5 Biggest Corporate Frauds in US History

In this article, we take a look at the 5 biggest corporate frauds in US history. For a detailed and comprehensive analysis, go to 15 Biggest Corporate Frauds in US History.

5. Cendant

Estimated Losses: $19 Billion

Cendant Corporation became embroiled in a significant fraudulent financial reporting scheme, resulting in substantial losses for investors. This deceit was unveiled in April 1998 by the senior management of Cendant, which primarily consisted of former HFS executives. Over the course of 1985 until the discovery of the accounting fraud, the company submitted inaccurate and deceptive periodic reports to the SEC. These reports misrepresented the company’s financial performance by inflating operating income and earnings while concealing the fact that the financial data had been misrepresented.

4. MF Global

Estimated Losses: $41 Billion

As noted by PBS in May 2012, MF Global was a brokerage firm that collapsed in October 2011, losing about $1.6 billion of customer money in the process. The firm’s customers were mainly farmers, grain operators, and hedge funds who traded in commodities like wheat and corn. The company’s former CEO, Jon Corzine, tried to transform the firm into an investment bank and took risky bets on European debt that backfired.

3. Bernard Madoff

Estimated Losses: $65 Billion

Bernard Madoff, an American financier, stands as one of the most notorious fraudsters in the world. Madoff orchestrated the largest Ponzi scheme in recorded history, duping innumerable investors by misappropriating tens of billions of dollars over the course of several decades. His fraudulent scheme entailed paying investors returns derived not from genuine profits but from their own funds or those of fellow investors.

2. Enron

Estimated Losses: $74 Billion

Enron was an energy company that used complex accounting schemes and special purpose entities to hide billions of dollars in debt and inflate its earnings.

1. Lehman Brothers

Estimated Losses: $600 Billion

Lehman Brothers, a prominent investment bank, declared bankruptcy on September 15, 2008. The bank’s downfall was primarily a result of its high-stakes investments in subprime mortgages and various securities, rendering it vulnerable to substantial losses when the financial markets experienced a catastrophic collapse. This bankruptcy stands as one of the most significant financial scandals in the history of the United States. It symbolized the zenith of the subprime mortgage crisis, with far-reaching implications for Lehman Brothers, its stakeholders, the global financial system, and the broader economy.

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