How to Rebound After a Major Business Mistake 21 Famous Corporate Bankruptcies from As a tidal wave of business and consumer bankruptcies continues to drown our economy, those who have taken or are considering the bankruptcy plunge should at least know that they are not alone.
Chances are you were never called on it, because your friends trusted you. Just as we trust our friends, we put faith in the investing world. Investing in a stock takes a lot of research, but it also requires us to make a lot of assumptions. For example, we assume reported earnings and revenue figures are correct, and that management is competent and honest, but Tyco downfall assumptions can be disastrous.
Online Investment Scams Understanding how disasters happened in the past, can help investors avoid them in the future. Unfortunately, these shareholders had no way of knowing what was really happening, as they were being tricked into investing.
He created more than 10, phony documents and sales receipts, without anybody suspecting anything. Amazingly, Barry Minkow was only a teenager at the time!
He was sentenced to 25 years in prison. However, the company was really shipping fruit baskets to customers. The employees then created fake documents to appear as though they were recording sales.
Over 20, investors lost almost all of their investment in a company that was once considered a Wall Street darling.
Bre-X Minerals, This Canadian company was involved in one of the largest stock swindles in history. Its Indonesian gold property, which was reported to contain more than million ounces, was said to be the richest gold mine, ever.
The Tyco downfall ended on March 19,when the gold mine proved to be fraudulent and the stock tumbled to pennies, shortly after. Enron, Prior to this debacle, Enrona Houston-based energy trading company was, based on revenue, the seventh largest company in the U.
Through some fairly complicated accounting practices that involved the use of shell companiesEnron was able to keep hundreds of millions worth of debt off its books. Doing so fooled investors and analysts into thinking this company was more fundamentally stable, than it actually was.
Additionally, the shell companies, run by Enron executives, recorded fictitious revenues, essentially recording one dollar of revenue, multiple times, thus creating the appearance of incredible earnings figures.
As Enron fell, it took down with it Arthur Andersen, the fifth leading accounting firm in the world at the time.
The fiasco at Enron made the phrase " cook the books " a household term, once again. WorldCom, Not long after the collapse of Enron, the equities market was rocked by another billion-dollar accounting scandal.
Telecommunications giant WorldCom came under intense scrutiny after yet another instance of some serious "book cooking. Apparently, the company felt that office pens, pencils and paper were an investment in the future of the company and, therefore, expensed or capitalized the cost of these items over a number of years.
In fact, its business was becoming increasingly unprofitable. Who suffered the most in this deal? The employees; tens of thousands of them lost their jobs. TYCWith WorldCom having already shaken investor confidence, the executives at Tyco ensured that would be an unforgettable year for stocks.
Before the scandal, Tyco was considered a safe blue chip investment, manufacturing electronic components, health care and safety equipment. During his reign as CEO, Dennis Kozlowski, who was reported as one of the top 25 corporate managers by BusinessWeek, siphoned hordes of money from Tyco, in the form of unapproved loans and fraudulent stock sales.
Kozlowski and Belnick arranged to sell 7. These funds were smuggled out of the company, usually disguised as executive bonuses or benefits. The executives escaped their first hearing due to a mistrial, but were eventually convicted and sentenced to 25 years in jail.
HLSAccounting for large corporations can be a difficult task, especially when your boss instructs you to falsify earnings reports. An independent law firm concluded the sale was not directly related to the loss, but investors should have taken the warning.
Amazingly, the CEO was acquitted of 36 counts of fraud, but was later convicted on charges of bribery. Bernard Madoff, Making for what could be an awkward Christmas, Bernard Madoffthe former chairman of the Nasdaq and founder of the market-making firm Bernard L. Madoff Investment Securities, was turned in by his two sons and arrested on Dec.
The year-old kept his hedge fund losses hidden, by paying early investors with money raised from others.DealBook Briefing: The Stock Rout Is a Warning About the Economy. In , hefty fiscal stimulus has buoyed the markets and helped America shrug off risks. Sep 21, · Startups news from the, including the latest news, articles, quotes, blog posts, photos, video and more.
Dennis Kozlowski had a $2 million party, and Tyco picked up half the tab. I was born in As a kid my dad got me a set of six toy cars, not sure the brand.
But there was a golden chevorlette corvette, a red sports car, a yellow sports . Photo Credit: Newsday / Ken Spencer.
Tyco's Tickle Me Elmo, a stuffed animal with interactive tickle spots that, when stimulated, would cause him to laugh hysterically, caused mass chaos when it. Independent, unbiased and fair news about the Leasing Industry.