25 Biggest Corporate Scandals Ever

Posted by on April 8, 2013

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 25 biggest corporate scandals ever.


25

The Bernie Madoff Ponzi Scheme

This made the list not only for the sheer amount of money involved (at least $65 billion in client’s accounts) but because the people he conned are some of the smartest people in the world. People entrusted him with their charitable funds but they were instead used for his luxurious lifestyle and personal gain.

24

HealthSouth

Organized and directed by the company’s CEO, Richard Scrushy, this financial hoax involved coming up with fictitious transactions and accounts to boost the company’s earnings. The fraud embezzled $1.4 billion, which was reported as the company’s earnings from 1996 to 2003. He almost got away with it when he was acquitted by a “friendly” Alabama jury, but the prosecutors kept at it and he was convicted on June 2006 of bribery charges made on Alabama’s governor to receive a seat on the medical regulatory board.

23

The Stanford Financial Fallout

While this fraud may not be as big as the Madoff’s Ponzi scheme in dollar terms, as Allen Stanford only gained $8 billion, this was a case of trust misplaced. Stanford coaxed his clients to invest in safe Certificate of Deposits, but the money was instead used in hedge funds that could (and did) lose money.

22

Tyco Ltd.

Tyco International is a diversified manufacturing conglomerate that deals with electronic components, health care, fire safety, security, and fluid control with headquarters in New Jersey, USA. In 2005, its CEO Dennis Kozlowski and CFO Mark H. Swartz were found guilty of stealing $600 million from the company. These two symbolized the excesses of executive compensation at shareholder’s expense, where Kozlowski will be remembered for the $2 million birthday bash he gave his wife on a Mediterranean Island at the company’s expense.



21

Lance Armstrong and the Livestrong Foundation

Lance Armstrong is not only a Tour de France champion and the man behind the Livestrong Foundation, but he also owns several businesses and investments. He owns the coffee shop “Juan Pelota Café”, a bike shop named “Mellow Johnny,” and has several million dollars investment in the American bicycle component manufacturer SRAM Corporation. However, due to his doping confessions, he might not only lose his title and his sponsorships, but also need to sell his shares back to SRAM.