25 Biggest Corporate Scandals Ever

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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.

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 Cafe”, 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.

20. 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

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.

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, 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, 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.


Banco Intercontinental or BANINTER was the second-largest privately held commercial bank in the Dominican Republic, whose demise resulted from fraud and political corruption in 2003. This caused the Dominican’s economy to go into a steep decline as fraudulent bookkeeping and political influence by the administration of former President Hipólito Mejía and all the major Dominican political parties resulted in a $2.2 billion deficit or equal to 12 to 15% of the country’s GDP.

14. Adelphia Communications Corp.

This Pennsylvania-based company was ranked as the fifth largest cable company in the US before it yielded to bankruptcy in 2002 due to internal corruption. The company incurred $2.3 billion debt and its founders were charged with securities violations. John and Timothy Rigas were sentenced to 15 to 20 years in prison, while five other officers were indicted. The Rigases made a complicated cash-management system where they diverted funds to other family-owned entities.

13. Global Crossing Ltd.

This company showed that an incredible scandal is not necessarily the end of the business road. In terms of assets, the company’s bankruptcy can be considered the 7th largest filing in American history where the total assets given at the filing were $22.4 billion with debts amounting to $12.4 billion. The debt was amassed by four CEOs of the computer-networking services company, where each was given $23 million in personal loans, which were ultimately forgiven. However, in 2004, the company began to show improved margins and even announced acquisitions of FiberNet and Impsat in 2006.

12. HIH Insurance

Its corporate downfall can be considered the largest in Australia’s history. HIH Insurance was Australia’s second-largest insurance company until it entered into provisional liquidation in 2001. It incurred losses totaling $5.3 billion where its director, Rodney Adler, was sentenced to four and half years of jail time due to obtaining money by false or misleading statements, and failure to discharge his duties as a director in good faith and in the best interests of the company.

11. Martha Stewart’s Mess

Martha Stewart is a household name due to her endeavors as a business magnate, author, and magazine publisher. She is very successful in all her business ventures and has numerous bestselling books. However, she became entangled in the ImClone insider trading affair in 2002 and was even indicted on nine counts of securities fraud and obstruction of justice. She was able to bounce back, however, and even regained her company in 2012.

10. Deutsche Bank Spying Scandal

Deutsche Bank AG is a German global banking and financial services company that was caught spying not only on its board members, but also on the personal life of some of its investors. This scandal hit the bank as it is was not only Germany’s largest bank, but also the largest foreign dealer in the world with a presence in Europe, USA, Asia-Pacific, and the emerging markets. In 2006, the bank succumbed to paranoia when it hired an external detective agency to snoop on contacts between board members and the Munich-based media magnate, Leo Kirch and his associates, whom they have litigation with. Due to the scandal, the German government vowed to have a new privacy-protection law for workers.

9. Urban Bank

This was one of the largest banks in the Philippines until it was closed down on the basis of liquidity by the Philippine Deposit Insurance Corp. (PDIC). However, the liquidation grounds were not the issue here as some of Urban Bank’s officers were later criminally charged with economic sabotage due to their falsified supervision and examination sector (SES) reports to the Monetary Board.

8. Jerome Kerviel and the Societe Generale Banking Scandal

Jerome Kerviel is a rogue trader who tripped up the world’s financial market when his unauthorized trading in the securities markets using the bank’s computers resulted in €4.9 billion losses to the Societe Generale funds. The worst part of the issue came when the bank’s executive tried to mask the fraud by “unwinding” his trades. This resulted in trading panic all over the Atlantic causing a decline in European markets.

7. Barclays

Barclays, one of the world’s largest banks, was hammered by a scandal involving the Libor manipulation, where banks lend each other money at high rates. The company owned up to the allegation that it manipulated the London Interbank Offered Rate, which was tied to trillions of dollars worth of financial contracts and derivatives. The issue led to the resignation of the company’s CEO, Bob Diamond, and the company was asked to pay $450 million. Other banks like UBS were also under investigation for the Libor-rate rigging.

6. Bre-X

Bre-X is a Canadian mining company that bought a purported gold mine in Busang, Indonesia in March 1993. In 1995, the company announced the discovery of a veritable treasure chest that soared the company’s stock prices to CAD $286.50 on the Toronto Stock Exchange (TSX). However, this turned out to be the worst mining scandal of all time, when it was discovered that workers and miners falsified crushed core samples by salting them with placer or supergene gold constitutes. Because of this, Bre-X fell down the mine shaft after its stocks become worthless.

5. Barings Bank

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.

4. Hewlett-Packard Spying Scandal

The spying scandal was purportedly at the behest of HP Chairwoman, Patricia Dunn. This was in connection with an information leak where she had contracted a team of independent security experts to investigate some board members and several journalists by obtaining their phone records. However, this backfired and resulted in Dunn’s resignation and she was succeeded by HP CEO Mark Hurd.

3. Siemens

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.

2. Volkswagen

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.

1. WorldCom

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.

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