List of International Financial Scams in History

There have been several scams throughout history that have duped institutions, investors, and individuals. Some of the biggest financial scams in history are:

• Charles Ponzi Scam (1919)– Charles Ponzi, an Italian immigrant living in Boston, was the mastermind behind this scam. He came up with a scheme that involved purchasing international reply coupons for cheap abroad and then selling them at a profit in the US. The earlier investors were paid with the funds collected from the newer investors.
• Waste Management (1998)– Waste Management was a publicly traded company based out of Houston. They falsely increased the depreciation period of their property, plants, and machinery on their balance sheets. They adjusted their accounting records to fraudulently show that the company had met its targets that were shared with the analysts. The estimated losses were about $6 billion.
• Enron (2001)– Enron was a company that would carry out trade in natural gas and other commodities. It was crowned as “America’s Most Innovative Company” by Fortune Magazine. It used accounting tricks to hide mounting debts and losses from shareholders. The estimated loss at that time was $74 billion.
• Worldcom (2002)– The Mississippi-based telecommunications company defrauded its investors for over $11 billion. The company found itself overextended and used fraudulent accounting practices to hide its losses. The company’s internal audit department uncovered the fraud.
• Bernard Madoff (2008)– Bernard Madoff was the mastermind of the biggest Ponzi scheme in history. He defrauded investors of an estimated $64.8 billion. He invented stock trades and fabricated brokerage accounts. The profits were pocketed by him and he would pay the investors with other inventors’ money.
• Lehman Brothers (2008)– Lehman Brothers was a financial services firm for over 150 years. It collapsed due to the usage of cosmetic accounting tricks which was exposed by the subprime mortgage crisis. The bank was forced to file for bankruptcy. The failure of the fourth-largest investment bank in the US at that time had severe ramifications for the global economy.
• Theranos (2016)– Theranos CEO Elizabeth Holmes and Chief Operating Officer Ramesh “Sunny” Balwani, raised billions for their healthcare startup. They claimed their automated compact testing device could conduct a range of common blood tests with a single trick thereby making blood tests more efficient, accurate and faster. Later they were exposed as unworkable by medical testing professionals.
• Wells Fargo (2016)– Wells Fargo was a bank that was involved in a class action lawsuit. It was accused of defrauding investors after a fake account scandal. It had opened millions of unauthorised accounts for existing customers to meet sales goals. This was done without the consent of the customers. Wells Fargo had to pay $185 million in fines and penalties.
• Wirecard (2020)– Wirecard was a Germany based electronics payment firm. Wirecard declared insolvency in 2020 and regulators found that 1.9 billion euros were missing from the company’s accounts. There was misappropriation of company funds and billions were raised from banks and investors to cover the company’s losses.
• FTX (2022)– The crypto exchange company collapsed after a liquidity crunch. It had been using customer deposits to fund risky bets through a hedge fund. The fraud was estimated at over $7 billion. Wire fraud, securities fraud and money laundering were some of the activities being carried out by the company.

List of Financial Scams in History: A financial scam is a fraudulent scheme or practice that tricks individuals, investors, and institutions into losing their money. These are usually carried out by a single person or a company. They can take various forms and exploit the vulnerabilities of the financial system of the country.

There are several financial scams in history. some of them are bank frauds, and others are stock market frauds. In this article, we will discuss the financial scams in history. we will discuss international as well as Indian Scams.