The 10 Worst Corporate Accounting Scandals of All Time Tweet Share this infographic on your site! <a href=""><img src="" alt="The 10 Worst Corporate Accounting Scandals of All Time" width="500" border="0" /></a><br />Source: <a href="">Accounting-Degree.org</a> Embed this infographic on your site! <a href=""><img src="" alt="" width="500" border="0" /></a><br />Source: <a href="">Accounting-Degree.org</a> The 10 Worst Corporate Accounting Scandals of All Time If there is one theme to rival terrorism for defining the last decade-and-a-half, it would have to be corporate greed and malfeasance. Many of the biggest corporate accounting scandals in history happened during that time. Here's a chronological look back at some of the worst examples. Waste Management Scandal (1998) Company: Houston-based publicly traded waste management company What happened: Reported $1.7 billion in fake earnings. Main players: Founder/CEO/Chairman Dean L.

Buntrock and other top executives; Arthur Andersen Company (auditors) How they did it: The company allegedly falsely increased the depreciation time length for their property, plant and equipment on the balance sheets. How they got caught: A new CEO and management team went through the books. Penalties: Settled a shareholder class-action suit for $457 million. SEC fined ArthurAndersen $7 million. Fun fact: After the scandal, new CEO A. Maurice Meyers set up an anonymous company hotline where employees could report dishonest or improper behavior. Enron Scandal (2001) Company: Houston-based commodities, energy and service corporation What happened: Shareholders lost $74 billion, thousands of employees and investors lost their retirement accounts, and many employees lost their jobs. Main players: CEO Jeff Skilling and former CEO Ken Lay. How they did it: Kept huge debts off balance sheets. How they got caught: Turned in by internal whistleblower Sherron Watkins; high stock prices fueled external suspicions. Penalties: Lay died before serving time; Skilling got 24 years in prison. The company filed for bankruptcy. Arthur Andersen was found guilty of fudging Enron's accounts.

Fun fact: Fortune Magazine named Enron "America's Most Innovative Company" 6 years in a row prior to the scandal. WorldCom Scandal (2002) Company: Telecommunications company; now MCI, Inc. What happened: Inflated assets by as much as $11 billion, leading to 30,000 lost jobs and $180 billion in losses for investors. Main player: CEO Bernie Ebbers How he did it: Underreported line costs by capitalizing rather than expensing and inflated revenues with fake accounting entries. How he got caught: WorldCom's internal auditing department uncovered $3.8 billion of fraud. Penalties: CFO was fired, controller resigned, and the company filed for bankruptcy. Ebbers sentenced to 25 years for fraud, conspiracy and filing false documents with regulators. Fun fact: Within weeks of the scandal, Congress passed the Sarbanes-Oxley Act, introducing the most sweeping set of new business regulations since the 1930s. Tyco Scandal (2002) Company: New Jersey-based blue-chip Swiss security systems. What happened: CEO and CFO stole $150 million and inflated company income by $500 million.

Main players: CEO Dennis Kozlowski and former CFO Mark Swartz. How they did it: Siphoned money through unapproved loans and fraudulent stock sales. Money was smuggled out of company disguised as executive bonuses or benefits. How they got caught: SEC and Manhattan D.A. investigations uncovered questionable accounting practices, including large loans made to Kozlowski that were then forgiven. Penalties: Kozlowski and Swartz were sentenced to 8-25 years in prison. A class-action lawsuit forced Tyco to pay $2.92 billion to investors. Fun fact: At the height of the scandal Kozlowski threw a $2 million birthday party for his wife on a Mediterranean island, complete with a Jimmy Buffet performance. HealthSouth Scandal (2003) Company: Largest publicly traded health care company in the U.S. What happened: Earnings numbers were allegedly inflated $1.4 billion to meet stockholder expectations. Main player: CEO Richard Scrushy. How he did it: Allegedly told underlings to make up numbers and transactions from 1996-2003.

How he got caught: Sold $75 million in stock a day before the company posted a huge loss, triggering SEC suspicions. Penalties: Scrushy was acquitted of all 36 counts of accounting fraud, but convicted of bribing the governor of Alabama, leading to a 7-year prison sentence. Fun fact: Scrushy now works as a motivational speaker and maintains his innocence. Freddie Mac (2003) Company: Federally backed mortgage-financing giant. What happened: $5 billion in earnings were misstated. Main players: President/COO David Glenn, Chairman/CEO Leland Brendsel, ex-CFO Vaughn Clarke, former senior VPs Robert Dean and Nazir Dossani. How they did it: Intentionally misstated and understated earnings on the books. How they got caught: An SEC investigation. Penalties: $125 million in fines and the firing of Glenn, Clarke and Brendsel. Fun fact: 1 year later, the other federally backed mortgage financing company, Fannie Mae, was caught in an equally stunning accounting scandal. American International Group (AIG) Scandal (2005) Company: Multinational insurance corporation.

What happened: Massive accounting fraud to the tune of $3.9 billion was alleged, along with bid-rigging and stock price manipulation. Main player: CEO Hank Greenberg. How he did it: Allegedly booked loans as revenue, steered clients to insurers with whom AIG had payoff agreements, and told traders to inflate AIG stock price. How he got caught: SEC regulator investigations, possibly tipped off by a whistleblower. Penalties: Settled with the SEC for $10 million in 2003 and $1.64 billion in 2006, with a Louisiana pension fund for $115 million, and with 3 Ohio pension funds for $725 million. Greenberg was fired, but has faced no criminal charges. Fun fact: After posting the largest quarterly corporate loss in history in 2008 ($61.7 billion) and getting bailed out with taxpayer dollars, AIG execs rewarded themselves with over $165 million in bonuses. Lehman Brothers Scandal (2008) Company: Global financial services firm. What happened: Hid over $50 billion in loans disguised as sales.

Main players: Lehman executives and the company's auditors, Ernst & Young. How they did it: Allegedly sold toxic assets to Cayman Island banks with the understanding that they would be bought back eventually. Created the impression Lehman had $50 billion more cash and $50 billion less in toxic assets than it really did. How they got caught: Went bankrupt. Penalties: Forced into the largest bankruptcy in U.S. history. SEC didn't prosecute due to lack of evidence. Fun fact: In 2007 Lehman Brothers was ranked the #1 "Most Admired Securities Firm" by Fortune Magazine. Bernie Madoff Scandal (2008) Company: Bernard L. Madoff Investment Securities LLC was a Wall Street investment firm founded by Madoff. What happened: Tricked investors out of $64.8 billion through the largest Ponzi scheme in history. Main players: Bernie Madoff, his accountant, David Friehling, and Frank DiPascalli. How they did it: Investors were paid returns out of their own money or that of other investors rather than from profits. How they got caught: Madoff told his sons about his scheme and they reported him to the SEC.

