Classic Financial and Corporate Scandals

Part 2

See also  Money in Fiction History of Money

Continued from Part 1

[The "Nigerian 419" Advance Fee Scam | Lottery / Sweepstake Offers | Orange County |
| Metallgesellschaft | |Morgan GrenfellNASDAQ Stock Market | NatWest Markets |
| Lloyd's of London and the Insurance Industry in general | Operation Wooden Nickel |
| Parmalat | | Maritime Fraud | Salomon Brothers & Treasury Bonds |
| The Savings and Loan or Thrifts Crisis | Smith Barney | Robert Maxwell |
|Pension Funds, Mortgages, Sub-Prime Crisis, Split Capital Investment Trusts, Precipice Bonds ... |
| Yasuo Hamanaka and Sumitomo Corp. |WorldCom | Miscellaneous ]

Go to Part 1


The Nigerian 419 Scam

Nigeria-Related Financial Crime: links with Britain by Michael Peel
This type of financial crime has become a large and pressing problem for the UK authorities. This 65 page report, by the independent research body Chatham House, looks at how it is currently tackled and makes recommendations as what further actions authorities might take. November 2006.
 
Technology giant Microsoft to help trace Nigerian email scammers
Microsoft will provide technical support and training to Nigeria’s Economic and Financial Crimes Commission (EFCC) who will in turn trace and prosecute those found guilty of e-mail scams. ABC Money, 16 October 2005.
 
Huge Nigeria scam trial collapses
Nigeria's biggest fraud case has been dismissed after the judge said he had no jurisdiction to hear it. Three people had denied stealing more than $242m from a bank in Brazil. BBC, 20 July, 2004.
 
$242m 419 scam trial collapses
A Nigerian judge dismissed to case against two people who, posing as the Governor and Deputy Governor of the Central Bank of Nigeria, defrauded Banco Noroeste in Brazil of $242 million. The judge claimed he had no jurisdiction to hear the case. 20 July 2004.
 
Nigerian email conmen fall into their targets' net
An article from the Observer about scam-baiting websites set up for the purpose of stringing fraudsters along and wasting their time. The Observer, November 16, 2003.
 
Nigeria - The 419 Coalition Website
A website created to fight the A Five Billion US$ (to date) worldwide Scam which has run since the early 1980's under Successive Governments of Nigeria.
 
Game Over
More information about the Nigerian 419 Scam from Brian Wizard who has written a book based on his investigations. More recently he has published a book with the title . Both are available as e-books from his website.
 
Advance Fee Nigerian (419) Frauds
Information from the Freeman Institute about the scams that are damaging to the reputations of legitimate African business people.
 
Unsolicited letters / faxes / emails from West and South Africa
Advice from Shropshire County Council Trading Standards Service on how to deal with the messages.
 
A Warning - the Nigerian Scam
A detailed explanation of how to recognise fraudulent e-mail messages offering financial rewards. It also includes some information about the role of Internet service providers (ISPs) and suggestions for reporting the senders of fraudulent messages.
 
Nigerian Business Offer
An explanation of the scam, including a copy of a typical e-mail message from the fraudsters, provided by About.com.
 
Nigerian Scam
More information about how the scam works.
 
Working the web: Scams
How to use the web to find information about the "Nigerian 419" scam, by Lucy Farmer, the Guardian, November 21, 2002.
 

Lottery / Sweepstake Offers

This is a variation of the "Nigerian" advance fee scam, above. Typically it starts with an unsolicited e-mail message telling you that you have won a large sum in a lottery you did not take part in.

International Lottery Scams
A warning from the US Federal Trade Commission for the Consumer of fraudulent messages about lottery winnings.
 
Lottery Scams
A directory of articles from different countries.
 
Lotter and Competition Scams
The New Zealand Ministry of Consumer Affairs maintains a long list of many of the known lottery scams.
 

Orange County

Philippe Jorion's Orange County Case
The author of the book Big Bets Gone Bad: Derivatives and Bankruptcy in Orange County, maintains this page which describes that bankruptcy and the role that value at risk could have played in preventing the calamity.
 

Metallgesellschaft

Re-examining the Metallgesellschaft affair and its implication for oil traders
The Metallgesellschaft AG (MG) affair of 1993-94 conveyed three central messages to the petroleum industry: one pertaining to the relationship between hedging and speculating, one pertaining to corporate governance, and one pertaining to commodity market dynamics. Ed Krapels, Oil & Gas Journal March 26, 2001
 

Morgan Grenfell

The Solv-ex Scam?
Solv-ex proposed to extract bitumen from oily sand. Peter Young, a money manager at Morgan Grenfell Asset Management, is said to have violated British securities laws by using several shell companies to purchase essentially all the shares offered by Solv-Ex.
 
Sold Short: Uncovering Deception in the Markets
A review of a book by Manny Asensio, a short seller, which contains information about connections between Morgan Grenfell and Solv-Ex.
 
