What’s the worst financial scandal of all time?
That’s the question the Huffington Post is asking – and they want your nominations and votes for the most offensive!
They’re currently offering the ability to vote on a number of scandals, including:
- Libor - The London Interbank Offered Rate is an average interest rate that’s used by banks. It’s calculated by a process whereby all the major London banks submit information which is aggregated. The issue was the discovery that some banks were inflating or deflating their rates to profit or suggest they were more creditworthy than they actually were - see more.
- Enron – In 2001 it transpired that the huge organisation Enron was committing financial fraud. The impact of this revelation saw the end of Enron, the end of Arthur Andersen (their accountants) and contributed to the creation of the Sarbanes-Oxley Act, 2002 – see more.
- Bernie Madoff - Madoff was sentenced to 150 years in prison as a result of his ponzi scheme that defrauded investors of billions. His crimes included 11 federal felonies but the most significant impact was felt by the individuals who’d trusted him with all their money – see more.
- Subprime Mortgage Crisis – Around 2007 it became clear that a serious problem had been building in the mortgage industry. Mortgages had been given to many people who couldn’t really afford them. The mortgage debts had been packaged up and sold on in complex packages and chains of resales until, in hindsight, nobody really understood who owed what to whom, which became a crisis when loads began to default and the market collapsed – see more.
- Charles Ponzi – In the UK we call it a pyramid scheme, in the US we call it a Ponzi scheme. Charles Ponzi was one of the earliest pyramid-schemers. In the early 1920′s he began selling discounted postal reply coupons, using later investors money to pay back the early investors. Ponzi was charged with 86 counts of mail fraud but, upon pleading guilty, only received 5 years in prison – see more.
- Nick Leeson – Leeson was sent to Singapore by Bearings Bank where, unusually, he ran both their front and back office. Initially extremely successful, he covered up a mistake by a junior member of staff by creating a rogue account in which to hide it. Further mistakes and losses were also hidden here and, as the losses became more signficant Leeson gambled even harder to try to make back the money. By 1995, the losses were so large that the Bank collapsed, shortly after Leeson went on the run with his wife. They were arrested shortly thereafter and Leeson spent a number of years in jail before publishing his book, Rogue Trader - see more.
But if your idea isn’t on their list you can add it to their comments section.
Why not hop over and have a look (here)?!
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