A Global Site To Address World About Hot Current Topics.

Biggest Corporate Scandals Ever In The Corporate World

Scandals in the corporate world, whether centered around corruption, bribery, fraud, or other greed tend to have a significant impact on the economy as a whole, and while most companies are destined to fail at some point, there are a few that do so in such a spectacularly corrupt manner that they make headlines. So, as we peel back the covers of financial greed, here is a list of the 12 biggest corporate scandals ever.
12

HIH Insurance

Its corporate downfall can be considered the largest in Australia’s history. HIH Insurance was Australia’s second-largest insurance company until it entered into provisional liquidation in 2001. It incurred losses totaling $5.3 billion where its director, Rodney Adler, was sentenced to four and half years of jail time due to obtaining money by false or misleading statements, and failure to discharge his duties as a director in good faith and in the best interests of the company.

11

Martha Stewart’s Mess




Martha Stewart is a household name due to her endeavors as a business magnate, author, and magazine publisher. She is very successful in all her business ventures and has numerous bestselling books. However, she became entangled in the ImClone insider trading affair in 2002 and was even indicted on nine counts of securities fraud and obstruction of justice. She was able to bounce back, however, and even regained her company in 2012.

10

Deutsche Bank Spying Scandal


Deutsche Bank AG is a German global banking and financial services company that was caught spying not only on its board members, but also on the personal life of some of its investors. This scandal hit the bank as it is was not only Germany’s largest bank, but also the largest foreign dealer in the world with a presence in Europe, USA, Asia-Pacific, and the emerging markets. In 2006, the bank succumbed to paranoia when it hired an external detective agency to snoop on contacts between board members and the Munich-based media magnate, Leo Kirch and his associates, whom they have litigation with. Due to the scandal, the German government vowed to have a new privacy-protection law for workers.

9

Urban Bank


This was one of the largest banks in the Philippines until it was closed down on the basis of liquidity by the Philippine Deposit Insurance Corp. (PDIC). However, the liquidation grounds were not the issue here as some of Urban Bank’s officers were later criminally charged with economic sabotage due to their falsified supervision and examination sector (SES) reports to the Monetary Board.

8

Jerome Kerviel and the Société Générale Banking Scandal


Jerome Kerviel is a rogue trader who tripped up the world’s financial market when his unauthorized trading in the securities markets using the bank’s computers resulted in €4.9 billion losses to the Société Générale funds. The worst part of the issue came when the bank’s executive tried to mask the fraud by “unwinding” his trades. This resulted in trading panic all over the Atlantic causing a decline in European markets.

7

Barclays


Barclays, one of the world’s largest banks, was hammered by a scandal involving the Libor manipulation, where banks lend each other money at high rates. The company owned up to the allegation that it manipulated the London Interbank Offered Rate, which was tied to trillions of dollars worth of financial contracts and derivatives. The issue led to the resignation of the company’s CEO, Bob Diamond, and the company was asked to pay $450 million. Other banks like UBS were also under investigation for the Libor-rate rigging.

6

Bre-X


Bre-X is a Canadian mining company that bought a purported gold mine in Busang, Indonesia in March 1993. In 1995, the company announced the discovery of a veritable treasure chest that soared the company’s stock prices to CAD $286.50 on the Toronto Stock Exchange (TSX). However, this turned out to be the worst mining scandal of all time, when it was discovered that workers and miners falsified crushed core samples by salting them with placer or supergene gold constitutes. Because of this, Bre-X fell down the mine shaft after its stocks become worthless.

5

Barings Bank


Barings Bank is the oldest merchant bank in the city of London, which was founded by the German-born Baring family. This bank handled the Queen’s personal bank and was once the financier of the Napoleonic Wars. However, the bank collapsed in 1995 when one of its bank employees, Nick Leeson squandered and lost £827 million ($1.3 billion) through speculative investing, specifically in futures contracts, at the bank’s Singapore office over a period of three years, which was masked by manipulated records.

4

Hewlett-Packard Spying Scandal


The spying scandal was purportedly at the behest of HP Chairwoman, Patricia Dunn. This was in connection with an information leak where she had contracted a team of independent security experts to investigate some board members and several journalists by obtaining their phone records. However, this backfired and resulted in Dunn’s resignation and she was succeeded by HP CEO Mark Hurd.

3

Siemens


Siemens AG and the Greek government went under fire for corruption and bribery, which involved the deal for the security systems for the 2004 Summer Olympic Games in Athens and other purchases by OTE in the 1990s. While no serious charges have been made, it has been claimed that the bribes may have been up to 100 million Euros.

2

Volkswagen


Volkswagen was not spared after a criminal case with Schuster, but was again in the headlines because of its personnel manager, Klaus-Joachim Gebauer, who procured prostitutes for the firm’s labor representatives under the guise that it was in the interest of the company.

1

WorldCom


You might have wondered why the US’s second largest long-distance phone company, WorldCom, filed for Chapter 11 in 2002. However, an internal audit report showed that the company has been using fraudulent accounting methods to hide its declining financial condition. The company’s assets were inflated by around $11 billion with $3.8 billion in fraudulent accounts. While the company was purchased by Verizon Communications and was renamed Verizon Business division, this scandal has actually had a positive effect as the Sarbanes-Oxley Act was approved by the senate to introduce the most sweeping new business regulations since the 1930’s.

source(s): list25

0 comments:

Post a Comment