City high flyer who heard voices urging him to change sex
A jury unanimously declared Peter Young unfit to stand trial and he was dismissed under the 1964 Insanity Act. The Guardian, January 25, 2002.
 
UK Fund manager faces fraud trial
Peter Young, aged 40, who sacked from Morgan Grenfell two years ago, was sent for trial by City of London magistrates on charges of conspiracy to defraud and alleged breaches of the Financial Services Act. BBC, April 30, 1999.
 

NASDAQ Stock Market

How the Journal of Finance broke the NASDAQ Scandal
In 1994 the Journal accepted for publication a study of Nasdaq spreads by two assistant professors. Then the fireworks began.

NatWest Markets

This affair involved the use of mispriced options to conceal losses. For a novel with a plot based on mispriced derivatives read Into the Fire by Linda Davies.

SFA Disciplines Natwest and 2 Individuals
The Securities and Futures Authority has concluded disciplinary proceedings against NatWest Capital Markets Ltd ("NWCM"), National Westminster Bank Plc, Kyriacos Papouis and Neil Dodgson. 18 May 2000. NatWest Capital Markets failed to spot losses totalling £90.5m that were concealed by overvaluing options.
 
Case Study: NatWest Markets
A detailed analysis by Eric Wolfe of how NWM's troubles started with a systematic mispricing of various options and swaptions by traders in its rate risk management group.
 

Lloyd's of London and the Insurance Industry in General

Lloyd's

European Parliament Report on the Lloyd's Petitions
10 July 2003. The rapporteur was Roy Perry MEP.
 
EU probes Lloyd's regulation
The European Commission (EC) has begun legal action against the UK government by askingfor more information about its regulation of the Lloyd's of London insurance market. BBC, 20 December 2001.
 
Fresh Allegations Surround Quackenbush, Lloyd's Payment
A new round of controversy over actions taken by former California Insurance Commissioner Chuck Quackenbush has been triggered by articles recently published in the Los Angeles Times. June 2001.
 
Lloyd's wins Names battle
Insurance market Lloyd's of London has won its multi-million pound legal battle with 200 'Names' - the individuals who pledged their wealth to support it. BBC, 3 November 2000.
 
The Decline and Fall of Lloyd's of London
A legendary institution has barely escaped bankruptcy and is now accused of perpetrating the greatest swindle ever. Time Magazine (Europe) 21 February, 2000.
 
The Truth about Lloyds
A web site produced by disgruntled Names or investors in Lloyd's of London claiming to tell the truth about the loss of approximately $20 billion in investors' funds since 1988.
 

Other Insurance Scandals

Michael Bright gets maximum seven years for Independent Insurance fraud
Michael Bright, the founder and former chief executive of Independent Insurance, has been sentenced to seven years in jail for committing fraud that helped to cause the company’s downfall with the loss of more than 1,000 jobs and costing the Financial Services Authority £357 million in compensation. The Times, October 25, 2007.
 
Marsh & McLennan to pay $850 million
The giant insurance broker has agreed to pay $850 million in restitution to policyholders harmed by its actions and adopt a new business model that avoids similar conflicts of interest. January 31, 2005.
 
 Aon Agrees to Pay $190 million to Settle Spitzer Allegations
Aon Corporation, America's second largest insurance brokerage, has entered into an agreement to resolve allegations of fraud and anti-competitive practices. March 9, 2005.

Operation Wooden Nickel

Wooden Nickel Announcement
The United States Attorney, Southern District of New York, announced the filing of criminal charges against 47 defendants. The arrests of many of the suspects were made after an 18-month undercover investigation, dubbed “Operation Wooden Nickel,” and principally involve a variety of alleged criminal conduct in the foreign exchange markets. November 19, 2003.
 
NYC traders face criminal charges
  Authorities have announced charges against 47 people, including traders from some of Wall Street's best-known firms, in a foreign currency trading scandal allegedly involving bogus transactions that officials say defrauded investors of millions of dollars. CNN, November 20 2003.

Parmalat

Financial Times Reports on Parmalat
An archive of articles on all aspects of the scandal.
 
Guardian Reports on Parmalat
Follow the development of the crisis as it was reported.
 
Q&A: Parmalat's troubles
Questions and Answers from the BBC.
 
How it went sour
The inside story of Parmalat, the biggest, most brazen corporate fraud in European history. Time Magazine, 7 December 2004.
 

Maritime Fraud

Global trade in phantom cargoes swindles banks of £500 million
The metals trader Madhav Patel and Solo Industries are accused of the biggest fraud in maritime history. From the Guardian October 31, 1999.
 

Salomon Brothers and the Treasury Bonds Scandal

Department of Justice and SEC enter $290 million settlement with Salomon Brothers in Treasury Securities Case
Salomon Inc. will pay $290 million to settle fraud charges stemming from its role in the US Treasury bond auction scandal in 1991. The settlement is one of the largest ever paid for wrongdoing in the securities industry. Department of Justice, May 20, 1992.
 
