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List of corporate collapses and scandals

From Wikipedia, the free encyclopedia

A corporate collapse typically involves theinsolvency orbankruptcy of a major business enterprise. A corporate scandal involves alleged or actual unethical behavior by people acting within or on behalf of a corporation. Many recent corporate collapses and scandals have involved some type of false or inappropriateaccounting (see list ataccounting scandals).

List of major corporate collapses

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The following list of corporations involved major collapses, through the risk of job losses or size of the business, and meant entering intoinsolvency orbankruptcy, or beingnationalised or requiring a non-market loan by a government.

NameHQDateBusinessCausesAssets
Medici BankFlorence1494BankingOwned by theMedici family, it ran up large debts due to the family's profligate spending, extravagant lifestyle, and failure to control the managers.
Mississippi CompanyFranceSep 1720ColonialismScottish economistJohn Law convinced the French government to support a monopoly trade venture inLouisiana. He marketed shares based on great wealth, which was highly exaggerated. A speculative bubble grew and then collapsed, and Law was expelled.
South Sea CompanyGreat BritainSep 1720Slavery andcolonialismAfter theWar of Spanish Succession, Great Britain signed theTreaty of Utrecht 1713 with Spain, ostensibly allowing it to trade in the seas nearSouth America. In fact, barely any trade took place as Spain renounced the Treaty, however, this was concealed on the British stock market. A speculative bubble saw the share price reach over £1000 in August 1720, but then crash in September. A Parliamentary inquiry revealed fraud among members of the government, including theConservative PartyChancellor of the ExchequerJohn Aislabie, who was sent to prison.
Dutch East India CompanyBatavian Republic31 December 1799ColonialismThis huge early publicly listed multinational company founded in 1602 fell victim to declining markets in the late 18th century, internal corruption and excessive distribution of dividends (in excess of its profits), and finallyAnglo-Dutch wars. It was nationalised by theBatavian Republic in 1796 but nevertheless closed down at the end of 1799.
Overend, Gurney & CoUnited KingdomJune 1866BankingAfterSamuel Gurney's retirement, the bank invested heavily in railway stocks. It went public in 1865, but was badly affected by a general fall in stock prices. TheBank of England refused to advance money, and it collapsed. The directors were sued, but exonerated from fraud.
Friedrich KruppGermany1873Steel,metalsKrupp's business over-expanded, and had to take a 30m Mark loan from the Preußische Bank, theBank of Prussia.
DanatbankGermany13 July 1931BankingAt the start of theGreat Depression, after rumours about the solvency of the Norddeutsche Wollkämmerei & Kammgarnspinnerei, there was abank run, and Danatbank was forced into insolvency.
Allied Crude Vegetable Oil Refining CorpUnited States16 Nov 1963CommoditiesCommodities traderTino De Angelis defrauded clients, including theBank of America into thinking he was tradingvegetable oil. He got loans and made money using the oil as collateral. He showed inspectors tankers of water, with a bit of oil on the surface. When the fraud was exposed, the business collapsed.
Herstatt BankWest Germany26 June 1974BankingSettlement risk. Counterparty banks did not receive their USD payments, where Herstatt had received DEM earlier, prior to government-forced liquidation.
Carrian GroupHong Kong1983Real estateAccounting fraud. An auditor was murdered, an adviser committed suicide. The largest collapse inHong Kong history.
TexacoUnited States13 April 1987OilAfter a legal battle withPennzoil, whereby it was found to owe a debt of $10.5 bn, Texaco went into bankruptcy. It was later resurrected and taken over byChevron.
