Biggest Stock Scams of the World
Okay, back to lesson time. We will talk about "Biggest Stock Scams of the World" in this week. Enjoy~😁
Scam#1: ZZZZ Best (1986)
Barry Minkow, the owner of this business, claimed that this carpet cleaning company of the 1980s would become the "General Motors of carpet cleaning." Minkow appeared to be building a multi-million dollar corporation, but he did so through forgery and theft. He created more than 20,000 phony documents and sales receipts without anybody suspecting anything.
Although his business was a fraud designed to deceive auditors and investors, Minkow shelled out more than $4 million to lease and renovate an office building in San Diego. ZZZZ Best went public in December of 1986, eventually reaching a market capitalization of more than $200 million. Amazingly, Barry Minkow was only a teenager at the time. He was sentenced to 25 years in prison.
Scam#2: Centennial Technologies (1996)
In December 1996, Emanuel Pinez, the CEO of Centennial Technologies, and his management recorded that the company made $2 million in revenue from PC memory cards. However, the company was really shipping fruit baskets to customers. The employees then created fake documents as evidence that they were recording sales. Centennial's stock rose 451% to $55.50 per share on the New York Stock Exchange (NYSE).
According to the Securities and Exchange Commission (SEC), between April 1994 and December 1996, Centennial overstated its earnings by about $40 million. Amazingly, the company reported profits of $12 million when it had lost approximately $28 million. The stock plunged to less than $3. Over 20,000 investors lost almost all of their investment in a company that was once considered a Wall Street darling.
Scam#3: Bre-X Minerals (1997)
This Canadian company was involved in one of the largest stock swindles in history. Its Indonesian gold property, which was reported to contain more than 200 million ounces, was said to be the richest gold mine, ever. The stock price for Bre-X skyrocketed to a high of $280 (split-adjusted), making millionaires out of ordinary people overnight. At its peak, Bre-X had a market capitalization of $4.4 billion.
The party ended on March 19, 1997, when the gold mine proved to be fraudulent, and the stock tumbled to pennies shortly after. The major losers were the Quebec public sector pension fund, which lost $70 million, the Ontario Teachers' Pension Plan Board, which lost $100 million, and the Ontario Municipal Employees' Retirement Board, which lost $45 million.
Scam#4: Bernard Madoff (2008)
Bernard Madoff, the former chairman of the Nasdaq and founder of the market-making firm Bernard L. Madoff Investment Securities, was turned in by his two sons and arrested on Dec. 11, 2008, for allegedly running a Ponzi scheme. The 70-year-old kept his hedge fund losses hidden by paying early investors with money raised from others. This fund consistently recorded an 11% gain every year for 15 years.
The fund's supposed strategy, which was provided as the reason for these consistent returns, was to use proprietary option collars that are meant to minimize volatility. This scheme duped investors out of approximately $50 billion.
Alright, this is all from today lesson. More and more topics will be discussed in the future. Stay Tune~😜
Sign Up for our Newsletter and receive a Mysterious Gift by clicking this link: https://bryanandrobertpublishing.com
#scam #scandal #moneyheist #stockmarket #investor
Scam#1: ZZZZ Best (1986)
Barry Minkow, the owner of this business, claimed that this carpet cleaning company of the 1980s would become the "General Motors of carpet cleaning." Minkow appeared to be building a multi-million dollar corporation, but he did so through forgery and theft. He created more than 20,000 phony documents and sales receipts without anybody suspecting anything.
Although his business was a fraud designed to deceive auditors and investors, Minkow shelled out more than $4 million to lease and renovate an office building in San Diego. ZZZZ Best went public in December of 1986, eventually reaching a market capitalization of more than $200 million. Amazingly, Barry Minkow was only a teenager at the time. He was sentenced to 25 years in prison.
Scam#2: Centennial Technologies (1996)
In December 1996, Emanuel Pinez, the CEO of Centennial Technologies, and his management recorded that the company made $2 million in revenue from PC memory cards. However, the company was really shipping fruit baskets to customers. The employees then created fake documents as evidence that they were recording sales. Centennial's stock rose 451% to $55.50 per share on the New York Stock Exchange (NYSE).
According to the Securities and Exchange Commission (SEC), between April 1994 and December 1996, Centennial overstated its earnings by about $40 million. Amazingly, the company reported profits of $12 million when it had lost approximately $28 million. The stock plunged to less than $3. Over 20,000 investors lost almost all of their investment in a company that was once considered a Wall Street darling.
Scam#3: Bre-X Minerals (1997)
This Canadian company was involved in one of the largest stock swindles in history. Its Indonesian gold property, which was reported to contain more than 200 million ounces, was said to be the richest gold mine, ever. The stock price for Bre-X skyrocketed to a high of $280 (split-adjusted), making millionaires out of ordinary people overnight. At its peak, Bre-X had a market capitalization of $4.4 billion.
The party ended on March 19, 1997, when the gold mine proved to be fraudulent, and the stock tumbled to pennies shortly after. The major losers were the Quebec public sector pension fund, which lost $70 million, the Ontario Teachers' Pension Plan Board, which lost $100 million, and the Ontario Municipal Employees' Retirement Board, which lost $45 million.
Scam#4: Bernard Madoff (2008)
Bernard Madoff, the former chairman of the Nasdaq and founder of the market-making firm Bernard L. Madoff Investment Securities, was turned in by his two sons and arrested on Dec. 11, 2008, for allegedly running a Ponzi scheme. The 70-year-old kept his hedge fund losses hidden by paying early investors with money raised from others. This fund consistently recorded an 11% gain every year for 15 years.
The fund's supposed strategy, which was provided as the reason for these consistent returns, was to use proprietary option collars that are meant to minimize volatility. This scheme duped investors out of approximately $50 billion.
Alright, this is all from today lesson. More and more topics will be discussed in the future. Stay Tune~😜
Sign Up for our Newsletter and receive a Mysterious Gift by clicking this link: https://bryanandrobertpublishing.com
#scam #scandal #moneyheist #stockmarket #investor
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