Death Match: The Worst Financial Scandal Of All Time (VOTE)

Lots of people out there are saying the Libor scandal is the worst financial scandal of all time. But how can we even know such a thing? There's only one way: A death match.

The relative horror of a financial scandal is subjective. For instance, to me, the worst financial scandal of all time was when the AOL vending machine took my dollar and didn't give me a Snickers bar. I'll see you in hell, Champion Vending!

But many of you probably think other financial scandals are more important than that. The only way to settle this is in a bracket-style death match to decide, once and for all -- or until the next death match -- the worst financial scandal of all time.

Here's a quick review of the contestants, ranked in the order that I subjectively and unscientifically seeded them, along with the arguments in favor of each:

1. Libor scandal: For years, some of the world's biggest banks have manipulated an interest rate that affects borrowing costs for just about everybody. The scandal could cost the banks $35 billion in fines and legal costs, according to one estimate, and Libor manipulation probably cost taxpayers, borrowers and investors more than that.

2. Enron: This horrible, horrible company is special not only for its spectacular accounting fraud, but also because it managed to further screw the public by manipulating California's energy market. The Enron scandal led to Sarbanes-Oxley and the death of accounting firm Arthur Andersen.

3. Bernie Madoff Ponzi Scheme: In the biggest individual act of financial fraud in U.S. history, Bernie cost his victims about $18 billion. Not bad.

4. Subprime CDOs: Investment banks took junk mortgages that were hand-picked by hedge funds betting against them, crammed them into bundles and sold them to gullible investors, helping set the stage for the financial crisis of 2008.

5. Charles Ponzi, the O.G. Ponzi schemer: The Italian immigrant fleeced his victims for about $20 million in 1920, or about $229 million in 2012 money. That's not the most expensive fraud of all time, but the fact that people forever after named this kind of scheme for him puts him in the running.

6. Nick Leeson Rogue Trades: This is almost more an example of a trade gone horribly wrong (the subject of a future death match), but this trader committed fraud in hiding losses of more than $1 billion (more than $2 billion in 2012 money) from his superiors, leading to the death of Barings Bank in 1995. He is also arguably the most famous rogue trader in history.

7. Allen Stanford Ponzi Scheme: This guy bilked his victims for $7 billion over 20 years, putting him close to Madoff's league.

8. Tom Petters Ponzi Scheme: So much for Minnesota Nice: This Twin Cities businessman took $3.7 billion from his victims, making it one of the worst Ponzi schemes in history.

Stupid list, you might well be thinking. Well, feel free to write in candidates in the comments section. Maybe we can have another death match.

Comments

[hopeseeker]

10:24 PM on 08/16/2012

I won! I won!

You can keep the prize money. I want a date with Ariana.

[ur2nutty4me]

06:17 AM on 08/16/2012

Now give me the percentage of all people involved in these scams who have seen the inside of a jail, or even a Tastefully designed ankle bracelet.

[[e-mail]]

01:58 AM on 08/16/2012

THE WORST FINANCIAL SCANDAL OF ALL TIME ... !!!

" ... you can't find another thinker or writer who did a better job of describing and laying out the moral case for capitalism than Ayn Rand". (Paul Ryan)

REPUBLICANS ARE STARK, RAVING MAD ... !!!

[Stoopid American]

11:44 PM on 08/15/2012

Oh and you left the biggest scandal of all off the list: the completely-unaccounted-for derivatives shadow banking system. Uninsured, uncapitalized, raw wagers totalling TEN times the entire world GDP combined. How much wealth has been squirreled away in there? And who is the Dr. Evil that controls it all?

[Stoopid American]

11:42 PM on 08/15/2012

As much as I loathed Enron, Libor makes it look like Romper Room.

[Janzee12000]

06:04 PM on 08/15/2012

When I play a game to win it is supposed to make you feel good. This does nothing of the sort...

[vai488099]

05:22 PM on 08/15/2012

I would like to nominate Lincoln Savings and Loan as a strong contender for the title ! LOL !

[ur2nutty4me]

07:00 AM on 08/16/2012

Not a pimple.................

[investorism]

03:37 PM on 08/15/2012

P.S. Canada’s Assante Corp's U.S. subsidiaries, included:

i.) Moorad (Jerry Maguire) Sports Management Inc.

ii.) Werba Reinhard Holding Ltd.

iii.) Maximum Sports Management Inc.

iv.) Savitsky & Company

v.) Philpott, Bills and Stoll, LLP

vi.) RWB Advisory & RWB Sec.

Twelve inches of Assante whistleblower documents were couriered to NY-AG Eliot Spitzer in Aug—Sept 2004.

Spitzer never laid any charges v. the principals of Assante Corp. who were then running Loring Ward International, the successor company that owned Assante's U.S. subsidiary dealers.

