Gold During 10 Cases of Corp Greed ($900 Billion)

Markets

10 Worst Cases Of Corporate Greed In U.S. History

Erica Quinn

Corporate scandals and financial scams are seemingly always in the headlines, but what are the biggest investment or accounting scandals in U.S. history when you line them up by dollar amount? By our calculations, the Lehman Brothers scandal is the most expensive scandal in U.S. history by a mile with Enron coming in a distant second. Honorable mention goes to Bernie Madoff and Allen Stanford for making the top ten list for running gigantic Ponzi schemes. Here is the full list of the top ten biggest financial scandals in U.S. history totally nearly $900 Billion:

[EDIT: As a reference point, here is Gold's Performance during the years of the worst Financial Scandals in US History - Soren K]

h/t Grant Williams

[EDIT: Here is Erica's Data as she compiled it. You will note at no point was the 'pet rock' guilty of any crimes - Soren k.]

1. Cendant Corporation

Date: 1998
Amount: $14 Billion in stock losses
The Scam: Accounting Fraud
Restitution: $32.5 million settlement to shareholders
Criminal Charges: Company Chairman Walter Forbes was sentenced to 12 years in prison and Vice Chairman E. Kirk Shelton, was sentenced to 10 years in prison.

2. Enron

Date: 2001
Amount: $78 Billion in stock losses, 5000 employees lost jobs, many lost pensions
The Scam: Accounting Fraud
Caught!: Enron employee Sherron Watkins brought it to light.
Restitution: A Class Action Settlement of $7.185 billion was the largest of all time
Criminal Charges: Jeff Skilling (former president) got the longest prison sentence at 24 years, his sentence was later reduced by 10 years. CEO Kenneth Lay was convicted of fraud, conspiracy, and bank fraud, but died of a heart attack before receiving a sentence.

3. WorldCom

Date: 2002
Amount: $11 Billion
The Scam: Accounting Fraud
Caught!: Cynthia Cooper, Vice President of Internal Audit at WorldCom, started investigating and then brought it to light.
Restitution: A $750 million civil penalty was paid to investor victims.
Criminal Charges: Bernie Ebbers, CEO, is serving a 25-year prison sentence. Scott D. Sullivan, CFO, was sentenced to 5 years in prison. 3 other WorldCom executives received shorter sentences ranging from 5 months to 1 year plus a day.

4. HealthSouth

Date: 2003
Amount: $4.6 Billion
The Scam: Accounting Fraud
Caught!: SEC Investigation
Restitution: Richard Scrushy, CEO, was ordered to pay $2.9 Billion to shareholders in a civil trial
Criminal Charges: Scrushy was found Not Guilty in the HealthSouth case, but just 5 months later was given an 82-month prison sentence (later reduced to 70 months) for political corruption charges. Aaron Beam, CFO, served 3 months in federal prison. Weston Smith, who served as CFO after Beam, served 14 months.

5. Freddie Mac

Date: 2003
Amount: $5 Billion
The Scam: Securities Fraud
Caught!: SEC Investigation
Restitution: $50 million settlement
Criminal Charges: 4 former Freddie Mac executives paid a total of $515,000 in civil fines and $275,548 in restitution payments.

6. Fannie Mae

Date: 2004
Amount: $11 Billion
The Scam: Securities Fraud
Caught!: SEC Investigation
Restitution: $400 million settlement
Criminal Charges: None

7. Bernie Madoff

Date: 2008
Amount: $65 Billion
The Scam: Ponzi Scheme (the largest in history)
Caught!: After he confessed to his sons, they called the authorities.
Restitution: $11 Billion was recovered by officials
Criminal Charges: Madoff is serving a 150-year prison sentence with 5 other employees also receiving criminal sentences.

8. Washington Mutual

Date: 2008
Amount: $65 Billion: An estimated $10 Billion in preferred stock losses and $55 Billion in common stock losses
The Scam: Mortgage Fraud
Caught!: FDIC stepped in.
Restitution: Sold to JPMorgan Chase for $1.9 Billion. Executives agreed to a $64 million settlement, however all but $400,000 of that amount was covered by insurance policies WaMu purchased to protect their executives.
Criminal Charges: None.

9. Lehman Brothers

Date: 2008
Amount: $639 Billion in assets lost in bankruptcy.
The Scam: Hiding billions of risky investments.
Caught!: Bankruptcy (the largest in history)
Restitution: $65 billion to settle creditors’ claims (the equivalent of 14 cents on the dollar)
Criminal Charges: None.

10. Allen Stanford

Date: 2009
Amount: $7 Billion
The Scam: Ponzi Scheme – 21,000 clients
Caught!: SEC Raid
Restitution: 3 waves of settlements totaling around $125 million, or about 2.5% of victims claims
Criminal Charges: 110 years on 13 counts of mail fraud, wire fraud, conspiracy, and obstruction.