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)