He was arrested the next day. Penalties: 150 years in prison for Madoff + $170 billion restitution. Prison time for Friehling and DiPascalli. Fun fact: Madoff's fraud was revealed just months after the 2008 U.S. financial collapse. Satyam Scandal (2009) Company: Indian IT services and back-office accounting firm. What happened: Falsely boosted revenue by $1.5 billion. Main player: Founder/Chairman Ramalinga Raju. How he did it: Falsified revenues, margins and cash balances to the tune of 50 billion rupees. How he got caught: Admitted the fraud in a letter to the company's board of directors. Penalties: Raju and his brother charged with breach of trust, conspiracy, cheating and falsification of records. Released after the Central Bureau of Investigation failed to file charges on time. Fun fact: In 2011 Ramalinga Raju's wife published a book of his existentialist, free-verse poetry. Some Major U.S. Companies That Went Bankrupt - DirJournal Blogs Some Major U.S.

Companies That Went Bankrupt written by Hasan October 25, 2008 image bigstockphoto.com Even in the business world, what goes up sometimes comes down, and if the company is big, the sound of the fall is louder and clearer. Chapter 11 bankruptcies in the United States have been many. Chapter 11 allows a company to reorganize by allowing the debtor to keep a part or all of their property, as well as allows the company to pay off creditors with future earnings. Washington Mutual – September 26, 2008 The present financial crisis has hit the US harder than Hurricane Katrina, and WaMu bankruptcy only reiterates this. US reeled under the news of the biggest bank failure in its history, as federal regulators seized the largest American savings and loan institution, Washington Mutual (WaMu), which came to symbolize the excesses of the mortgage boom. Regulators brokered an emergency sale of the assets to JPMorgan Chase for $1.9 bn. As expected, global markets plunged. WaMu’s assets were $307 bn and it was also the sixth largest US bank, behind Bank of America.

With this acquisition, JPMorgan will now have about $900 bn in deposits. Lehman Brothers Holdings Inc. – September 15, 2008 A press release on September 15, 2008 by Lehman Brothers Holdings Inc. (LBHI), the 158-year-old U.S. investment bank, altered the American financial landscape. The company announced its intent to file for bankruptcy. This is the largest bankruptcy in the history of the United States with $638 billion in assets listed and the largest failure of an investment bank. The bank has been undermined by bad debts and shares tumbled 94% this year, before it was delisted on September 17, 2008. The deal for Barclays Plc to acquire the main business of Lehman has been approved. Barclays would also absorb $47.4 billion in securities and $45.5 billion in trading liabilities. Refco Inc. – October 17, 2005 Refco Inc. filing was then one of the major bankruptcies in the United States.

New York-based Refco was a diversified financial services organization that was primarily a commodities and futures broker, with operations in 14 countries. Founded in 1969, this firm was the largest broker on the Chicago Mercantile Exchange, with more than $4 billion in customer accounts. The firm’s collapse came about ten weeks after it sold shares for the first time to the public. The company was under investigation for hiding a $430 million debt and the Chief Executive Officer and Chairman; Phillip Bennett pleaded guilty of fraud and sentenced to 16 years. Delta Airlines Inc. – September 14, 2005 This United States airline is based in Atlanta, Georgia and operates extensive international and domestic flights. The company has been facing financial difficulties for a long time and ever since 2004, tried to stave off bankruptcy by restructuring the company with job cuts and expansion plans. However, in September 2005, it filed for bankruptcy for the first time in its 76-year history. The company cited high jet fuel prices and high labor costs as the two main factors. Delta was in $20.5 billion debt at the time of filing.

On April 30, 2007, the airlines emerged from bankruptcy protection as an independent carrier. Conseco Inc. – December 18, 2002 This is an epic case of a stock-slide leading to bankruptcy and then an amazing recovery. Conseco Inc., an insurance, investment and lending company in Carmel, files for bankruptcy. But it did so after reaching a pact with major creditors to restructure its debt. With the bankruptcy Judge approving a plan cutting the company’s debt from $7 billion to $1.4 billion, the company emerged from being the third-largest bankruptcy in U.S. history and paved the path to financial recovery. Conseco Inc. was once a high-flying company that rose to Fortune 500 status through several insurance acquisitions. Too many buyouts sent the company into a severe tailspin. UAL Corp. – December 9, 2002 UAL Corporation is an airline holding company based in Illinois. It was incorporated as a Delaware corporation. To keep up with the deregulated airline market place, the company tried diversifying its businesses in 1982, in order to improve its financial situation.

In spite of its efforts, like other airlines, it struggled with rising fuel prices and shaky finance, and filed for bankruptcy. However, it emerged from bankruptcy in 2006. WorldCom Inc. – July 21, 2002 WorldCom bankruptcy came about a month after the company revealed that it had wrongly accounted almost $4 billion in expenses. It was the largest US-based telecommunications company with more than 20 million customers and 80,000 employees. At that time, WorldCom was one of the world’s most valuable companies, valued over $100 billion, and the bankruptcy was considered the largest in United States history. WorldCom also came to be famous as one of the biggest instances of a corporate feeding its greed through accounting and financial manipulations. Global Crossing Ltd. – January 28, 2002 The result of this bankruptcy was said to be the loss of 9000 jobs. Global Crossing is an American telecommunications company based in Bermuda, providing computer networking services throughout the world. In its filing, the company listed its total assets of $22.4 billion and debts amounting to $12.4 billion.