Wall Street: Swaggering into Trouble
Financial powerhouse Salomon Brothers digs a huge hole for itself by cheating in the most sacrosanct of markets. Time Magazine, August 26, 1991.
 

The Savings and Loan or Thrifts Crisis

The Greatest Stedilnica Crisis in History
An article about the Savings and Loan crisis by the Israeli economist Shmuel Vaknin.
 
The Looting of U.S. Saving and Loans
A series of articles by Franklin Mancusco.
 
Prudential-Bache Securities Scandal
An extract from the book Serpent on the Rock: The Shocking Truth Behind the Prudential-Bache Securities Scandal by Kurt Eichenwald, Harper Business. ISBN 0-88730-720-5. Kurt Eichenwald, an award-winning financial reporter for the New York Times, tells the explosive story behind Wall Street's most destructive scandal of the 1980s - the massive securities fraud perpetrated by Prudential Bache. Half a million people lost enormous sums and names like Onassis and Bush numbered among the victims.
 
The Savings and Loan Crisis
a select bibliography by Elaine Hopkins.
 

Smith Barney

Feds charge broker in $40 million Euroscheme
A federal grand jury in Houston has charged Harold Deavours, a former Smith Barney financial consultant with defrauding foreign investors of more than $40 million. An article from the Houston Business Journal, December 8, 1997.
 

Robert Maxwell

Israels Superspy: The Life and Murder of a Media Mogul
The British media tycoon was murdered by the Israeli secret services according to a book by Gordon Thomas and Martin Dillon which also alleges that Maxwell was an Israeli spy and had links to organized crime in Eastern Europe.
 
Layers of guilt peel off to reveal vipers in the Square Mile
The Maxwell report tars the City with the dirtiest of brushes. Anybody reading its damning conclusions could be forgiven for thinking the Square Mile is a nest of vipers ready to collude with any crook, facilitate any fraud, and pillage any pension fund. The Guardian, April 1, 2001.
 
Maxwell sons under fire in Mirror deal report
DTI inspectors appointed in 1992, following the tycoon's death, to investigate what happened to the £500 million raised by the Mirror Group from the flotation will finally report this week. The Guardian March 25, 2001.
 
Maxwell auditors and self-regulation: the verdict
By Prem Sikka, Professor of Accounting, University of Essex. The Maxwell story is the story of fraud and the watchdogs that routinely aped the three unwise monkeys.
 

Pension Funds, Mortgages, Sub-Prime Crisis, Split Capital Investment Trusts, Precipice Bonds

Pension Fund Scandals

In addition to the Maxwell case (see the previous section, above) there have been many other pension fund scandals.
Daily Telegraph articles on the Credit Crisis
The latest information on the crisis that started in the US subprime mortgage market.
 
UK Pensions Selling Scandals
Accounts of a range of cases from a website providing information about UK pensions.
 
High Court victory for pensioners
The court ruled that the government was wrong to completely reject the Parliamentary Ombudsman's report into collapsed pension schemes. BBC, 21 February 2007.
 
Q&A: High court pensions ruling
A summary of the conclusions and an outline of their implications. Guardian, February 21, 2007.
 
Trusting in the pensions promise: government bodies and the security of final salary occupational pensions
A report by the Parliamentary Ombudsman accusing the British government of maladministration. 15 March 2006.
 
Clamour for end to Equitable row
The government has come under pressure to respond to a report that called for a compensation fund for policyholders in Equitable Life. BBC, 31 October 2008.
 
Equitable Life Members Support Group
This website has been set up by a group of Equitable Life members as a non profit making, non commercial enterprise for the good of all those associated with the Equitable Life Assurance Society.
 
Tribunal slams Equitable Life trio
A former director for the insurance group was expelled from The Institute of Actuaries while two other senior figures were reprimanded after a tribunal found them in breach of its rules. 2 March 2007.
 
The Penrose Report
The report of the Equitable life inquiry, by Lord Penrose, published on 8 March 2004.
 
Equitable Life: the issue explained
A review of what went wrong. The Guardian, March 8, 2004.
 
The Prudential Regulation of Equitable Life
A report by the Parliamentary Commissioner for Administration or ombudsman.
 
Equitable Life: Timeline of the scandal
What was the sequence of events that saw the world's oldest insurer end in such dire disrepute? BBC, 8 February 2002.
 
Royal & Sun Alliance fined £1.35 million
The Financial Services Authority imposed on on Royal & Sun Alliance the largest fine yet in connection with the pensions mis-selling scandal of the 1980s. Abigail Townsend, The Independent, 27 August 2002.
 

Sub-Prime and other Mortgage Scandals

Financial Times / In depth / Subprime
Articles from the Financial Times on the fallout from the subprime mortgage crisis.
 
FT In Depth: Subprime
Reports from the Financial Times about the subprime mortgage crisis in the United States and its international effects.
 
Subprime mortgage crisis
An article from the Wikipedia.
 
