Businesses can become successful in many ways, but there’s no method as successful and equally illegal as market manipulation, namely the artificial inflation and deflation of prices. Curious to know who would resort to such manipulating practices? Then, read on to discover some of the brands that were willing to go to such extents to make more profit, even deceiving their loyal customers. You’ll be surprised to discover some of your favorite brands on the list!
ENRON | CLAIMING PROJECTED ENERGY PROFITS WERE REAL PROFITS
Enron is the perfect example of the Wall Street sweetheart reaching dramatic heights and collapsing even more dramatically.
The Enron Corporation, based in Houston, Texas, was once the sixth-largest energy trading company in the world. Its demise started in 2001, when the Securities and Exchange Commission (SEC) started investigating the company’s transaction after Enron announced a third-quarter loss of $618 million. That was the trigger for what many consider the largest, most complicated accounting scandal in history.
Enron’s top management, eight women and four men in total, among whom chief executives Kenneth L. Lay and Jeffrey K. Skilling, were charged with fraud, conspiracy and insider trading. They received sentences between 5 and 10 years in prison for mark-to-market accounting practices which consisted of claiming that expected profits were real and inflating share values. The shares peaked at $90.75 before dramatically dropping to $0.26 in December 2001.