Top Favorite Corporate/Accounting Scandals

[benjipwns]

LTCM is a classic, ZZZZ Best is hilarious, Bernie Madoff is obviously the king. Everything that came to a head in 2008 doesn't get the fire in my loins going because there's just too many players and the build up is too long.

South Sea Company is a good old one. Same with Mississippi Company from John Law. BCCI has a nice number of aspects to it with oil sheiks and drug cartels. Allied Crude Vegetable Oil is funny. So is how Barings collapsed. Pemex dumping oil into the gulf and then going "lol sovereign immunity" is solid.

But my top favorite is still Enron. A company that nobody knows how they make any income and doesn't really sell anything and fails to make a deal with Blockbuster Video that it counts as an asset and all sorts of other stuff, that also takes out Arthur Andersen with it for trying to cover up. While all the top names but Kenneth Lay are bailing out, and they're faking offices by moving employees around. And they make all sorts of front corporations which buy things from Enron using Enron stock as collateral. And then Enron goes "hey, we're good" posting 750% increase in revenues and everybody in finance is like "welp, alright, buy buy buy!"

Plus they named some of their fraud schemes JEDI and after velociraptors in Jurassic Park. And tried to trade weather.

Also, Ken Lay pulled a Clay Bennett, when the two companies that merged to form Enron he promised they wouldn't move out of Omaha. And he instantly moved them to Houston.

Also, Lou Pai.

My favorite part is still the whole "what do they sell to make money? I dunno, lets invest!" part. And another company still wanted to buy them in late 2001.

[benjipwns]

[Great Rumbler]

Enron's pretty much GOAT.

[benjipwns]

http://money.cnn.com/2006/01/13/news/companies/enronoriginal_fortune/

Along with "It" status come high multiples and high expectations. Enron now trades at roughly 55 times trailing earnings. That's more than 2 1/2 times the multiple of a competitor like Duke Energy, more than twice that of the S&P 500, and about on a par with new-economy sex symbol Cisco Systems. Enron has an even higher opinion of itself. At a late-January meeting with analysts in Houston, the company declared that it should be valued at $126 a share, more than 50% above current levels. "Enron has no shame in telling you what it's worth," says one portfolio manager, who describes such gatherings as "revival meetings." Indeed, First Call says that 13 of Enron's 18 analysts rate the stock a buy.

But for all the attention that's lavished on Enron, the company remains largely impenetrable to outsiders, as even some of its admirers are quick to admit. Start with a pretty straightforward question: How exactly does Enron make its money? Details are hard to come by because Enron keeps many of the specifics confidential for what it terms "competitive reasons." And the numbers that Enron does present are often extremely complicated. Even quantitatively minded Wall Streeters who scrutinize the company for a living think so. "If you figure it out, let me know," laughs credit analyst Todd Shipman at S&P. "Do you have a year?" asks Ralph Pellecchia, Fitch's credit analyst, in response to the same question.

"People who raise questions are people who have not gone through [our business] in detail and who want to throw rocks at us," says Skilling. Indeed, Enron dismisses criticism as ignorance or as sour grapes on the part of analysts who failed to win its investment-banking business. The company also blames short-sellers for talking down Enron. As for the details about how it makes money, Enron says that's proprietary information, sort of like Coca-Cola's secret formula. Fastow, who points out that Enron has 1,217 trading "books" for different commodities, says, "We don't want anyone to know what's on those books. We don't want to tell anyone where we're making money."

In addition to its commodities business, Enron has another division called Assets and Investments that is every bit as mysterious. This business involves building power plants around the world, operating them, selling off pieces of them, "invest[ing] in debt and equity securities of energy and communications-related business," as Enron's filings note, and other things.

Actually, analysts don't seem to have a clue what's in Assets and Investments or, more to the point, what sort of earnings it will generate.

[Joe Molotov]

The incorporation of THE UNITED STATES and the stripping of rights from sovereign citizens.

[benjipwns]

http://en.wikipedia.org/wiki/Battle_of_Blair_Mountain

(Image removed from quote.)