The US sub-prime crisis in graphics
The downturn in facts and figures, from the BBC.
 
The Feds Pile On Freddie Mac
The Office of Federal Housing Enterprise Oversight, the U.S. Securities and Exchange Commission, the U.S. House of Representatives and a U.S. district attorney are all investigating a possible accounting scandal at Freddie Mac. Forbes, June 12, 2003.
 
Mis-sold endowments
A web page with advice for for people in the UK who may have been been mis-sold an endowment mortgage.
 
The £48bn mortgages scandal
British homeowners will be forced to find £48 billion from their own pockets over the next 15 years to make good the mortgage shortfalls caused by poorly performing endowments, a Financial Mail survey revealed. 22 June 2003.
 

Split Capital Investment Trust Scandals

Split Capital Investment Trusts
A series of special reports from the Guardian newspaper.
 

Precipice Bond Scandals

FSA fines Capita Trust Company Ltd £300,000 for mis-selling precipice bonds
An account of the case from the FSA website, 20 October 2004.
 
Precipice bonds
Another series of special reports from the Guardian.
 

Sumitomo Corp.

UK metal brokers accused of rogue trade complicity
Japanese conglomerate Sumitomo is accusing a handful of senior UK metals brokers of dishonestly assisting one of the largest rogue traders ever to operate through the London markets - convicted copper dealer Yasuo Hamanaka. Guardian, October 4, 2004.
 
Sumitomo sues Chase and UBS
The Sumitomo Corp. filed a lawsuit in Manhattan federal court against Japanese bank seeks $760M for alleged copper-trade abuses; UBS rejects claim. 3 June 1999.
 
Merrill Settles Copper Suit
The Sumitomo Corp. filed a lawsuit in Manhattan federal court against Merrill Lynch & Co. agreed on Wednesday 30 June 1999 to pay $25 million to the U.S. Commodity Futures Trading Commission and the London Metal Exchange to settle allegations of involvement in Sumitomo Corp.'s efforts to fix copper prices more than three years ago.
 
How Copper Came a Cropper
Sumitomo's robber-baron tactics make the case for regulation. By Paul Krugman.
 

WorldCom

Tearful Ebbers gets 25 years
Ebbers is the highest-ranking of six WorldCom executives and accountants who were charged by federal prosecutors in the fraud. Seattle Times, July 14, 2005.
 
Fall guy Ebbers
A leader on the conviction of Bernard Ebbers, the former chief executive of WorldCom, was found guilty by a US federal jury of fraud charges related to the $11bn accounting scandal at the telecommunications company. Silicon.com, March 16, 2005.
 
Trial hears of books cooked at WorldCom
WorldCom's former boss Bernie Ebbers ordered adjustments to the company's books, the telecoms firm's ex-financial chief has testified at a fraud trial in the United States. The Scotsman, 9 February 2005.
 
WorldCom files for bankruptcy
Telecoms firm takes title of America's biggest corporate failure from Enron as it seeks protection from creditors. The Guardian, July 22, 2002.
 
The WorldCom trial
An Accountancy Age special report.
 
WorldCom's woes
A Forbes special report.
 
Guardian Special Reports: WorldCom
A series of articles from about the WorldCom crisis.
 

Miscellaneous

Harpooning a (London) Whale new!
Nigel Cannings on the implications of the affair. Huffington Post, 20 September 2013.
 
JP Morgan's $6.2bn loss caused by 'deceptive conduct'
“Deceptive conduct” by JP Morgan‘s London staff was to blame for the $6.2bn (£4.1bn) trading loss racked up last year, the former head of the division responsible told Congress. The Telegraph, 16 March 2013.
 
Bruno Michel Iksil a London Based Trader behind JP Morgan's $2bn loss?
Speculation is mounting that a British-based trader dubbed 'Voldemort' is behind a $2billion loss for America's largest bank. The man, also nicknamed the 'London Whale' and the 'White Whale', is suspected by financial analysts of making massive and hugely risky trades for JPMorgan Chase when he should have been mitigating risk.
 
London Whale Harpooned: Iksil On His Way Out At JPMorgan
The London-based trader at the center of JPMorgan Chase’s $2 billion trading loss will be leaving the bank, according to reporting by The New York Times, although he still remains employed there. Forbes, 16 May 2012.
 
SFO offered to do £50m deal over Tchenguiz arrests
The SFO investigation into the Tchenguiz brothers centres on their dealings with Icelandic bank Kaupthing in the lead up to its collapse in four years ago. It is alleged the SFO offered to announce it had dropped its investigation if Robert Tchenguiz donated £50m to charity. Telegraph, 18 May 2012.
 
US hedge fund pays SEC $600m to settle insider trading allegations
Hedge fund titan Steven A Cohen's firm, long the focus of a federal investigation into insider trading, is paying more than $600m to US securities regulators to settle allegations arising from improper trading in two stocks. Guardian, 15 March 2013.
 
