25 Biggest Corporate Scandals Ever

Posted by , Updated on July 15, 2014

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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.

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20

Enron Corp.

Enron Corp.

Enron was the “it” company at the turn of the century as it oozed with wealth, smarts, and power. However, this Houston-based energy company toppled into a spectacular bankruptcy due to a painstakingly-planned accounting fraud made by its accounting firm, Arthur Andersen. Once considered a blue-chip stock, Enron shares dropped from $90 to $0.50, which spelled disaster in the financial world, where thousands of employees and investors saw their savings vanish with the company as it filed for an earnings restatement in October 2001.

19

Arthur Andersen

Arthur Andersen

This Chicago-based company voluntarily relinquished its licenses to practice as Certified Public Accountants (CPAs) in the USA due to the Enron accounting scandal. This was a blow considering that it is one of the world’s top five accounting firms prior to the scandal, which resulted in the loss of 85,000 jobs and corporate rebranding.

18

Bearn Stearns Companies Inc.

Bearn Stearns Companies Inc.

This is one of the US’s biggest government bailout that helped avoid a domino effect in similar failures in the financial market. Ranking as one of the largest global investment banks, securities-trading and brokerage firms in the world, Bearn Sterns was nearly bankrupted before it sold itself to JP Morgan Chase for $2 a share or $240 million. This was furthered bolstered by a guarantee of $30 billion worth of loans given by the Federal Reserve to the company.

17

Swissair

Swissair

Swissair, a former national airline of Switzerland and major international airline, was grounded in October 2001 due to a bad expansion move. With 30% of its shares in stocks owned by the Switzerland government, the company implemented the Hunter Strategy, a major expansion program. However, this resulted in a financial crisis that also affected its parent company, SAirGroup, which was already hurt by the September 11 attacks. As the entire Swissair fleet was grounded and officially dismantled in March 2002, it was later acquired by Crossair and liquidation firm Jurg Hoss.

16

Parmalat

Parmalat

Parmalat, an Italian company, is the leading global producer of Ultra Hot Temperature (UHT) milk and other foods. However, 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. This resulted in on of the biggest corporate scandals in history as he was selling credit-linked notes to the company and diverting the company’s funds elsewhere.

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