It has since recovered from bankruptcy and succeeded in turning around its performance. Enron Corp. – February 12, 2001 Enron Corp. bankruptcy was the biggest corporate bankruptcy in U.S. history, and left investors burned and employees with lost retirement savings. It was an energy company in the United States, formed in 1985, in Houston, Texas. It grew to be the nation’s seventh-largest company in terms of revenue by buying electricity from generators and selling it to customers. Wall Street also called it the technological innovator. The reason for its downfall is said to be the complex partnerships to keep about $500 million in debt off of the books in order to mask its financial problems, to continue to get credit and cash for running its trading business. Once the loss of $638 million was disclosed, the Securities and Exchange Commission opened an investigation. Enron then filed for protection from creditors. Pacific Gas & Electric Co. – April 6, 2001 This company, with its headquarters in San Francisco, was founded in 1905 and supplies natural gas and electricity to most areas of Northern California. This company did well initially and had gas power, several hydroelectric and steam plants.

Under the electricity market deregulation, the company sold off its natural gas power plants and retained the hydroelectric plants. But with the selling of the gas power plants, the generating capacity went down and it had to buy power from other energy generators. The company had to buy at fluctuating prices and sell at fixed prices, which led to losses and eventually bankruptcy. In 2004, the company emerged from bankruptcy and established itself extremely well and was named one of the most profitable companies for 2005 on the Fortune 500 list. Bankruptcy cases are always filed in the United States Bankruptcy Court and are governed by federal law. State laws are also applied when it comes to property rights. There have been several other notable bankruptcies in American history, such as Texaco, Inc. and Financial Corp. of America. While some companies survived a bankruptcy and came out strong, others faded into oblivion. Some Major U.S. Companies That Went Bankrupt was last modified: June 15th, 2016 by Hasan Enron | Business | The Guardian The Guardian Corporate governance Enron The man who founded Enron, Kenneth Lay, has died just weeks before his jail sentence was to be announced.

Mark Tran and Stefanie Khaw look at one of America's biggest business scandals Close What is the latest development with Enron ? Kenneth Lay, the Enron founder, died of a "massive" heart attack on July 5 at his holiday home in Aspen, the exclusive Colorado ski resort. He was 64. In May, Lay was found guilty of six counts of fraud and conspiracy and was due to be sentenced in September. He expected to spend the rest of his life in prison. Lay is the second top Enron executive to die since the company collapsed. In 2002, Clifford Baxter was found dead after shooting himself in a Houston suburb. What took place at the trial? The trial in January of Lay and Jeffrey Skilling, Enron's former chief executive, was one of the most eagerly anticipated in the corporate world. Both men denied 42 charges relating to their role in the accounting scandal. The former Enron finance director, Andy Fastow, testified against his former bosses in exchange for a maximum jail sentence of 10 years. The jury found Skilling and Lay guilty. What happened to Enron?

The Texan energy company filed for bankruptcy in 2001 - at that time the biggest corporate collapse in US history. Named "America's most innovative company" by Fortune magazine for six years running, the firm unravelled after it was alleged that the concealment of huge debts had given investors a completely false image of the company. Enron went from being a company claiming assets worth almost £62bn to declaring bankruptcy within a period of three months. Share prices collapsed from about $95 to $1. Enron emerged from bankruptcy in 2004. Its current operations involve handling key assets and preparing the sale of its remaining businesses. What kind of company was it? Enron started life as a regional natural gas pipeline company, the result of a merger between Houston Natural Gas and InterNorth in 1985. Lay was credited with transforming Enron into the world's largest energy trading company and America's seventh-biggest corporation. How did the corporation become so successful? Enron was quick to exploit opportunities when deregulation in the late 1980s allowed users to buy gas or electricity from different producers. It specialised in contracts to deliver natural gas, electric power and other energy products to industries and utilities at future dates.

It also sold financial instruments designed to protect customers against sharp swings in energy prices. What was Wall Street's attitude towards Enron? Enron soon became a darling on Wall Street as analysts lauded the company for bringing hi-tech and complex finance to the dull business of supplying energy. Enron also cashed in on dotcom mania with Enrononline, a web-based trading service. When did the company start to unravel? The rot began in August 2001 with the abrupt resignation of Skilling, who cited "entirely personal reasons". At the time, Lay denied there were any problems but Skilling's hasty exit set off alarm bells and Enron's shares started to drift downwards. What precipitated its collapse? The situation deteriorated dramatically in October 2001, when Enron had to set aside $35m (£24m) to reflect losses in two complex partnerships that had been set up in 1999 to conceal its large debt. Enron was also forced to knock $1.2bn off shareholder equity at the time, a move that sent its share price into freefall. Why did the collapse make waves politically?

It emerged that Lay had conversations with Paul O'Neill, the treasury secretary, and Donald Evans, the commerce secretary, just weeks before the company filed for bankruptcy. Lay asked for help to stop a private credit rating agency downgrading Enron's debt. Officials deny any intervention but questions persist because of Enron's close connections with the Bush administration. How close was Enron to the Bush administration? Lay was an old friend of the president and Enron executives contributed more than $500,000 to George Bush's various campaigns. More specifically, the White House faced questions about six meetings between Enron executives and the vice-president, Dick Cheney, or his staff that took place in 2001 when the Bush administration was formulating US energy policy. Did the firm's collapse lead to any changes? In July 2002, the president signed into law harsh penalties for anyone found guilty of corporate wrongdoing. Congress subsequently passed the Sarbanes-Oxley legislation, which tightened compliance for US companies. But that was small consolation for those who lost money through Enron.

Investors lost their shirts and many of Enron's 19,000 employees lost their savings because they belonged to retirement plans based on Enron shares. Yet top executives were able to sell their Enron shares before they became worthless. How did Enron's finances escape scrutiny? Arthur Andersen, Enron's auditor, was convicted of obstructing justice by destroying a "significant" number of documents relating to the Enron case in June 2002. Once one of the "Big Five" accounting firms, the company voluntarily surrendered its licences to practise as a certified public accountant in the US in August 2002. Andersen closed down in the US and agreed to pay $60m (£32m) to settle legal claims over its role in Enron's collapse. In May 2005, the US supreme court overturned the conviction, saying jury instructions had been "flawed", but Andersen is unlikely to return to business. Did Enron operate outside the US? By 1999, Enron was involved in a quarter of all electricity and natural gas deals in the world and had major operations in Brazil and India.