Prepared Remarks of Assistant Director in Charge Janice K. Fedarcyk on Insider Trading Arrests
An account of developments in “Operation Perfect Hedge,” the FBI’s systematic targeting of insider trading in the hedge fund industry. FBI New York, January 18, 2012.
 
Raj Rajaratnam: stunning downfall for 'king of kings'
Raj Rajaratnam who has been convicted of insider trading had amassed a fortune of just over $1bn (£611m) by creating one of the biggest hedge funds in the world – Galleon. Guardian, 11 May 2011.
 
Kabul Bank fraud: consultants ignored warning signs, report says
US government watchdog says action by consultants could have reduced losses. Guardian, 11 May 2011.
 
The Afghan Bank heist
A secret investigation may implicate dozens of high-ranking government officials, by Dexter Filkins, the New Yorker, February 14, 2011.
 
Ex-Dresdner financier given longest ever jail term for insider trading
Former Dresdner Kleinwort Wasserstein corporate financier Christian Littlewood has been jailed for three years and four months for his role at the centre of an eight-year insider dealing ring involving his wife and her best friend. His sentence is the longest term handed down in the UK for insider trading since the Financial Services Authorities took over responsibility for prosecuting the offence. Guardian, 3 February 2011.
 
Windle Stops Swindle by Permanent TSB - £339 Million Fraud
TSB Dublin and Cork & Limerick Savings Bank defrauded most depositors from 1958 to 1993 by paying less than the advertised interest on the savings and investment accounts. This website gives a very detailed account of the case, including the long period in which various regulatory authorities and judges failed to put an end to the scandal, the convictions of some of the people involved, and the eventual outcome.
 
FSA is 'losing' war on insider dealing
A string of successful convictions, three live court cases and a series of high-profile raids has made little impact on insider trading in the City, according to one of the finance industry's biggest trade organisations. Daily Telegraph, 22 April 2010.
 
FSA charges seven over '£2.5m insider-trading ring'
Seven men, including two former print room workers of JP Morgan Cazenove and UBS, have been accused of making £2.5m from trading on inside information. Daily Telegraph, 31 March 2010.
 
MG Rover: how the Phoenix Four hit the jackpot
The report into demise of the British car manufacturer reveals that the owners bought software to wipe clean hard drives and ran tax avoidance schemes. Guardian, 11 September 2009.
 
Merrill Lynch trader is suspended over £120m rogue currency deals
Alexis Stenfors, a currency investor working for Merrill Lynch in London, has been suspended in an inquiry into “trading irregularities” with losses that could reach several hundred million dollars. The Times, 7 March 2009.
 
Allen Stanford jailed for 110 years for $7bn Ponzi
Disgraced tycoon Allen Stanford has been sentenced to 110 years in jail for operating a Ponzi scheme that defrauded investors of more than $7bn (£4.5bn).BBC, 14 June 2012.
 
Stanford Accused in $8 Billion Fraud
Sir Allen Stanford, the Antigua based American billionaire, philanthropist and cricket promoter and enthusiast, has been accused of a massive, $8 billion fraud by the U S Securities and Exchange Commission (SEC). 19 February 2009.
 
Bagger: Seven years for vast fraud
The former CEO of the now defunct IT Factory, Stein Bagger, has been found guilty as charged on 61 counts of fraud and forgery of almost one billion kroner and sentenced to seven years in prison, had DKK 50 million confiscated, was ordered to pay court costs and is not permitted to run a company again. Politiken, 12 June 2009.
 
Executive Bagger Pleads Guilty in Denmark’s Biggest Fraud Case
Stein Bagger, the chief executive officer of bankrupt Danish computer firm IT Factory A/S, pleaded guilty to fraud charges in what local media are describing as the country’s biggest ever white-collar criminal case. Bloomberg, December 16, 2008.
 
Hedge funds lose billions as VW share price dives
Hedge funds nursing multi-billion-dollar losses from a wrong-way bet on Volkswagen shares have launched a furious attack on the German financial authorities, branding their handling of Porsche’s move to control its rival as a "fiasco" and "criminally irresponsible". Daily Telegraph 30 October 2008.
 
Watchdog on alert after Volkswagen shares plunge
Germany's financial services authority, BaFin, launched a formal investigation yesterday into alleged market manipulation in Volkswagen shares after the carmaker's stock lost almost half its value. VW shares slumped 45% to €517 after Porsche, a suspected villain behind frenzied trading in recent days, said it would offer up to 5% of the Volkswagen options it held. Guardian, October 30 2008.
 
Rogue trader Matthew Piper lost Morgan Stanley £60m suspended
Matthew Piper, a rogue trader who lost Morgan Stanley, one of the City's biggest banks around £60 million, has been suspended after over-estimating the profits he had earned from his investments at the end of each trading session. Daily Telegraph, 20 June 2008.
 
Rogue traders in £1.4bn bonus scandal
Credit Suisse, a leading City of London investment bank has uncovered a £1.4bn scam by rogue traders desperately trying to protect their bonuses. Evening Standard, 20 March 2008.
 