QintexAustralia1989Real estateQintex CEOChristopher Skase was found to have improperly used his position to obtain management fees prior to the $1.5 billion collapse of Qintex including $700m unpaid debts. Skase absconded to the Spanish resort island of Majorca. Spain refused extradition for 10 years during which time Skase became a citizen ofDominica.
Lincoln Savings and Loan AssociationUnited States1989BankingFinancial institution that went bust following theKeating Five scandal.
Polly PeckUnited Kingdom30 Oct 1990Electronics,food,textilesAfter a raid by the UKSerious Fraud Office in September 1990, the share price collapsed. TheCEOAsil Nadir was convicted of stealing the company's money.
Bank of Credit & Commerce InternationalUnited Kingdom5 July 1991BankingBreach of US law, by owning another bank. Fraud, money laundering and larceny. Better known as BCCI.
NordbankenSweden1991BankingFollowing market deregulation, there was a housing price bubble, and it burst. As part of a general rescue as the1990–1994 Swedish financial crisis unfolded, Nordbanken was nationalised for 64 billion kronor. It was later merged withGötabanken, which itself had to write off 37.3% of its creditors, and is now known asNordea.
Barings BankUnited Kingdom26 Feb 1995BankingAn employee inSingapore,Nick Leeson, tradedfutures, signed off on his own accounts and became increasingly indebted. The London directors were subsequently disqualified, as being unfit to run a company inRe Barings plc (No 5).
Bre-XCanada1997MiningAfter widespread reports that Bre-X had found a gold mine inIndonesia, the stories were found to be fraudulent.
LiventCanadaNovember 1998EntertainmentIn November 1998, Livent sought bankruptcy protection in the US and Canada, claiming a debt of $334 million.Garth Drabinsky, co-founder ofLivent, was convicted and sentenced to prison forfraud andforgery. A judgment has been obtained againstDeloitte & Touche in respect of Deloitte's negligence in conducting the audit for Livent's 1997 fiscal year.
Long-Term Capital ManagementUnited States23 Sep 1998Hedge fundAfter purporting to have discovered a scientific method of calculating derivative prices, LTCM lost $4.6bn in the first few months of 1998, and was rescued by a private sector consortium.[1]$3.6 billion
FlowTexGermanyFebruary 2000MachineryFlowTex operated aPonzi scheme in which non-existing construction equipment was sold to investors in order to immediately beleased back by FlowTex. This required an exponentially growing number of investors to afford the lease payments. The fraud was the largest corporate scandal in German history and caused financial damages of about 4.9bn DM (≈€3.3bn).
Equitable Life Assurance SocietyUnited Kingdom8 Dec 2000InsuranceThe insurance company's directors unlawfully used money from people holding guaranteed annuity rate policies to subsidise people with current annuity rate policies. After a House of Lords judgment inEquitable Life Assurance Society v Hyman, the Society closed. Though never technically insolvent, the UK government set up a compensation scheme for policyholders under theEquitable Life (Payments) Act 2010.
CINARCanadaMarch 2001AnimationMicheline Charest and Ronald Weinberg, the co-founders of this animation studio, were accused of transferring over $120 million to the Bahamas without the approval of its board of directors.[2] The company was later sold in 2004 to a consortium that includes Nelvana founder Michael Hirsch and was subsequently renamed Cookie Jar Group.[3] Cookie Jar in turn was acquired in 2012 by what is now calledWildBrain. In 2016, Weinberg was sentenced to 8 years and 11 months in prison, and is currently on parole.[4]
HIH InsuranceAustralia15 March 2001InsuranceIn early 2000, after an increase in the size of the business, it was determined that the insurance company's solvency was marginal, and a small asset price change could see the insurance company become insolvent. It did. DirectorRodney Adler, CEORay Williams and others were sentenced to prison for fraudulent activity.
Pacific Gas & Electric CompanyUnited States6 April 2001EnergyAfter a change in regulation inCalifornia, PG&E determined it was unable to continue delivering power, and despite theCalifornia Public Utilities Commission's efforts, it went into bankruptcy, leaving homes without energy. It emerged again in 2004.
