Finance is everywhere. No matter where you go, you’ll need money for it. Apart from church, church is free and so is the air we breathe but I wouldn’t be surprised if that changed one day in the future.
There are a lot of people in the world that think they don’t need to do what the rest of us do to earn our money. If you look back through history, you’ll see a number of different examples of people trying to make off with millions and millions and trying to get away with it.
Here at Your Money Claim, we’ve had a look back through the archives and we’ve got four of the biggest financial scandals in history. These are in no particular order but please do enjoy!
1. The Ponzi Scheme
Charles Ponzi, also known as the ‘original financial scam artist’ is exactly that; the original financial scam artist.
In the 1920s when Ponzi was at his prime, he convinced investors that if they put their money into reply coupons which could be bought in one country, they would see huge returns if they exchanged them for stamps in another country.
The margin of profit in this little scam would be the exchange rate. Or so the investors thought, in reality, what he was doing was using new investor’s money to pay off old investor’s profits. Eventually, he took about $20m in profit from it which would be the equivalent of around $200m today.
By the time he was caught, he had almost lost around two thirds of it and he single handedly brought down banks and ruined a lot of people’s lives.
2. The Enron Scandal
What was once the 7th biggest company in the US very quickly tuned into a collapsed company. Enron was, at one point estimated to have been worth around £90 billion, which is to be expected as the 7th biggest company in the whole of the US.
They originally operated in the energy sector but they decided one day to try and diversify. They chose e-commerce and other ‘luxury’ investments but they failed in the end. The company eventually folded and when they did, well that’s when it all came out.
They were found out to have been fiddling with their accounts and they also had involvement in fictitious company partnerships and also dabbled with insider trading.
3. The Libor Scandal
The Libor scandal is claimed to be the biggest financial fraud that has ever been committed and it is an acronym for the London inter-bank offered rate.
This case is something unlike the other ones we’ve mentioned as this was masterminded by the banks themselves. The former CEO of Barclays came out and said that banks all around the world were fixing interest rates in the lead up to the global financial collapse.
This scandal is said to have affected an $800 trillion market which comfortably makes this the biggest financial scandal the world has seen. During the 2007 – 2009 financial crisis it’s said that the banks were talking and sorting things between themselves so that they could lend money at a higher rate of interest than what they were borrowing it for.
This eventually led to the banks not getting back as much as they should have been and due to this, the investors were losing money and not seeing a return.