France investigates EADS ex-boss
French judges have placed Noel Forgeard, the former co-head of Airbus owner EADS, under formal investigation over allegations of insider trading. BBC 30 May 2008.
 
Robert Vesco
A biographical article about the fugitive American financier who was responsible for one of the biggest frauds in history. Guardian, May 21 2008.
 
Police probe £70 million fraud at HSBC
Police are investigating an alleged attempted fraud at Britain's biggest bank, HSBC Holdings. Jagmeet Channa, 25, was charged with conspiracy to defraud, money laundering and abusing a position of trust. Reuters 1 May 2008.
 
Infirmed seniors, elder abuse, estate fraud and legal reform
A directory of resources on the problem of exploitation of the elderly in the United States. (The problem is obviously not unique to America and therefore some of the resources may be of interest to people around the world).
 
National Association to Stop Guardian Abuse
A blog on the subject of exploitation of the elderly.
 
US music mogul admits $300m fraud
Pop music mogul Lou "Big Poppa" Pearlman admitted in a Florida court that he had defrauded thousands of people – and 10 or so banks - out of hundreds of millions of dollars over about 20 years. As part of his scam, Pearlman created his own accounting firm, independent auditors and even a German bank to fool investors. Guardian, March 7 2008.
 
The 20 biggest trading disasters
Information from Bloomberg, Daily Telegraph, 24 January 2008.
 
Rising scandal threatens to engulf Siemens' chairman
The corruption scandal engulfing Siemens grew when angry shareholder groups' demanded the resignation of the German group's supervisory board chairman and investors said they had lost confidence in the firm's chief executive. The Guardian, December 14, 2006.
 
Siemens Scandal May Involve Top Executives
Investors demand action after a testimony that high-level Siemens management and members of the company's anti-corruption division knew about illegal funds for kickbacks. Deutsche Welle, 27 November 2006.
 
Online bank fraud up by 55%
Losses from online banking fraud have risen sharply following a surge of nearly 1,500% in the number of bogus bank websites used by criminals to plunder people's accounts, new figures from APACS in the UK show. The Guardian, November 7 2006.
 
Fairfax suit takes another twist
The normally media-shy Fairfax created a stir by filing a $6-billion (U.S.) lawsuit against several powerful U.S. hedge funds and a pair of their “shadowy operatives" but one of them, Spyro Contogouris, claims he was working on a special assignment for the FBI. Globe and Mail, 3 October 2006.
 
World's hedge funds face crisis as Refco suspends trading
A crisis in the world's hedge fund industry is in prospect after one of the world's largest derivatives brokers is forced to freeze trades potentially worth billions of pounds. Guardian, October 14, 2005.
 
Can Refco Get Off the Ropes?
With Phillip Bennett its former CEO charged in a securities fraud scheme and its stock price in free fall the future of the the derivatives broker is in doubt. Business Week, October 12, 2005.
 
City firm faces £100m rogue trader action
Man Group, the hedge fund manager regarded as the heart of London's new financial establishment, has been accused of trying to conceal a "rogue trader" style scandal involving one of its senior employees. Guardian, October 1, 2005.
 
Perelman wins Morgan Stanley case
Billionaire financier Ron Perelman won $604.3 million in compensatory damages yesterday in a lawsuit accusing the investment bank Morgan Stanley of duping him about a takeover deal. Seattle Times, May 17, 2005.
 
UK police foil massive bank theft
Police in London foiled a plan to steal £220m ($423m) from the London offices of the Japanese bank Sumitomo Mitsui. Computer experts are believed to have tried to transfer the money electronically after hacking into the bank's systems. BBC, 17 March 2005.
 
Fraud trial for Spanish bank boss
A judge has ordered Spain's top banker, Emilio Botin, chairman of Santander Central Hispano, to stand trial on charges of tax fraud. Mr Botin, has been leading the Spanish bank's recent bid for the UK's Abbey. BBC, 6 October 2004.
 
Former CA software chief charged
The former chief executive of US software firm Computer Associates has been charged with securities fraud over a $2.2bn (£1.2bn) accounting scandal. BBC, 22 September 2004.
 
Fraud-finder general rides in by taxi
According to Howard Palmer, an expert witness in fraud cases and a former banker, there is a wave of insider crime engulfing London's banks. Daily Telegraph, 4 September 2004.
 
Shell's shame: FSA spells out abuse
Regulator confirms £17m fine and accuses group of 'unprecedented misconduct' in oil and gas reserves scandal. Guardian, August 25, 2004.
 
FSA fines Citigroup £13.9 million (€20.9 million) for Eurobond trades
The fine was imposed because of Citigroup's controversial trades the previous year. 28 June 2005.
 
Criminal probe on Citigroup deals
Traders at US banking giant Citigroup are facing a criminal investigation in Germany over the controversial government bond deal. BBC 25 January 2005.
 
