homes,
  upscale apartments, jewlery and clothing.

8
HealthSouth Corp.

• HealthSouth Corp. Fifteen employees at
  HealthSouth, once the largest U.S. operator of
  rehabilitation hospitals, pleaded guilty in 2004
  to overstating earnings by 2.5 billion. CEO
  Richard Scrushy was acquitted, but was convicted
  this year for arranging 500,000 in donations to
  former Alabama Governor Don Siegelman in exchange
  for a seat on a state hospital regulatory board.

9
Martha Stewart

• Martha Stewart ImClone Systems founder Sam
  Waksal tipped domestic diva Martha Stewart that
  the FDA would not approve their new cancer drug.
  Stewart sold about 228,000 in stocks right
  before ImClone dropped 18 percent. Although she
  first claimed she was innocent, Stewart took a
  plea bargain deal and served several months in
  prison after she was convicted of four counts of
  obstructing justice and lying to investigators.

10
Enron

• Enron Inflating profits, hiding a billion
  dollars in debt and manipulating the energy
  market are only a few crimes Enron has on its
  list. In 2001, Enron declared bankrupcy, along
  with many of the company's investors. Last year,
  after being convicted, former CEO Ken Lay died of
  a heart attack. Jeff Skilling, former CEO, was
  found guilty of fraud and conspiracy. He began
  serving his 24-year sentence in December.