What to do during the coronavirus lockdown? How about reading some unbelievable stories about how individuals and corporations pulled off some of the biggest financial scandals? If you enjoy dabbling in the dark sides of finance, are doing research for a college or school paper, or are simply looking for a distraction from all the negative news, I put together a number of entertaining financial scandals that have rumbled the world over the last century.
You may have read "Don't Fall for a Ponzi scheme" or "Best Finance Documentaries". It is mindblowing how many financial scandals shake the world economy, their respective industry, and investors. From a single-handed Ponzi scheme to corporate fraud, from stealing money from amateur and professional investors alike to selling fake wines.
It is obviously not the fraud that I enjoy, in fact, it is often stomach turning when you see what greedy individuals and corporations willingly do to others, it is more the fact that many, such as Bernie Madoff, get away with their scams and fraudulent activities for, in some cases, decades. It is also the manner in which these individuals and corporations draw many into their poisonous webs of deceit and how easy it is to fall for these schemes if you get too greedy and forget to step back and reflect before acting.
On Captain Finance, we are a community of people that enjoy growing their wealth, love investing, and understand the intricacies of finance. For the most part, I think we are quite level-headed and do our research before putting our hard-earned cash to work.
Finance and investing should, for the most part, be a series of calculated risks. What, however, when greed, irrationality, and a lack of research win the upper hand? For financial scandal at a time. Here the list of what is to come in the next few weeks. One financial scandal per week.
One of the biggest and most disgusting corporate scandals - Enron
This is probably why so many people despise capitalism, or at least, what they think it represents. Corporate greed at its worst. This company, its management, and its employees were literally willing to kill to make a buck. It did indeed end in numerous deaths. They even made a highly entertaining documentary about the self-proclaimed smartest people.
The Chairman of NASDAQ - one big Ponzi fraud - Bernie Madoff
The biggest Ponzi scheme in US history. One man, $ 65 billion stolen. Bernie Madoff, who was once the Chairman of NASDAQ pulled off the biggest con by a single person in US history. He bankrupted celebrities, average savers, and investment professionals alike. He also was the subject of documentaries and film.
The godfather of financial fraud - Ponzi
They are called Ponzi schemes for a reason. Named after this man, Charles Ponzi, a young, charismatic Italian immigrant to the USA, who scammed everyone, from the little guy to the richest. Not only once, but multiple times.
A former MCKinsey partner who went rogue - Raj Rajaratnam
He looked the part, but did not play by the rules. This former MCKinsey partner enriched himself through insider trading on the back of some of his clients.
A lonesome trader and France's Lehman Brothers - Jerome Kerviel
Jerome Kerviel allegedly almost brought one of the biggest French banks, Societe Generale, to its knees. He was accused of pulling it all off on his own. Whether you believe this to be true or not, this story also makes for a very intriguing and unbelievable scandal to rock the world of finances and beyond.
The Wolf of Wall Street - Jordan Belfort
The movie was entertaining, but what had happened to the many gullible investors was not. A boiler room operator, penny stock salesman who became Martin Scorsese's biggest box office hit by scamming people out of their savings.
The trader who brought down the Queen's bank - Nick Leeson
Ever wondered where the Queen of England keeps her money, or at least used to? Before Lehman Brothers, there was Nick Leeson - an employee at the Queen's bank who orchestrated the largest bank collapse in UK history. He did so all by himself. In fact, his story is so movie-like that Ewan McGregor did indeed play him in Rogue Trader.
The homemaker of insider trader - Martha Stewart
Not famous in Europe, but in the USA a staple of home-cooked meals and home deco, Martha Stewart spent some time in prison. She didn't really hurt anyone else, but used her contacts to make a quick buck. Why? Well, she used her contacts to make a hefty sum through some dodgy stock trading.
Image by Peter Duhon from New York City, USA / CC BY (https://creativecommons.org/licenses/by/2.0)
The biggest wine scandal - Rudy Kurniawan
This is a story about a young man who managed to scam wine connaisseurs, experts, investors, and auctioneers out of millions by simply rebranding cheaper wines. Apparently a convincing appearance can even fool insiders into splashing out their cash on worthless bottles of grape juice. Kurniawan's story was made into a documentary available on Netflix called Sour Grapes.
I will upload a new scandal each week. For the time being stay safe and enjoy the time with your loved ones.