When millions or even billions of dollars are up for grabs, some individuals are willing to do whatever it takes to get their hands on them. But when these huge frauds become exposed, it can have devastating consequences for all involved. From the Bernie Madoff Ponzi scheme to the collapse of Lehman Brothers, financial scandals have shaped global markets and prompted calls for reform.
Enron’s notorious accounting practices stretched the limits of what is ethically possible, and when these were discovered, the company went bankrupt and the firm Arthur Andersen was forced to dissolve, resulting in investors losing trillions of dollars. The scandal also highlighted how tying executive compensation to short-term profits can lead to unethical behavior.
In the aftermath of the scandal, regulators called for stricter regulatory oversight and stronger compliance measures to prevent similar fraud in future. These reforms included more transparent financial reporting and greater scrutiny of corporate acquisitions.
The 1MDB scandal uncovered alleged embezzlement of billions from a Malaysian state fund and implicated high-level officials worldwide. Its revelations highlighted significant issues in global financial governance, including poor risk management, excessive debt, and conflicts of interest.
The scandal centered around the sale of mortgage-backed securities, which were financed by high-risk borrowers and bundled together into complex investments. When the loans defaulted, AIG was forced to bail out the company, and the subsequent mortgage crisis triggered the 2008 global financial meltdown. Sherron Watkins, who worked for Enron and was one of the company’s whistleblowers, received praise and recognition for her actions.
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