Enron was particularly disliked in the developing world after the company became embroiled in one of India's biggest corruption scandals, in which large sums were paid to politicians involved in the privatisation of electricity firms. Did it have assets in the UK? Four thousand people worked for Enron or companies it owned in the UK. Enron owned Wessex Water, which employs 1,400 workers, and power stations on Teeside. Wessex Water was sold to the Malaysian utility YTL Power in May. The Enron jinx struck Wessex Water when its boss, Colin Skellett, was accused of accepting a £1m bribe during the sale. He was cleared of the charges five months after being arrested by the police. How was Lord Wakeham involved? Lord Wakeham was the first British political victim of the Enron debacle. The former Conservative cabinet member stepped down as the chairman of the Press Complaints Commission "as a matter of honour" while his links to Enron were examined by US investigators. How was he linked to Enron?

Lord Wakeham joined Enron as a non-executive director in 1994 after serving as energy minister under Lady Thatcher, when he approved Enron's purchase of a big gas power station in 1989. He also sat on Enron's audit and compliance committee, which was supposed to scrutinise the complex transactions between Enron and its controversial partnerships. The company paid him a reported £80,000 a year. Most memorable companies no longer with us - Business - US business | NBC News Remember E.F. Hutton? General Foods? TWA? They were once household names, but not anymore. Take a walk down memory lane as we reminisce about some companies that made a big name for themselves, but didn't stand the test of time. Here are our picks for the 15 most memorable companies that no longer exist. Compaq Courtesy PC World Compaq computer Once upon a time, there was a computer brand called Compaq. It was one of the largest sellers of PCs in the entire world in the 1980s and 1990s. Then 2002 comes and Hewlett-Packard Corp. merges with the company. The end.

Well, sounds like a short-lived story, and in actuality, it was. Compaq existed for only 20 years (1982-2002) before being gobbled up by then-CEO Carly Fiorina of HP to make HP's market share as large as possible. Advertise E.F. Hutton "When E.F. Hutton talks, people listen," claimed the well-known slogan from the respected broker's ubiquitous ads in the 1970s and 1980s. Well, it seems the stock market crash of 1987, bad press from money laundering and fraud scandals along with the firm's deep debt had people stopped listening. In 1987, Hutton agreed to be acquired by Shearson Lehman Brothers. Several mergers later what remains of the once proud firm is now part of Citigroup Inc. PaineWebber Doug Kanter / AFP/Getty Images PaineWebber was never the biggest brokerage on Wall Street, but it was part of the solid middle. It was founded in 1880 by William Alfred Paine and Wallace G. Webber.

It survived a securities fraud scandal in the late 1930s, and by 1980 it had 161 branch offices in 42 states and six offices in Asia and Europe. In 2000, it merged with UBS AG, to become UBS PaineWebber, but in 2003, "PaineWebber" was dropped and replaced with UBS Wealth Management USA. Merry-Go-Round Merry-Go-Round Ent. In the late 1980s and early 1990s, Merry-Go-Round was the darling of Wall Street and the suburbs where teens sold $70 rayon shirts for minimum wage plus commission. Its 536 stores comprised Merry-Go-Round, Dejaiz, Cignal and Chess King. Sadly, the mid-'90s teen did not want to wear v-neck sweater vests, mesh, or paisley rayon blouses. The business was so overtly trendy it tipped over the edge.

Merry-Go-Round filed for Chapter 11 bankruptcy protection in 1994, but couldn't stay afloat and liquidated all its assets in 1996. MCI WorldCom ROGELIO SOLIS / AP Starting as Long Distance Discount Services in 1983, it changed its name to WorldCom in 1995. A series of mega-mergers transformed the company. It was rechristened MCI WorldCom in 1998. Then the telecom industry started a prolonged downturn. Management resorted to accounting tricks to try to keep the stock afloat. By 2002, an elaborate accounting fraud was revealed. In bankruptcy, it changed its name back to MCI. In 2006 Verizon purchased MCI, and most of its operations became what is now called Verizon Business. Eastern Airlines Eastern began as a mail carrier for the U.S. Postal Service in the mid-1920s, but through acquisition and expansion came to dominate much of the domestic travel industry along the profitable East Coast corridor by the 1950s.

The airline thrived into the 1970s, when it was one of the "big four" major U.S. airlines. However, the carrier struggled after the Air Transportation Deregulation Act of 1978. Deteriorating labor relations forced it into bankruptcy in 1989, at the time the largest airline bankruptcy in U.S. history. It ceased operations in 1991. Enron James Nielsen / Getty Images Has there ever been a company that had such a spectacular rise and fall as this Houston-based energy company? Enron had 22,000 employees and claimed revenues of $111 billion in 2000 before its massive accounting fraud came to light. It is now the symbol of corporate fraud and corruption and its 2001 bankruptcy is the largest in U.S. history. Woolworth's Peter Macdiarmid / Getty Images Founded in 1879, Woolworth's became the model for five-and-dimes throughout the U.S. As the era of the enclosed shopping mall arose, Woolworth's responded by acquisition and expansion, buying such specialty shops as Kinney Shoes, Champs Sports and Foot Locker.

But rapid expansion proved to be the company's undoing. By 1997 all Woolworth's shops had closed. In 2001, the company changed its name to Foot Locker. Pan Am Michael Ochs Archives / Getty Images Pan Am was among the worldwide leaders in passenger travel in the 1960s and '70s. In this photo from August 1958, a Boeing 707 receives the final touches at the aircraft maker's plant in Renton, Wash. This plane made history when Pan Am inaugurated the first trans-Atlantic jet service between New York and Paris in October 1958. Pan American World Airways, or Pan Am, was an international airline that was in business from 1927 through 1991, when it ceased its operations after over a decade of mounting financial losses and declared bankruptcy. The company, despite being defunct for 17 years, is still well remembered in pop culture. The blue circular logo has made such an impression that it is put on designer travel bags to signify traveling in luxury today.

Standard Oil Carl Mydans / Time & Life Pictures/Getty Image Standard Oil (1870-1911) was the dominant oil company in the world until it was felled by the Sherman Anti-Trust Act of 1890. In 1911, the Supreme Court ruled that Standard Oil had violated the Act through its tactics of using low prices to wipe out competitors. The result was a breakup of the company into what is now Chevron, Exxon Mobil and ConocoPhillips. The Pullman Co. Getty images George Pullman founded the Pullman Palace Car Co. in Illinois in 1867. The company had a long and illustrious business cycle that spanned more than a century. Just when things were in high gear, the government intervened. In the interest of antitrust laws, Pullman Inc. was ordered to divest itself of either the Pullman Company (operating) or the Pullman-Standard Car Manufacturing Co. (manufacturing). After three years of negotiation, the Pullman Co. was sold to a railroad consortium for approximately $40 million. Arthur Andersen STEPHEN J. CARRERA / AP Former offices of the Arthur Andersen accounting firm in Chicago.