One.TelAustralia29 May 2001TelecommsAfter becoming one of the largest Australian public companies, losses of $290m were reported, the share price crashed, and it entered administration. InASIC v Rich[5] the directors were found not to have been guilty ofnegligence.
SwissairSwitzerland2 Oct 2001AviationOverexpansion in the late 1990s and the aftermath of theSeptember 11 attacks led to a dramatic fall in share prices. In 2007, several of the company's board members were charged over the airline's bankruptcy.[6] Assets were taken over by subsidiaryCrossair which becameSwiss International Air Lines, eventually purchased byLufthansa of Germany.
EnronUnited States28 Nov 2001Energy
See also:Enron scandal
Directors and executives fraudulently concealed large losses in Enron's projects. A number were sentenced to prison.[7][8]		$63.4 billion
Chiquita Brands IntUnited States28 Nov 2001FoodAccumulated debts, after a series of accusations relating to breaches of labour and environmental standards. It entered apre-packaged insolvency, and emerged with similar management in 2002.[9]
KmartUnited States22 Jan 2002RetailAfter difficult competition, the store was put intoChapter 11 bankruptcy proceedings, but soon re-emerged.
Adelphia CommunicationsUnited States13 Feb 2002Cable televisionInternal corruption. The Directors were sentenced to prison.[8][10]
Arthur AndersenUnited States15 June 2002AccountingA US court convicted Andersen ofobstruction of justice by shredding documents relating to theEnron scandal.
WorldComUnited States21 July 2002TelecommsAfter falling share prices, and a failedshare buy back scheme, it was found that the directors had used fraudulent accounting methods to push up the stock price. Rebranded MCI, it emerged from bankruptcy in 2004 and the assets were bought byVerizon.
ParmalatItaly24 Dec 2003FoodThe company's finance directors concealed large debts.
MG Rover GroupUnited Kingdom15 April 2005AutomobilesAfter diminishing demand, and getting a £6.5m loan from the UK government in April 2005, the company went intoadministration. After the loss of 30,000 jobs,Nanjing Automobile Group bought the company's assets.
Bayou Hedge Fund GroupUnited States29 Sep 2005Hedge fundSamuel Israel III defrauded his investors into thinking there were higher returns, and orchestrated fake audits. TheCommodity Futures Trading Commission filed a court complaint and the business was shut down after the directors were caught attempting to send $100m into overseas bank accounts.
RefcoUnited States17 Oct 2005BrokerAfter becoming apublic company in August 2005, it was revealed thatPhillip R. Bennett, the company's CEO and chairman, had concealed $430m of bad debts. Its underwriters wereCredit Suisse First Boston,Goldman Sachs, andBank of America Corp. The company enteredChapter 11 and Bennett was sentenced to 16 years in prison.
Bear StearnsUnited States14 Mar 2008BankingBear Stearns invested in the subprime mortgage market in 2003 after the US government had begun to deregulate consumer protection and derivative trading. The business collapsed as more people began to be unable to meet mortgage obligations. After a stock price high of $172 a share, it was bought byJP Morgan for $2 a share on 16 March 2008, with a $29bn loan facility guaranteed by theUS Federal Reserve.
Northern RockUnited Kingdom22 Feb 2008BankingNorthern Rock had invested in the international markets forsub-prime mortgage debt, and as more and more people defaulted on their home loans in the US, the Rock's business collapsed. It triggered the firstbank run in the UK since Overend, Gurney & Co in 1866, when it asked the UK government for assistance. It wasnationalised, and then sold toVirgin Money in 2012.
IndyMacUnited States11 July 2008BankingIndyMac invested heavily inAlt-A mortgages andreverse mortgages. After many of these loans failed and couldn't be sold during theU.S. subprime mortgage crisis the company had to file forChapter 7 bankruptcy.
Lehman BrothersUnited States15 Sep 2008Banking

