Michael Milken

History's Financial Scandals

Nicknamed the "Junk Bond King," Michael Milken entered a guilty plea for securities-fraud charges in 1989 and served nearly two years in prison. He has since rehabilitated his image considerably and amassed a sizable fortune. (AP Photo/John Marshall Mantel)

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Bernard L. Madof... Bernard Madoff, a 71-year-old former Nasdaq stock-market chairman, pleaded guilty in March 2009 to using New York-based Bernard L. Madoff Investment Securities LLC to run a $65 billion Ponzi scheme. The victims identified have included ordinary people and Hollywood celebrities, along with large hedge funds, international banks and charities in the U.S., Europe and Asia. Madoff was sentenced to 150 years in prison on June 29, 2009 for perpetrating Wall Street's biggest and most brazen investment fraud. (AP Photo/Frank Franklin II)
Stanford Financi... Despite claiming to have made double-digit returns between 1993 and 2005, the Stanford Financial Group of Companies’ annual returns hadn't reached 10 percent since 1994, according to recent court papers. Texas billionaire R. Allen Stanford pleaded not guilty in June 2009 to charges he cheated investors out of $7 billion as part of a massive investment scam. He is currently in a Texas jail; a U.S. judge yesterday stayed her decision to grant a $500,000 bond because the U.S. government plans to appeal. (AP Photo/Andres Leighton)
Crazy Eddie The Northeastern U.S. consumer electronics chain Crazy Eddie operated 43 stores in four states. But in 1987, the New Jersey district attorney’s office initiated a federal grand-jury investigation into the financial activities and found that certain Crazy Eddie officers and employees, including co-founder Eddie Antar, were violating federal securities laws. (AP Photo/Mike Derer)
Bear Stearns Com... Bear Stearns used to be one of the largest global investment banks, securities-trading and brokerage firms in the world. However, nearly bankrupt, the company sold itself to JPMorgan Chase for $2 a share, or $240 million, bolstered by the Federal Reserve’s guarantee of $30 billion worth of Bear Stearns loans. (AP Photo/Mark Lennihan)
Martha Stewart/I... Domestic diva Martha Stewart spent five months in prison (and an additional five months under home confinement) after her 2004 conviction on charges connected to her well-timed sale of ImClone stock. (AP Photo/Louis Lanzano)
Ivar Kreuger Known as the grandfather of all Ponzi and Madoff schemes, Ivar Kreuger (1880-1932) made his fortune in the 1920s by raising money from American investors to lend to European governments in exchange for match monopolies. However, Kreuger was creating more than matches; he created "the forerunners of today's derivatives" and techniques that are still used by hedge funds and investment banks. Shortly after his suicide in 1932, his schemes unraveled. The "Kreuger crash" bankrupted millions and led to the securities laws of 1933 and 1934, according to a recent Publishers Weekly review of the book, "The Match King" by Frank Partnoy.
Healthsouth Though the SEC accused healthcare-services provider HealthSouth and its then-CEO Richard Scrushy in 2003 of falsifying earnings reports, Scrushy was acquitted of those charges. He was, however, convicted on bribery and mail-fraud charges—crimes for which he is currently serving a sentence of more than six years. (AP Photo/Dave Martin)
Adelphia Once one of the largest cable companies in the country, Adelphia Communications filed for bankruptcy protection in 2002. Several executives, including founder John Rigas, went on trial for securities violations; Rigas was convicted and sentenced to 15 years in prison. (AP Photo/Louis Lanzano)
Worldcom Former WorldCom CEO Bernard Ebbers, now 65, is two years into a 25-year prison sentence connected to the accounting fraud that took place on his watch from 1999-2002. WorldCom filed for bankruptcy protection in 2002 and has since changed its name to MCI. (AP Photo/Kenneth Lambert)
Oil Brokers Scan... Interior Department staffers are accused of various improprieties, including sexual relationships with oil company employees and accepting ski trips, snowboarding lessons, concert tickets, and other gifts. (AP Photo/Ana Maria Otero)
Michael Milken Nicknamed the "Junk Bond King," Michael Milken entered a guilty plea for securities-fraud charges in 1989 and served nearly two years in prison. He has since rehabilitated his image considerably and amassed a sizable fortune. (AP Photo/John Marshall Mantel)
Charles Ponzi The father of the Ponzi scheme, which is similar to its better-known cousin the "pyramid scheme," Charles Ponzi served three and a half years in prison following the 1920 collapse of his get-rich-quick scheme that bilked investors out of millions.
Tyco Former Tyco International CEO Dennis Kozlowski was convicted in 2005 of misappropriating hundreds of millions in company funds. His well-known party lifestyle included an extravagant $2 million toga birthday bash for his wife, for which the company paid half under its billing as a "shareholder meeting." (AP Photo/ Louis Lanzano)
Arthur Andersen Arthur Anderson was one of the world's top five accounting firms prior to the Enron scandal. Pending the results of prosecution by the Department of Justice, the Chicago-based company voluntarily surrendered its licenses to practice as CPAs in the U.S, resulting in the loss of 85,000 jobs and a corporate rebranding. (AP Photo/Dan Loh)
Ivan Boesky Thought to be the inspiration for the Gordon Gecko character in the 1987 film Wall Street, Ivan Boesky cooperated with prosecutors and pleaded guilty to insider-trading charges in 1987. He was sentenced to three years in prison and fined $100 million. (AP Photo/David Cantor)
Enron In one of the most spectacular corporate scandals of all-time, Houston-based energy company Enron's accounting fraud led to its bankruptcy in 2001, costing tens of thousands of employees their jobs. (AP Photo/Michael Stravato)