Arthur Andersen (1913-2002) spent decades as a leading accounting and consulting firm. Founded in 1913, it was once a member of the "Big 8" accounting firms, which later became the "Big 5." Andersen's downfall was its role as Enron's auditor. It used its credibility to bless Enron's special purpose entities and a whole host of illegal accounting. In 2002, the firm voluntarily surrendered its licenses to practice as CPAs after being found guilty of criminal charges, resulting in the loss of 85,000 jobs. General Foods Corp. General Foods Among General Foods' many product offerings were Sanka decaffeinated coffee and Tang. General Foods also continued to make acquisitions, including the makers of Kool-Aid, the Burger Chef restaurant chain and Oscar Mayer. But late in 1985, General Foods was itself acquired by Philip Morris (which later became Altria Group). When Philip Morris acquired Kraft in 1988, the two food companies were merged. In 2007, Altria spun off Kraft Foods.

Texas power company Energy Future files for bankruptcy | Reuters Tue Apr 29, 2014 | 7:53 PM EDT Texas power company Energy Future files for bankruptcy The TXU Monticello Steam Electric Station power plant near Mt. Pleasant, Texas in this February 26, 2007 file photo. Reuters/Mike Stone/files By Nick Brown and Billy Cheung Energy Future Holdings, the biggest power company in Texas, filed for bankruptcy protection on Tuesday, seven years after a massive leveraged buyout saddled it with debt just before the U.S. natural gas boom slashed prices for electricity. The former TXU Corp owes $49.7 billion, mainly to hedge funds and investment firms, and its more than $36.4 billion in assets make it nearly tied for the 10th largest Chapter 11 filing ever. ERCOT, the Texas grid operator, and the Texas Public Utility Commission sought to assure retail customers the bankruptcy would not hurt power availability. But the filing is sure to put new pressure on regulators to overhaul the market where wrangling about how to pay for new generation capacity has left the grid with scant extra power, threatening to hurt growth in the surging Texas economy.

Energy Future's bankruptcy was on par with those of Pacific Gas & Electric Co and Enron in 2001 but trailed behind the $691 billion in assets the investment bank Lehman Brothers had when it blew up in 2008, according to Bankruptcydata.com. Energy Future said it entered bankruptcy with some creditor agreements that would restructure about $40 billion in debt. The filing was a long-awaited end to a record buyout led by some of the most respected names in finance, including a unit of Goldman Sachs. Seasoned investors like Warren Buffett suffered losses after buying Energy Future bonds. The filing could mark the start of years of expensive court-supervised negotiations, as indicated by one of the first filings on the docket. Junior creditors of its power-producing business made an unusual request to transfer the case from Wilmington, Delaware to Dallas, the company's hometown, saying it was an issue for Texans to sort out. The company also said it reached an agreement with a couple of banks to borrow $11.8 billion to finance operations during the Chapter 11 bankruptcy which it expects to last 11 months.

Energy Future joins a list of operators of coal-fired power plants that have struggled in recent years as new drilling technology created a glut of natural gas in the United States. The company's 15,400-megawatt generating unit, Luminant, relied on its large coal-fired power plants to fuel profits in the Texas power market where natural gas prices set wholesale prices. When natural gas prices fell dramatically in 2009, profit margins eroded for Luminant and other owners of coal-fired generators. Modern gas-fired plants are more economical to operate. Luminant and Energy Future's retail unit were included in the filing. But Oncor, the regulated transmission and distribution business, which ranks among the largest in the United States, did not file for bankruptcy protection. Texas regulators demanded that Oncor be "ring-fenced" to insulate it from credit woes at other EFH companies as a condition of the buyout.

FROM GOLDEN ERA TO BLACK EYE The company's collapse is a rare black eye for private equity firm KKR & Co LP (KKR.N), which led the $45 billion buyout in 2007 along with Goldman Sachs Group Inc's (GS.N) private equity arm and TPG Capital Management LP TPG.UL. They put up a combined $8 billion in equity at the time of the deal, but likely syndicated some of that to other investors, financial statements showed. The creation of EFH came at the end of what has been called a "golden era," for private equity, a period from 2006 to mid-2007, when lenders eagerly financed many of the largest LBOs. TXU, completed in October 2007, was the biggest of them. A host of creditors have been hit by losses from the LBO and subsequent financial troubles. Buffett disclosed a cumulative $873 million pre-tax loss on Berkshire Hathaway's original $2 billion investment. Bondholders owning debt issued by the company before the buyout also have lost money.

But in 2012, Oncor took over responsibility for the company's thousands of retirees and outside pension funds have invested little in Energy Future. The company has been in talks for months with its diverse group of creditors, ranging from funds like Apollo Global Management, which specialize in profiting from bankruptcy workouts, to traditional money managers such as Fidelity Investments. DEALS IN PLACE The company said it entered bankruptcy with deals in place to sever its Texas Competitive Electric Holdings (TCEH) unit, the unregulated power producer and retailer, from its parent. The deal would be accomplished without triggering a tax liability that might have cut the repayment to the parent company's creditors. The tax impact was a key sticking point in the recent months of negotiations. TCEH would emerge from bankruptcy under the ownership of its first-lien lenders, such as investment firms Apollo and Oaktree Capital Management. Ownership of the Energy Future Holding parent company would be turned over to the unsecured creditors of Energy Future Intermediate Holding Co (EFIH), which in turn owns the power line operator Oncor. Those creditors could infuse up to $1.9 billion into the business, according to an Energy Future regulatory filing.

Sources close to the talks said the creditors include hedge funds such as Avenue Capital Group, P. Schoenfeld Asset Management and GSO Capital Partners. The proposed deal would cut $2.5 billion in EFIH debt. The restructuring plans would need the approval of U.S. Bankruptcy Judge Christopher Sontchi in Delaware, who was assigned to the case. BAD BET ON GAS PRICES EFH has five large coal plants and one nuclear plant, along with eight mostly idled natural gas plants - primarily across northeast Texas. The 2007 buyout deal relied on natural gas prices remaining at least $7 per million British thermal units, the prevailing price at the time. At that price, TXU's coal-fired plants were highly profitable. But then natural gas prices fell sharply in 2009 as U.S. production swelled on advances in horizontal drilling and hydraulic fracturing, hitting a decade low of $1.95 per million Btus in April 2012. Prices now hover in the $4 range. The case is In re: Energy Future Holdings Corp, U.S. Bankruptcy Court, District of Delaware, No:14-10979.