Lehman Brothers' financial strategy in 2003 was to invest heavily inmortgage debt, in markets which were being deregulated fromconsumer protection by theUS government. Losses mounted, and Lehman Brothers was forced to file for Chapter 11 bankruptcy after theUS government refused to extend a loan. The collapse triggered a global financial market meltdown.Barclays,Nomura andBain Capital purchased the assets which were not indebted.

AIG[8]United States16 Sep 2008InsuranceOut of $441 billion worth of securities originally rated AAA, as the USsub-prime mortgage crisis unfolded, AIG found it held $57.8 billion of these products. It was forced to take a 24-month credit facility from the USFederal Reserve Board.
Washington MutualUnited States26 Sep 2008BankingFollowing thesub-prime mortgage crisis, there was abank run on WaMu, and pressure from the FDIC forced closure.
Royal Bank of Scotland Group (RBS)United Kingdom13 Oct 2008BankingFollowing the takeover ofABN-Amro, and the collapse ofLehman Brothers, RBS found itself insolvent as the international credit market seized up. 58% of the shares were bought by the UK government.
ABN-AmroNetherlandsOct 2008BankingAfter a takeover battle betweenBanco Santander,Fortis andRBS, ABN-Amro was split up and divided between the banking consortium. Fortis and RBS were found to be heavily indebted due to thesub-prime mortgage crisis. Fortis was split and the Dutch part of Fortis was taken under government ownership by The Netherlands, thus reinstating the company in ABN-Amro The Belgian part was taken over byBNP-Paribas. RBS was taken under government ownership by the UK.
Bernard L. Madoff Investment SecuritiesUnited StatesDec 2008SecuritiesTricked investors out of $64.8 billion through the largest Ponzi scheme in history.

Investors were paid returns out of their own money or that of other investors rather than from profits.

Bernie Madoff told his sons about his scheme and they reported him to the SEC. He was arrested the next day.

$64.8 billion
BankwestAustralia2008BankingFollowing the purchase of Bankwest by theCommonwealth Bank (CBA), there have been calls for a royal commission specifically into the conduct of the bank following allegations made that the CBA engineered defaults of Bankwest customers in order to profit fromclawback clauses under the purchase agreement.
NortelCanada14 Jan 2009TelecommsFollowing the2008 financial crisis, and allegations over excessiveexecutive pay, demand for products dropped.
Anglo Irish BankIreland15 Jan 2009BankingAfter the2008 financial crisis, the bank was forced to be nationalised by the Irish government.
ArcandorGermany9 June 2009RetailAfter struggling to maintain business levels at its brand namesKarstadt andKaDeWe, Arcandor sought help from the German government, and then filed for insolvency.
Hypo Real EstateGermany5 October 2009BankingDepfa, one of the companies subsidiaries ran into liquidity problems in 2008 as a result of the2008 financial crisis. This combined with heavy losses reported by Hypo Real Estate itself led to a bailout by theDeutsche Bundesbank and later to a complete nationalization of the company.
SchleckerGermany23 Jan 2012RetailAfter continual losses mounting from 2011 Schlecker, with 52,000 employees, was forced into insolvency, though continued to run.
DynegyUnited States6 July 2012EnergyAfter a series of attempted takeover bids, and a finding of fraud in a subsidiary's purchase of another subsidiary, it filed forChapter 11 bankruptcy. It emerged from bankruptcy on 2 October 2012.
China Medical Technologies (CMED)Cayman Islands27 July 2012Medical technologyIn 2009, an anonymous letter alleging possible illegal and fraudulent activities by management since 2007 was sent toKPMG Hong Kong, then CMED's auditor, and investigated by law firmPaul Weiss Rifkind Wharton & Garrison. Since 27 July 2012, pursuant to an Order by theGrand Court of the Cayman Islands, CMED has been under the control of Joint Official Liquidators. Post-bankruptcy filing, CMED's liquidator found itself probing an alleged $355 million insider fraud. In March 2017, theU.S. Department of Justice criminally indicted the CMED founder and CEO, as well as the former Chief Financial Officer, charging them withsecurities fraud andwire fraud conspiracy for stealing more than $400 million from investors as part of a seven-year scheme.