Citigroup faces regulatory probe
The UK's Financial Services Authority (FSA) has launched a formal investigation into "unusual trading activity" by Citigroup. The FSA's focus will be on trades in the European government bond and derivatives markets. BBC, 18 August 2004.
 
Marks & Spencer share trading
Mark Tran explains all the background to allegations of illegal insider dealing at M&S. Guardian, June 28, 2004.
 
Versailles Group's founder jailed for swindling millions
Carl Cushnie has been jailed for six years for swindling millions of pounds out of investors at the finance company which he founded. BBC, 9 June 2004.
 
Fall from grace of Labour favourite whose fortune was built on fraud
Founder of failed Versailles group convicted of defrauding backers of £23 million. Guardian, May 26 2004.
 
Securities and Exchange Commission v. Roys Poyiadjis, Lycourgos Kyprianou and AremisSoft Corp.
The US Securities and Exchange Commission accuse two officers of AremisSoft of engaging in massive insider trading.
 
Justice for all means copier dealers too
Details of a allegations against Savin (Ricoh-USA) involving stolen purchase orders and fraudulent invoices.
 
Trader jailed over £152m NAB rogue deals
Luke Edward Duffy, former head of currency trading at National Australia Bank, the country's largest was has been jailed for 29 months for his part in a rogue-trading scandal that cost the lender A$360m (£152m). Evening Standard, 16 June 2005.
 
Scandal-hit NAB drops takeover
National Australia Bank yesterday revealed that its "rogue trader" scandal will cost it A$360m (£154m), as it gives up its chance to take over Australian financial services firm AMP. Guardian, January 28, 2004.
 
Like the Natwest case the rogue trades at the National Australia Bank involved the use of mispriced options to conceal losses. For a treatment of mispriced derivates in fiction read Into the Fire by Linda Davies.
 
Wall Street Follies: Diagrams to help you make sense of it all
ImClone, Martha Stewart, Merrill Lynch, Enron, Arthur Anderson, Global Crossing, Tyco, WorldCom, Adelphia, et. al.
 
Pensioner guilty of $2.5 trillion fraud plot
A British pensioner was yesterday convicted of trying to pull off one of the biggest frauds in history, using $2.5 trillion worth of faked US government bonds. Guardian, 19 September 2003.
 
Keeping tainted money from corrupt Polly Peck tycoon shames the Tories, says ex-Treasurer
Lord McAlpine, the man who was Tory Treasurer when the party accepted almost £500,000 from corrupt Polly Peck tycoon Asil Nadir, said last night that David Cameron was under a ‘moral duty’ to give the money back. Daily Mail, 24 August 2012.
 
Former Polly Peck tycoon Asil Nadir jailed for 10 years
Former fugitive tycoon Asil Nadir has been jailed for 10 years today after a judge said he stole millions out of “pure greed”. The Independent, 23 August 2012.
 
Lonely and marooned, tycoon risks a long stretch in prison
Asil Nadir built a business fortune, was feted by the government - and fled to Cyprus when his Polly Peck empire crumbled. Guardian, September 3, 2003.
 
Polly Peck auditors fined
Three accountants involved in auditing parts of Polly Peck, the conglomerate run by Asil Nadir which collapsed more than a decade ago, have been reprimanded and fined by their regulatory body. Guardian, May 1, 2003.
 
Dutch authorities probe Ahold
Dutch prosecutors have started a probe into the accounting irregularities at embattled Dutch retail giant. BBC, 16 April 2003.
 
Ahold shaken but not toppled by accounting scandal
After revealing Europe's worst accounting scandal, the future of Dutch food giant Ahold looks shaky. 2 March 2003.
 
SEC investigates €500m Ahold scandal
Ahold, one of the world's biggest retailers, was last night facing a series of regulatory investigations and lawsuits following the discovery of a multimillion-euro accountancy scandal at its US operations. Guardian, February 27, 2003.
 
Soros found guilty of insider trading
Billionaire financier and philanthropist George Soros has been fined 2.2m euros (£1.4m; $2.3m) for insider trading. BBC 20 December, 2002.
 
HIH Royal Commission
Links to stories about the Royal Commission investigating the $2.8 billion collapse of HIH Insurance, the largest corporate failure in Australian history.
 
Martha Talks
A website set up to defend Martha Stewart and support her appeal against conviction. It contains a lot of material on why her trial was unfair.
 
Martha Pal Gets 7-Year Jail Term
ImClone Systems Inc. founder Samuel Waksal has been sentenced to more than seven years in prison and ordered to pay almost $4.3 million because of his role in the insider trading scandal that engulfed members of his family and led to the indictment of his friend Martha Stewart. CBS News, 10 June 2003.
 
Five months jail for Stewart
Martha Stewart was sentenced for lying to police over an alleged insider-dealing scam. Guardian, July 16, 2004.
 
Cooking Martha's goose
The Martha Stewart scandal may cripple a media empire built on an image of perfection. The Economist, September 12, 2002.
 