(Additional reporting by Tanya Agrawal in Bangalore and Eileen O'Grady in Houston; Writing by Tom Hals and Terry Wade; Editing by Diane Craft) ADVERTISEMENT USATODAY.com - Enron's legacy: Scandal marked turning point Enron's legacy: Scandal marked turning point By Edward Iwata, USA TODAY As Enron's former top executives face criminal trial in Houston Monday, the legacy of Enron — the most sensational corporate fraud scandal in recent history — still ripples through the business world. The company remains a symbol of corporate greed and hubris and one of the costliest U.S. bankruptcy reorganizations ever. By Ron Edmonds, AP Kenneth Lay gives brief remarks before he refused to testify at a Senate hearing on Capitol Hill in 2002. Enron and other scandals spurred an unprecedented crackdown on corporate crime by prosecutors and regulators, who have nailed hundreds of defendants with fraud and other charges and hundreds of millions of dollars in penalties. The scandals compelled Congress in 2002 to pass the Sarbanes-Oxley Act, the most sweeping anti-fraud legislation ever, and companies are paying auditors and attorneys billions of dollars in fees to keep pace with the new rules.

Among other key changes in corporate governance, company boards must disclose their auditing controls and hire more directors with auditing expertise. The scandals shook investors' confidence and made it harder for companies to raise capital, says accounting professor Burch Kealey at the University of Nebraska-Omaha. Publicly traded companies lost $7 trillion in stock market value from 2000 through 2002 — much of it because of the corporate scandals and the Sept. 11 attacks, say analysts, economists and scholars. "Enron was a watershed event" that questioned "the integrity of the market and the accuracy of financial information," says Cynthia Richson, corporate governance officer at the Ohio Public Employees Retirement System pension fund, which lost $300 million from the corporate scandals. Moreover, Enron is the biggest Chapter 11 bankruptcy in U.S. history in court-awarded fees, racking up $780 million, says UCLA law professor Lynn LoPucki. If professional fees and services not awarded by the court are added, the total surpasses $1 billion, he says. The trial of former Enron chairman Ken Lay and former CEO Jeff Skilling will bring to a climax much of the Enron saga.

They go to trial today for their alleged roles in the massive fraud that became public in 2001. But even after the trial, Enron's impact will be felt in: •Lawsuits. A shareholders' class-action lawsuit against Enron, 10 Wall Street investment banks and law firm Vinson & Elkins continues to wind through court. By Dennis Cook, AP Jeffrey Skilling testifies before the House Commerce oversight and investigations subcommittee in 2002. Investors suffered $50 billion in total losses, says shareholders' attorney Bill Lerach, but securities laws allow them to collect only a portion of that. So far, lead plaintiff University of California and other investors have settled for $7.1 billion with Citigroup, JPMorgan Chase and CIBC. "Not much that came out of Enron was hopeful," Lerach says. "But at least when these frauds occur, we're able to remedy them." Meanwhile, 20,000 former employees and retirees in Enron's pension and 401(k) retirement plans that held Enron stock suffered $1 billion in losses, says Britt Tinglum, their Seattle attorney.

The former employees have agreed to four settlements totaling $482 million with Arthur Andersen and Enron. The only remaining defendants are Lay, Skilling and Northern Trust, trustee of Enron's 401(k) retirement plan. A trial is set for October in Houston. "There was an incredible breach of trust that's going to take some time to heal," Tinglum says. •The regulatory and corporate-governance arena. Public outrage over Enron forced Congress to pass Sarbanes-Oxley, the biggest changes in securities law since the Great Depression of the 1930s, when the Securities and Exchange Commission was created. Known as "Sarbox," Sarbanes-Oxley requires executives to certify their company finances, set up audits of internal accounting controls and disclose those controls to the SEC. Sarbanes-Oxley also created the Public Company Accounting Oversight Board, which oversees audit practices. Stock exchanges have adopted tougher listing requirements for companies. The New York Stock Exchange and Nasdaq, for instance, now require that a majority of directors be independent. Thousands of companies also have adopted tougher governance policies, such as adding independent directors who are less likely to ignore wrongdoing by corporate officers.

According to the National Association of Corporate Directors, companies with a majority of independent directors on their boards grew to 89% in 2005 from 61% in 2001. "There's been a sea change in our focus on corporate ethics," says Steve Odland, Office Depot CEO and former corporate-governance chair of the Business Roundtable industry group. "We've made more progress in the last three years than the previous 30." Large investors — the public, corporate and union pension funds that invest trillions of dollars in retirement assets — also have stepped up their watchdog duties. Shareholders' advocates argue that governance rules still are too weak, and executives remain tempted to engage in questionable accounting to meet Wall Street's earnings forecasts. Last year, for example, former SEC chairman William Donaldson failed to win enough votes from SEC commissioners on a rule that would have given shareholders more influence in directors' elections. Nor did stiffer laws stop last fall's scandal at commodities broker Refco, where former CEO Phillip Bennetthas been charged with accounting fraud. By one measure, though, the new rules appear to be working.

In 2005, shareholders' lawsuits alleging accounting fraud fell 17% to 176 filings from 213 the year before, according to Stanford University law professor Joseph Grundfest and Cornerstone Research. Some corporate boards also seem to be more alert to potential wrongdoing. During a large financial scandal last year at American International Group, directors for the insurance firm tossed longtime chairman Maurice Greenberg. The scandals "raised the floor for what is expected of companies and boards in their governance performance," says Ann Yerger, head of the Council of Institutional Investors, which represents 140 pension funds with $3 trillion in assets. •The corporate world. U.S. companies have shelled out hundreds of millions of dollars to comply with post-Enron rules, which some executives have slammed as an overreaction to the scandals. In a survey of 648 large U.S. companies, accounting professors Kealey and Susan Eldridge at the University of Nebraska-Omaha found that the corporations spent an average of $2.3 million more on audit fees in 2004 than in 2003. Businesses fear that costs of the anti-fraud rules will especially hurt small and midsize firms.

