Top 10 Most Expensive Corporate Frauds of the 20th & 21st Centuries

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The last decade has seen an amazing number of corporate frauds, which have had a spiraling effect on the incomes and savings of common people. Most of these led to losses totaling billions of dollars, and have led to a clamor for more stringent rules against corporate and accounting practices.

 

1. Enron

Enron

Enron’s collapse in 2001 from a company worth $63.4 billion, to one seeking bankruptcy reorganization, came as a shock to the general public. Considered to be a major accounting failure, it led to the dissolution of Arthur Anderson, one of the world’s largest accounting farms also. Over 15,000 employees of the corporate had most of their savings in stock, which fell from $83.01 in early 2001 to $0.01 in October 2001.

 

2. Bernie Madoff

Bernie Madoff

On June 29, 2009, Bernie Madoff was sentenced to 150 years in prison, the maximum sentence that could be given to anyone convicted of corporate fraud. He ran an amazing ‘Ponzi” scheme for his clients, showing falsified profits, and gains with the money that they had given him for investment. SEC authorities believe the actual net fraud will be between $ 14 & $17 billion.

 

3. Subprime Mortgage Crisis

SubPrime Mortgage Crisis

This was not the crisis of a single corporate but it led to the demise of many other corporate. The  repercussions can still be felt throughout the US and even Europe. It has had an adverse effect on most of the banks and financial institutions, and has led to large scale reform in the financial sector rules and regulations.

 

4. Satyam Computers

Satyam Computers

India’s biggest corporate scam was disclosed when Ramalinga Raju, the CEO of Satyam Computers declared that the company’s profits had been overstated for many years. Inflated bank figures, understated liabilities and over 10,000 non-existent employees were among the many fraudulent practices being indulged in to cross 7000 crone rupees.

 

5. Worldcom

Worldcom

On July 21, 2002, when Worldcom filed for bankruptcy under Chapter 11, it was USA’s largest corporate failure. The accounting scandal covered $ 11 billion and it seems the workings of the company were masked by painting a false picture of growing profits and margins. In 2004, it emerged from the bankruptcy proceedings with $5.7 billion in debt and $ 6 billion in cash.

 

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