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.
Hewlett-Packard Spying Scandal
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.
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.
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.