"The money helps to restore trust and faith in our system," Odland says. "But we don't want the pendulum to swing too far and stifle innovation." •The energy-trading business. In the late 1990s, Enron and other energy traders were hailed as the high-tech future of the power industry. But after Enron collapsed, dozens of industry traders were charged with fraud, firms shed their trading units and the industry saw $90 billion in debt reduced to "junk" status. In California, Enron traders were accused of worsening the state's power crisis in 2000 and 2001, when the state suffered blackouts and leaps in energy prices. The Federal Energy Regulatory Commission recently issued rules that ban manipulation of the wholesale gas and electricity market. FERC also oversaw $6.3 billion in settlements between California, Enron and other energy firms accused of market manipulation. Some think that's not enough, arguing that FERC rules and state laws must be stronger to stamp out fraudulent energy trading. "People are more circumspect because of the criminal convictions, but we've had very few substantive reforms," says Robert McCullough of energy consulting firm McCullough Research.

Beyond the fraud, others praise Enron for revolutionizing the online and electronic trading of fuel contracts. The trading helps the power industry hedge financial risks and stabilize future fuel supplies. "A lot of practices that flowed out of that company benefit the energy sector and the general economy," says Michelle Michot Foss, chief energy economist at the University of Texas at Austin. In the end, Enron's legacy likely will be judged by the toughest question to assess: whether the stronger rules will wipe out wrongdoing in the corporate landscape. The new rules "make future Enrons a little less likely to occur," says Charles Elson, a corporate-governance expert at the University of Delaware. "Sometimes it takes a disaster to create reform." Reform only goes so far, though. Says attorney Lerach: "If everybody was pure of heart, we'd be all right. But you're always going to have fraud in the markets." WorldCom files largest bankruptcy ever - Jul. 19, 2002 WorldCom files largest bankruptcy ever Nation's No. 2 long-distance company in Chapter 11 -- largest with $107 billion in assets.

July 22, 2002: 10:35 AM EDT By Luisa Beltran, CNN/Money staff writer NEW YORK (CNN/Money) - WorldCom, the nation's No. 2 long-distance phone company, filed for Chapter 11 bankruptcy protection late Sunday, nearly one month after it revealed that it had improperly booked $3.8 billion in expenses. WorldCom, crushed by its $41 billion debt load, made its filing in the Southern District of New York. With $107 billion in assets, WorldCom's bankruptcy is the largest in United States history, dwarfing that of Enron Corp. The Houston-based energy trader listed $63.4 billion in assets when it filed Chapter 11 late last year. WorldCom's non-U.S. units were not included in the filing. Bankruptcy had long been expected for WorldCom. Under Chapter 11, the company can continue to operate while it develops a reorganization plan. WorldCom last week lined up $2 billion in debtor-in-possession financing from Citigroup, J.P. Morgan and G.E. Capital that will allow it to operate while in bankruptcy. That financing still must be approved by the bankruptcy court.

WorldCom already has secured a $750 million commitment from its lenders. The additional funds will allow the company to satisfy obligations, including payment of new services, employee wages and other obligations. The bankruptcy would have no immediate effect on its customers, according to statements from both the company and Michael Powell, chairman of the Federal Communications Commission. "I want to assure the public that we do not believe this bankruptcy filing will lead to an immediate disruption of service to consumers or threaten the operation of WorldCom's Internet backbone facilities," Powell said. "This Commission stands ready to intervene in bankruptcy proceedings as necessary to ensure that the bankruptcy court is aware of and considers our public interest concerns." WorldCom, which operates the world's largest Internet network, employs 60,000 people in 65 countries. "We will use this time under reorganization to regain our financial health and focus, while operating with the highest integrity," CEO John Sidgmore stated. "We will emerge from Chapter 11 as quickly as possible and with our competitive spirit in tact." The embattled telecom also said Sunday that it elected two members to its board: Nicholas deB. Katzenbach and Dennis R. Beresford. Katzenbach is a former U.S.

attorney general and former general counsel of IBM Corp. Beresford currently is a professor of accounting at the University of Georgia and a former chairman of the Financial Accounting Standards Board. Katzenbach and Beresford will serve on a special investigative panel to review WorldCom's accounting practices. From success story to disaster story Clinton, Miss.-based WorldCom ( WCOME : Research , Estimates ) has teetered on the verge of bankruptcy since revealing on June 25 that it had incorrectly accounted for $3.8 billion in operating expenses. The admission cast WorldCom into the top tier of scandal-ridden companies alongside Tyco International, Global Crossing, Adelphia Communications and, of course, Enron. Google+ Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer . Morningstar: Â© 2016 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2016. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

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Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poorâs Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2016 and/or its affiliates. © 2016 Cable News Network. A Time Warner Company. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy . . 10 Worst Accounting Scandals of All Time [INFOGRAPH] 10 Worst Accounting Scandals of All Time [INFOGRAPH] Share Tweet Post Flip 10 Worst Accounting Scandals of All Time [INFOGRAPH] If there is one theme to rival terrorism for defining the last decade-and-a-half, it would have to be corporate greed and malfeasance. Many of the biggest corporate accounting scandals in history happened during that time. Here’s a chronological look back at 10 worst Accounting Scandals of All Time.

10 worst Accounting Scandals of All Time #1 Waste Management Scandal (1998) Company: Houston-based publicly traded waste management company What happened: Reported $1.7 billion in fake earnings. Main players: Founder/CEO/Chairman Dean L. Buntrock and other top executives; Arthur Andersen Company (auditors) How they did it: The company allegedly falsely increased the depreciation time length for their property, plant and equipment on the balance sheets. How they got caught: A new CEO and management team went through the books. Penalties: Settled a shareholder class-action suit for $457 million. SEC fined ArthurAndersen $7 million. Fun fact: After the scandal, new CEO A. Maurice Meyers set up an anonymous company hotline where employees could report dishonest or improper behavior. 10 worst Accounting Scandals of All Time #2 Enron Scandal (2001) Company: Houston-based commodities, energy and service corporation What happened: Shareholders lost $74 billion, thousands of employees and investors lost their retirement accounts, and many employees lost their jobs. Main players: CEO Jeff Skilling and former CEO Ken Lay.