Yeah, but think about all the good that came about decades later.

[Kara]

Ponzi is my favorite, but I collected stamps as a kid.

[HyperZoneWasAwesome]

Enron's pretty much GOAT.

I sure fucking hope so, terrorists wish they could have damaged America as badly as those pricks did.

[Madrun Badrun]

http://en.wikipedia.org/wiki/South_Sea_Company

edit:  just realized benj mentioned it.   :'(  and I thought I was a unique snowflake for once.   :'( :'( :'(

[Human Snorenado]

The existence of the Federal Reserve and the unlawful income tax, of course

[Great Rumbler]

Clinton Foundation taking bribes in exchange for Secretary of State Hillary Clinton approving the sale of nukes to Iran.

Get it right, sheeple.

[Phoenix Dark]

No snitching.

[Olivia Wilde Homo]

I work with a lot of former Enron employees.  Apparently the pay and the benefits were fantastic.  Ken Lay had a bad reputation for being dishonest even during the "good" days and he wouldn't look anyone in the eye, which given what happened, makes sense.  Not sure if that was revisionist history or not but that's what they say anyway.

[I'm a Puppy!]

My fave was the one I had a personal stake in, nothing is as demoralizing to a company as watching the CEO carted off in handcuffs.

Can't share much. But I believe I told the story here about how one day we were not allowed to use our computers because we had "sold" them to one of our subsidiaries until 5pm at which point they would "sell" them back to us.  Good times guys. Good times.

[Kara]

I could listen to Bethany McLean talk about anything all day.

[benjipwns]

So that company that wanted to buy Enron even as it was falling apart also barely avoided bankruptcy before going bankrupt ten years later.

http://en.wikipedia.org/wiki/Dynegy#Near-bankruptcy_of_2002
http://en.wikipedia.org/wiki/Dynegy#2012_bankruptcy

[I'm a Puppy!]

Enron destoryed Arthur Anderson and a few other consulting firms. So it can't be all bad

[benjipwns]

I have always loved this guy: http://en.wikipedia.org/wiki/Barry_Minkow

While still in high school, he founded ZZZZ Best (pronounced "Zee Best"), which appeared to be an immensely successful carpet-cleaning and restoration company. However, it was actually a front to attract investment for a massive Ponzi scheme. It collapsed in 1987, costing investors and lenders $100 million—one of the largest investment frauds ever perpetrated by a single person, as well as one of the largest accounting frauds in history. The scheme is often used as a case study of accounting fraud.

After being released from jail, Minkow became a pastor and fraud investigator in San Diego, and spoke at schools about ethics. This all came to an end in 2011, when he admitted to helping deliberately drive down the stock price of homebuilder Lennar and was ordered back to prison for five years. Three years later, he admitted to defrauding his own church and was sentenced to an additional five years in prison.

The accountant who audited the company before it went public did not visit the insurance restoration sites himself. Had he done so, he would have discovered that they were mailboxes located throughout the San Fernando Valley.

When accountants wanted to inspect the company's operations, Minkow borrowed fake offices for a tour of "Interstate Appraisal Services" and used an incomplete building to present a fake restoration job.

At sentencing and in interviews with media, Minkow claimed that he committed securities fraud because he had become addicted to his migraine headache medication Oxycontin.

[Kara]

I swear this pause was unintentional.

[Brehvolution]

There is an extra special place in Hades for all these shitbags.

[Joe Molotov]

http://en.m.wikipedia.org/wiki/Bre-X

[HiResDes]

Big Pharm because they'll never get caught, ultimate swindlers

[studyguy]

My favorite corporate accounting scandal is the one that got me employed.
Some idiot in the job I'm in now sold like $50k  worth of shit (that we found anyway) under the table.

When I came in as a contractor, I ended up auditing the warehouse and it was like... the fuck. Nothing checks out. Call corporate, suddenly all these fake invoices show up in this mass of paperwork nightmare I dealt with. All that and the dude just got the boot. Nothing else. Meanwhile my ass has to do his job with only 3 weeks of training under my belt from the same guy who was pulling shady shit under the table.