In Canada, RCMP IMET took almost 6-years to shelve its 2-slothful investigations of Assante. IMET's Assante investigation closing letter showed that IMET was part of the huge Canadian SRO regulatory bodies & 13-securities commissions collusion--conspiracy cover up and burial of Assante's 50% escrowed shares business model + premeditated predation churning--secret commissions instigating sales practices.

RCMP IMET Supt. Eric Mattson's January 11, 2010, letter:

The matter of secret commissions has been discussed at length within this
office, the Toronto office and through legal counsel and prosecutors for IMET.
This is a matter of law and the legal opinion rendered by all the lawyers is that the
offence is not made out. Although the opinion states the practice as noted by
Assante and other mutual fund companies was not fair it was a practice known
and authorized by regulatory agencies and commissions and once identified as
being unfair steps were taken, and complied with, by Assante and other firms.

[investorism]

03:31 PM on 08/15/2012

Canada's Assante Corp's (1996--2004) up to 50% escrowed shares out 3 to 5 years later business model was used to conglomerate its 25-CDN & 6-U.S. securities dealers.

Assante's 300,000+ clients included: Tom Cruise, David Letterman, half of the NFL starting quarterbacks, Pavel Bure, Pat Verbeek, Bobby Holik and other NHL players - still don't know that they were leached out of $15+ billion.

Assante's MO - it used its own private company stock as its conglomerator currency with a promise of going public when its in-house proprietary Assets Under Management (AUM) ='d multi-billions.

Up to 50% of Assante's purchase shares were escrowed out 3-5 years -- and could be earned--released from Assante's treasury when the conglomerated salespersons self-interest Redemption / Switch CHURNED 40% of their clients' out of their 3rd party owned Assets Under Administration (AUA) funds and into Assante's own in-house AUM proprietary funds -- that were ranked in the lowest quartile of investment performance rankings.

From Page 16 of Assante Corp’s own May 19, 1999, Final IPO Prospectus:

By earning the privilege of managing client assets, there is the potential for a nine to sixteen fold increase in operating margins when assets under administration [ AUA ] also become assets under management [ AUM ]. This potential margin expansion is based on assumed industry average margins for assets under management (90 to 120 basis points) and assets under administration (7.5 to 10 basis points).

[DeceptionIsReality]

02:28 PM on 08/15/2012

CDO's and housing collapse greatest swindle in global financial history. It was so good in fact most people don't even know what happened.

[PenFighter]

11:40 AM on 08/15/2012

I find I have trouble separating LIBOR and CDOs enough to make any sort of distinction between the scandals--they were both running concurrently--because it depends on the criteria you use to judge them. For sheer devastation to the world economy, CDOs would probably take the dubious prize. but in dollar amounts, LIBOR could possibly be bigger, given the size of the markets involved.

My main problem is that the LIBOR manipulation would also have been used to goose up the earnings from your CDOs, whose interest charges are based upon LIBOR.

[how goes the matrix]

11:39 AM on 08/15/2012

I suppose that's the best we can do --- make jokes

Laugh all the way to the poorhouse ... and indentured servitude to our criminal financial/political class a.k.a. elites - The best and the brightest ...

As far as the US of A is directly concerned -- I'd have to list the illusion of democratic choice - instead possessing a two party corporate duopoly as the greatest scam facing the nation presently .. You see if both parties are "bought and corrupt" (and they certainly are) then the nation is aimlessly adrift in a sea of oppression, despair and hopelessness.

Rule of law? National "elections"? Pure farce --

What has been done and continues to do incalculable damage to the nation, the destruction of trust in markets and institutions as the greatest many of the nations citizens -- are pushed aside, marginalized and plowed under. No amount of status quo FED money infusions and tinkering or captured regulatory will suffice to correct the ills of a criminal financial system.

The nation needs truth and reconciliation .. perhaps a constitutional convention -- indeed it is in need of a paradigm shift --in social, economic, political, financial frameworks -- or will endure long suffering, oppression and continued loss of freedoms ...

In short -- ROME -- is indeed burning ... and its leadership obviously absent ...

[DeceptionIsReality]

02:29 PM on 08/15/2012

Most intelligent thing I have read on here in month. I would fan you again if I could.

[donnyraindog]

11:22 AM on 08/15/2012

HP,please stop picking on the banking industry ,we all know how sensitive these poor fellows are!

[fortressfountain]

11:02 AM on 08/15/2012

You assume they did not lose the money for a giveaway.
A couple of years from now health care will be a bigger scandal than the others.

[PenFighter]

11:44 AM on 08/15/2012

Only the current US health care system is a scandal. We're talking about world-wide impact, though. Most "westernized" nations are actually pretty happy with their social health care, which costs them a fraction what ours does, and has FAR better medical outcomes.

[DeceptionIsReality]

02:31 PM on 08/15/2012

Agree. Healthcare is most likely the next bubble.

[ur2nutty4me]

10:48 AM on 08/15/2012

I think computer trading should have been one of the choices. The amount siphoned out of the economy makes most if not all pale in comparison and still continues..