How they did it: Kept huge debts off balance sheets. How they got caught: Turned in by internal whistleblower Sherron Watkins; high stock prices fueled external suspicions. Penalties: Lay died before serving time; Skilling got 24 years in prison. The company filed for bankruptcy. Arthur Andersen was found guilty of fudging Enron’s accounts. Fun fact: Fortune Magazine named Enron “America’s Most Innovative Company” 6 years in a row prior to the scandal. 10 worst Accounting Scandals of All Time #3 WorldCom Scandal (2002) Company: Telecommunications company; now MCI, Inc. What happened: Inflated assets by as much as $11 billion, leading to 30,000 lost jobs and $180 billion in losses for investors. Main player: CEO Bernie Ebbers How he did it: Underreported line costs by capitalizing rather than expensing and inflated revenues with fake accounting entries. How he got caught: WorldCom’s internal auditing department uncovered $3.8 billion of fraud. Penalties: CFO was fired, controller resigned, and the company filed for bankruptcy.

Ebbers sentenced to 25 years for fraud, conspiracy and filing false documents with regulators. Fun fact: Within weeks of the scandal, Congress passed the Sarbanes-Oxley Act, introducing the most sweeping set of new business regulations since the 1930s. 10 worst Accounting Scandals of All Time #4 Tyco Scandal (2002) Company: New Jersey-based blue-chip Swiss security systems. What happened: CEO and CFO stole $150 million and inflated company income by $500 million. Main players: CEO Dennis Kozlowski and former CFO Mark Swartz. How they did it: Siphoned money through unapproved loans and fraudulent stock sales. Money was smuggled out of company disguised as executive bonuses or benefits. How they got caught: SEC and Manhattan D.A. investigations uncovered questionable accounting practices, including large loans made to Kozlowski that were then forgiven. Penalties: Kozlowski and Swartz were sentenced to 8-25 years in prison. A class-action lawsuit forced Tyco to pay $2.92 billion to investors.

Fun fact: At the height of the scandal Kozlowski threw a $2 million birthday party for his wife on a Mediterranean island, complete with a Jimmy Buffet performance. 10 worst Accounting Scandals of All Time #5 HealthSouth Scandal (2003) Company: Largest publicly traded health care company in the U.S. What happened: Earnings numbers were allegedly inflated $1.4 billion to meet stockholder expectations. Main player: CEO Richard Scrushy. How he did it: Allegedly told underlings to make up numbers and transactions from 1996-2003. How he got caught: Sold $75 million in stock a day before the company posted a huge loss, triggering SEC suspicions. Penalties: Scrushy was acquitted of all 36 counts of accounting fraud, but convicted of bribing the governor of Alabama, leading to a 7-year prison sentence. Fun fact: Scrushy now works as a motivational speaker and maintains his innocence. 10 worst Accounting Scandals of All Time #6 Freddie Mac (2003) Company: Federally backed mortgage-financing giant. What happened: $5 billion in earnings were misstated.

Main players: President/COO David Glenn, Chairman/CEO Leland Brendsel, ex-CFO Vaughn Clarke, former senior VPs Robert Dean and Nazir Dossani. How they did it: Intentionally misstated and understated earnings on the books. How they got caught: An SEC investigation. Penalties: $125 million in fines and the firing of Glenn, Clarke and Brendsel. Fun fact: 1 year later, the other federally backed mortgage financing company, Fannie Mae, was caught in an equally stunning accounting scandal. 10 worst Accounting Scandals of All Time #7 American International Group (AIG) Scandal (2005) Company: Multinational insurance corporation. What happened: Massive accounting fraud to the tune of $3.9 billion was alleged, along with bid-rigging and stock price manipulation. Main player: CEO Hank Greenberg. How he did it: Allegedly booked loans as revenue, steered clients to insurers with whom AIG had payoff agreements, and told traders to inflate AIG stock price. How he got caught: SEC regulator investigations, possibly tipped off by a whistleblower.

Penalties: Settled with the SEC for $10 million in 2003 and $1.64 billion in 2006, with a Louisiana pension fund for $115 million, and with 3 Ohio pension funds for $725 million. Greenberg was fired, but has faced no criminal charges. Fun fact: After posting the largest quarterly corporate loss in history in 2008 ($61.7 billion) and getting bailed out with taxpayer dollars, AIG execs rewarded themselves with over $165 million in bonuses. 10 worst Accounting Scandals of All Time #8 Lehman Brothers Scandal (2008) Company: Global financial services firm. What happened: Hid over $50 billion in loans disguised as sales. Main players: Lehman executives and the company’s auditors, Ernst & Young. How they did it: Allegedly sold toxic assets to Cayman Island banks with the understanding that they would be bought back eventually. Created the impression Lehman had $50 billion more cash and $50 billion less in toxic assets than it really did. How they got caught: Went bankrupt.

Penalties: Forced into the largest bankruptcy in U.S. history. SEC didn’t prosecute due to lack of evidence. Fun fact: In 2007 Lehman Brothers was ranked the #1 “Most Admired Securities Firm” by Fortune Magazine. 10 worst Accounting Scandals of All Time #9 Bernie Madoff Scandal (2008) Company: Bernard L. Madoff Investment Securities LLC was a Wall Street investment firm founded by Madoff. What happened: Tricked investors out of $64.8 billion through the largest Ponzi scheme in history. Main players: Bernie Madoff, his accountant, David Friehling, and Frank DiPascalli. How they did it: Investors were paid returns out of their own money or that of other investors rather than from profits. How they got caught: Bernie Madoff told his sons about his scheme and they reported him to the SEC. He was arrested the next day. Penalties: 150 years in prison for Madoff + $170 billion restitution. Prison time for Friehling and DiPascalli. Fun fact: Madoff’s fraud was revealed just months after the 2008 U.S. financial collapse.

10 worst Accounting Scandals of All Time #10 Satyam Scandal (2009) Company: Indian IT services and back-office accounting firm. What happened: Falsely boosted revenue by $1.5 billion. Main player: Founder/Chairman Ramalinga Raju. How he did it: Falsified revenues, margins and cash balances to the tune of 50 billion rupees. How he got caught: Admitted the fraud in a letter to the company’s board of directors. Penalties: Raju and his brother charged with breach of trust, conspiracy, cheating and falsification of records. Released after the Central Bureau of Investigation failed to file charges on time. Fun fact: In 2011

Question: What Houston energy company went bankrupt due to massive accounting fraud?
Answer: Enron