National Bank of Anguilla and Caribbean Commercial BankAnguilla12 August 2013BankingIn 2013, the two indigenous banks of Anguilla were intervened in by the East Caribbean Central Bank due to alleged irregular loan practices. After 3 years, both banks were put into bankruptcy, a new nationalized bank was created and the assets of the two bankrupt banks and the bank accounts of local account holders were transferred to the new bank and the local depositors were made whole by stealing about $180 million of money belonging foreign depositors, who lost their entire savings. The central bank was accused of fleecing foreign depositors.[11][12]
Banco Espírito Santo (BES)Portugal3 August 2014BankingAn audit performed in 2013, for a capital raise performed in May 2014, uncovered severe financial irregularities and a precarious financial situation of the bank. In July 2014, Salgado was replaced by economistVítor Bento, who saw BES in an irrecoverable situation. Its good assets were bought byNovo Banco, a vehicle founded by Portugal's financial regulators for that purpose, on August 3, which hired Bento as CEO, while its toxic assets stayed in the "old" BES, which got its banking license revoked by Portugal's regulators.
Dick SmithAustralia5 January 2016RetailOn 5 January 2016, the retailer collapsed and was placed intoreceivership. McGrathNicol were appointed asadministrators by the company's board andFerrier Hodgson appointed by the company's major creditorsNational Australia Bank (NAB) andHSBC Bank Australia.
TheranosUnited StatesSeptember 2018Health careTheranos claimed to have developed devices to automate and miniaturize blood tests using microscopic blood volumes. Theranos dubbed its blood collection vessel the "nanotainer" and its analysis machine the "Edison".Elizabeth Holmes, founder and CEO, reportedly named the device "Edison" after inventor Thomas Edison, stating, "We tried everything else and it failed, so let's call it the Edison."[13] This was likely because of a well-known Edison quote: "I've not failed. I've just found 10,000 ways that won't work."
WirecardGermanyJune 2020Banking,Money transfer€1.9 billion, which apparently never existed, was found missing in a special audit. The CEO was arrested, the board filed for insolvency, and a warrant for the missing COO was issued.
FTXBahamasNovember 2022Cryptocurrency,Cryptocurrency exchangeCEO Sam Bankman-Fried resigns andFTX (company) files forChapter 11 bankruptcy.John J. Ray III, the same attorney who oversaw the liquidation ofEnron, is appointed CEO.[14]
Silicon Valley Bank (SVB)United StatesMarch 2023BankingSilicon Valley Bank lost money onbonds, prompting arun on the bank. TheFDIC placed the bank intoreceivership, and its US assets were acquired byFirst Citizens BancShares and its UK assets were acquired byHSBC.[15][16][17]
Signature BankUnited StatesMarch 2023BankingDue to losses and abank run, prompted by the precedingcollapse of Silicon Valley Bank, theFDIC placed the bank into receivership.[18]
First Republic BankUnited StatesMay 2023BankingDue to aglobal banking panic, mainly from the preceding collapses ofSilicon Valley Bank andSignature Bank, a bank run forced the bank to be placed into receivership by theFDIC and then sold toJPMorgan Chase[19]
Signa HoldingAustriaNovember 2023Real Estate,RetailThe company collapsed in 2023 with €23 billion ($25 billion) of insolvencies.[20][21]
VShojoUnited States24 July 2025EntertainmentVShojo announced that it would be ceasing operations in July 2025 following allegations that it mishandled money intended for charity, leading to all of its talents cutting ties with the company.[22]


