The 3 biggest financial scandals in the world

1 Bernard Madoff - Bernard L. Madoff Investment Securities LLC As the investigators of the FBI in 2008, in the New York residence of the then highly regarded I

The 3 biggest financial scandals in the world
1 Bernard Madoff - Bernard L. Madoff Investment Securities LLC

As the investigators of the FBI in 2008, in the New York residence of the then highly regarded Investor Bernard Madoff arrived, they thought that it was a misunderstanding. There had to be an explanation for Madoff's innocence. The but there were not. Instead, the exchange confessed to broker without further ADO, to investors,*in the course of the years with a snow ball system to 65 billion dollars conned.

As it flew up the scandal? Everything went well, until in the Wake of the 2008 financial crisis, many investors have*to have your invested capital back. The Problem was that Madoff had paid out the money after a Ponzi scheme long as the profit to other investors*interior. And he is now 7 billion US dollars were missing. His sons, who worked as senior employees for him, he said:

"I'm going to turn myself in to the authorities". Prior to that, he wanted to pay off the last remaining money to his assistants, relatives and friends. His sons prevented this, and agreed to a lawyer. A few days later the FBI arrived.

The Trick? Madoff enjoyed among the traders, the reputation of a legend and fought for more independence of the sector. That helped him, the super-rich to win, he recruited a network of (Hand-paid) agents in Golf clubs. The message about the amazing returns of the asset Manager spread quick on the openings and Cocktail Parties. Especially in the state of Florida, where many of the wealthy have Americans*inside their cottages: "When you went to lunch in the Club or on the Golf course, everyone spoke about Madoff and how he earned money for you", quoted in the Handelsblatt, a group of investors. Everyone wanted to invest after such a Party in the case of Madoff.

In December 2008, Madoff was arrested and sentenced to 150 years in prison for investment fraud ( The majority of investors*the interior are still waiting for their money. His son Mark Madoff committed suicide in 2010, two years after the arrest of his father, suicide.

2, Nick Leeson - Barings Bank

With windy, prohibited speculation on the Japanese benchmark Nikkei the British currency trader Nick Leeson, the tradition of Bank Barings in the British branch office in Singapore, brought losses in the amount of 1.4 billion US dollars. This was many times more than the Bank had capital available, so they had to file for insolvency (stock-ARD) and as a result of the scandal, her business stopped.

The Trick? About account 88888, which was not recorded due to a computer manipulation, managed to Leeson to hide the losses from his speculation. Later, he faked on the basis of forged letters in business relationships with third parties, in whose behalf he allegedly led the speculation by. Although Leeson disguised his business only amateurish, it was the Headquarters in London also after several internal audits. Until the losses were so great that Leeson invested in highly risky transactions that would have yielded a high profit, if the Nikkei Index had stabilized at over 19,000 points. The fact of the Nikkei Index, but is not. And Leeson even more loss accumulated derivatives. The Nikkei Index fell more and stay at leesons flew on.

The Forex traders fled the Brunei, Thailand and Abu Dhabi to Germany, where he was finally at the airport in Frankfurt-on-2. March 1995 arrest and after Singapore was delivered. The verdict: six and a half years in prison for forgery, breach of trust and fraud. Leeson was dismissed after a diagnosis of cancer prematurely, wrote a book and made a Film about his life ("Rogue Trader") and still gives seminars on the topic of stress management and risk management (exchange-ARD).

3 Jérôme Kerviel Société Générale

5 billion Euro loss had retracted the major French Bank, as at 24. January 2008, the fraud scandal of your employee publicly made.

The Trick? Kerviel bet in speculation on rising share prices. At the beginning, he made gains, in January 2007, his bets are more risky were: So he accumulated at the end of the year, while 1.4 billion euros in profits, but was a use of 30! Billion Euros. This does not came out, he continued with his transactions, the existence of the entire Bank on the game, he hid his profits with fictitious counter-transactions that were allegedly losses. From his superiors, no one was, allegedly, something, not, as 1.4 billion euros more in the till were. However, at the 3. In January 2008, the Trader made a mistake. His bosses are looking into the order books and found that in open positions in the amount of 50 billion euros are. A few days later, a chalk-pale Société-Général-chief must pray for its shareholder*to excuse. His Job he is (Handelsblatt).

Kerviel is sentenced in first instance to five years in prison. He also has to pay 4.9 billion euros. But after a few months, he comes with an electronic ankle bracelet on. And the good news are piling up for him: he is awarded compensation in the amount of 450,000 euros, because the notice of his employer was not lawful. Instead of the 4.9 billion Euro, so a court ruled a few months later, he figures the Société Générale group, only a Million Euro. The reason: Kerviel was only partially liable for the damage, because too many internal control mechanisms had failed. Kerviel had set in the course of his process, always ensure that the system failure of the Bank to have made his Deals possible in the first place (stock exchange ARD).

This article by Sonja Baer

*The post "The 3 biggest financial scandals around the world," was written and published by LOOT. Contact with the executives here.

Date Of Update: 17 July 2020, 00:26