The Corporate Scandal Sheet
With the avalanche of corporate accounting scandals that have rocked the markets recently, it's getting hard to keep track of all the transgressions. The Corporate Scandal Sheet does the job.
 
WorldCom scandal one of many
It may be involved in the biggest accounting debacle ever, but financial scandals are nothing new. CNN, June 27, 2002.
 
Wall Street scandals at a glance
A brief review of each of the main scandals from Enron onwards. BBC, 26 June 2002.
 
Schemers And Scams: A Brief History Of Bad Business
A brief outline of notable cases from Charles Ponzi in 1920 to price fixing by Sotheby's and Christie's in 2000. Fortune, March 2002.
 
Former Tyco CEO gets up to 25 years for theft
Former Tyco International CEO L. Dennis Kozlowski and finance chief Mark Swartz have been sentenced to eight and one-third to 25 years for stealing hundreds of millions of dollars from the company. Seattle Times, September 19, 2005.
 
Tyco finds new accounting hole
The huge industrial group Tyco has discovered a new black hole to add to its accounting scandals. BBC, 30 April 2003.
 
Tyco ex-bosses hit by more charges
Three former executives of Tyco, including its ex-chief executive, Dennis Kozlowski, have been indicted for running a "criminal enterprise" that stole millions from the firm. BBC, 12 September, 2002.
 
The Secret World of Mike Milken
by Edward Jay Epstein.
 
Merrill settles in share tipping row
Investment bank Merrill Lynch has said it is to pay $100m to settle an investigation by the New York attorney general into allegations its analysts misled tech stock investors. BBC, 21 May 2001.
 
PM slams central bank over Trade Bank collapse
Prime Minister Ariel Sharon criticised the Bank of Israel at a government meeting, in which the ministers discussed the collapse of Trade Bank. 27 May 2002.
 
Kim's Fall from Grace at Daewoo
Prosecutors allege that Kim and his associates organized what they believe is Asia's biggest single financial fraud - false accounting between 1997 and 1998 that inflated the value of the Korean company's equity by $32 billion. Business Week, February 19, 2001.
 
Credit Suisse unit found guilty in Japan
A Japanese court found Credit Suisse Financial Products guilty of obstructing a government inspection. The Tokyo District Court also ordered the defunct unit's parent to pay a fine of $333,490, or ¥40 million. March 8, 2001
 
The Woes of Martin Armstrong
The feds say the former offshore hedge fund manager scammed investors out of $1 billion. But the imprisoned armstrong says he’s only guilty of knowing the whereabouts of too many financial skeletons.
 
The Martin Armstrong Defense Fund
A web site was started by friends and clients of Marty Armstrong who feel that he is being sacrificed on the "regulatory altar" by those much more influential and powerful than he
 
Republic Ducked Red Flags?
According to the Wall Street Journal, Republic New York Corp. took on investment advisor Martin A. Armstrong who is accused of defrauding Japanese investors of about $1 billion, even though red flags prompted a competitor to stop doing business with him.
 
"Princeton Note" Securities/Rico Litigation
In December 2001, the claims of the Princeton Note investors against the company owned by Martin A. Armstrong were settled.
 
The Pullman Group files Multibillion Dollar Lawsuit
The inventor of Bowie bonds claims that other firms have stolen his ideas.
For background information about Bowie bonds, in fact and in fiction, see Something Wild.
 
A West Virginia Coal Town's Boom Turns to Bust
An article about J. Knox McConnell and the rise and fall of the First National Bank of Keystone which may rank among the 10 biggest American bank failures of the past 20 years.
 
Keystone Hearing Draws Media from Near and Far
A hearing for two former officials of the failed First Bank of Keystone was held on 23 November 1999.
 
Silver Speculators
A brief account of the attempt by Nelson Bunker Hunt and William Herbert Hunt to corner the world market for silver in the 1970s.
 
American convicted in arson killing of billionaire in Monaco
Ending a mystery over the death of the banker Edmond Safra, his American nurse has been found guilty of the fatal arson attack. 5 December 2002.
 
Microsoft Financial Fraud
According to Bill Parish: Microsoft is a great company with terrific employees. Sadly, many of these brilliant people ... [are] .. unable to see that Microsoft is also the key architect of the greatest financial fraud/pyramid scheme this century.
 
Citigroup Merger Scheme
Another article by Bill Parish who argues that the scheme will disable Microsoft and Cisco Systems, destroy consumer privacy and unplug the New Economy.
 
A Century of Greed
Scams, scandals and swindles: a look at the seamy side of 20th century wealth by Martha Slud, CNN, December 29, 1999.
 

Go to Part 1 of Classic Financial Scandals


[ top ]
[ Financial Scandals Home Page ]
[ Banking Thrillers by Linda Davies ]
[ History of Money ]
[ Biography of Glyn Davies ]
[ Other Money links - Past, Present & Future ]
[ Roy Davies' Home Page ]
Roy Davies - last updated 28 September 2013.