List of scandals without insolvency

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See also

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References

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  1. ^Lowenstein, Roger (2000).When Genius Failed. Random House.
  2. ^"Police allege $120M fraud involving Cinar founder".CTVNews. 2011-03-02. Archived fromthe original on May 24, 2021. Retrieved2021-05-24.
  3. ^"Former Nelvana Execs Hirsh & Taylor Buy CINAR".Animation World Network. Retrieved2021-05-24.
  4. ^"Cinar founder Ronald Weinberg gets full parole on 9-year sentence".montrealgazette. Retrieved2021-05-24.
  5. ^[2009] NSWSC 1229
  6. ^Fountain, Lynn (2016).Ethics and the Internal Auditor's Political Dilemma: Tools and Techniques to Evaluate a Company's Ethical Culture. CRC Press. p. 9.ISBN 978-1498767828. Retrieved23 August 2019.
  7. ^abJerry W. Markham (2006),A financial history of modern U.S. corporate scandals: from Enron to reform, M.E. Sharpe,ISBN 978-0765615831
  8. ^abcdefghijCohen, Jeffrey R.; Ding, Yuan; Lesage, Cédric; Stolowy, Hervé (August 1, 2008). "Managers' Behavior in Corporate Fraud".SSRN 1160076.
  9. ^'Chiquita files bankruptcy under pre-arranged plan' (11 November 2001)USA Today
  10. ^abcdefghijklmnPenelope Patsuris (26 August 2002),"The Corporate Scandal Sheet",Forbes
  11. ^"ECCB takes over two Anguilla banks",Trinidad & Tobago Guardian, 14 August 2013
  12. ^"Caribbean regulator accused of 'fleecing' foreign depositors",Offshore Alert, 28 December 2016
  13. ^Carreyrou, John (21 May 2018).Bad blood: secrets and lies in a Silicon Valley startup (First ed.). New York.ISBN 978-1-5247-3165-6.OCLC 1029779381.{{cite book}}: CS1 maint: location missing publisher (link)
  14. ^Gura, David (2022-11-23)."FTX's new CEO reveals just how big a mess he's dealing with".NPR. Retrieved2023-09-01.
  15. ^"Deal to buy Silicon Valley Bank calms bank fears, for now".AP NEWS. 2023-03-27. Retrieved2023-05-10.
  16. ^Egan, Allison Morrow,Matt (2023-03-10)."Silicon Valley Bank collapses after failing to raise capital | CNN Business".CNN. Retrieved2023-05-10.{{cite web}}: CS1 maint: multiple names: authors list (link)
  17. ^"Silicon Valley Bank: HSBC £1 deal to buy collapsed bank to boost profit".BBC News. 2023-05-02. Retrieved2023-05-10.
  18. ^"FDIC Releases Report Detailing Supervision of the Former Signature Bank, New York, New York".www.fdic.gov. Retrieved2023-05-10.
  19. ^"First Republic Bank seized, sold in fire sale to JPMorgan".AP NEWS. 2023-05-01. Retrieved2023-05-10.
  20. ^"Signa in Last-Ditch Funding Talks as Insolvency Wave Looms". bloomberg.com. bloomberg.com. November 25, 2023. Retrieved5 December 2023.
  21. ^"Signa unit confirms bankruptcy filing in letter to employees - Wirtschaftswoche". reuters.com. reuters.com. November 25, 2023. Retrieved5 December 2023.
  22. ^Parrish, Ash (July 24, 2025)."VTuber agency VShojo shuts down after talent exodus".The Verge. RetrievedJuly 25, 2025.
  23. ^ab"The questions the Financial Ombudsman needs to answer".ABC News. April 2016. Retrieved2016-04-02.
  24. ^"ANZ Displayed Racial Bigotry to Oswals Court Hears".
  25. ^"Emails Expose Bankers Racist Insults About Oswals".News.com.au.
  26. ^"ANZ Accused Racial Bigotry Against Indian Billionaire Couple".SBS Your Language.
  27. ^"ANZ facing $30m lawsuit over 'toxic' culture of sleaze".NewsComAu. 14 January 2016. Retrieved2016-01-17.
  28. ^"Corporate watchdog investigation on bank rate rigging nears end".ABC News. 11 February 2016. Retrieved2016-02-26.
  29. ^Walley, Jeff."ASIC Expected To Launch Legal Action Against ANZ Over Alleged Interest Rate Manipulation".Herald Sun. Retrieved26 February 2016.
  30. ^ASIC, Originating Process available at,http://download.asic.gov.au/media/3563864/originating-process-asicvanz.pdf
  31. ^"Calls for Royal commission into 'disgraceful' CommInsure".ABC News. 7 March 2016. Retrieved2016-03-07.
  32. ^"CBA compensation to victims of financial scandal 'a joke'".ABC News. 28 October 2015. Retrieved2016-01-17.
  33. ^Appleby, Julie (December 18, 2002)."HCA to settle more allegations for $631M".USA Today.
  34. ^"KBC investit dans des centres de détention pour migrants aux États-Unis".RTBF. April 28, 2020. p. 1. RetrievedMay 22, 2020.
  35. ^"Luxembourg tax files: how tiny state rubber-stamped tax avoidance on an industrial scale".The Guardian. 5 November 2014. Retrieved12 November 2014.
  36. ^"The Panama Papers".
  37. ^Ferguson, Adele."Horror at 7-Eleven: no compensation and no good will for franchisees".
  38. ^Cumming, Chris (October 11, 2013)."SunTrust to Pay $1.5B to Settle Mortgage Claims".American Banker. Vol. 178, no. F340. p. 13. RetrievedAugust 7, 2017 – viaEBSCO.
  39. ^"Judge deems Musk's 'funding secured' tweet false and misleading. A trial awaits".Los Angeles Times. 2020-04-15. Retrieved2020-12-14.

Further reading

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