4 History-Making Wall Street Crooks :Part 2

Michael Milken

Bernard Ebbers

In my previous post I have mentioned the two great criminals who had shadowed the Wallstreet and led to darkness.The other two Michael Milken and Bernard Ebbers are next in the list with the same trend but with different approach( they are truly called as smart zeroes)

The Junk Bond King: Michael Milken:He was doing nothing more than creating a complex pyramid scheme. When one company would default, he would then refinance some more debt. Both Milken and Drexel Burnham Lambert would continue to make their fees as a result of this behavior. The company made at least half of its profits from the work of Milken. Later on, Milken also started purchasing stock in companies that he knew would become potential takeover targets. Boesky, when charged with insider trading in 1986, helped implicate both the firm and Milken in several insider trading scandals. This led to criminal charges against the firm and more than 70 charges against Milken, who pleaded guilty, was sentenced to 10 years in prison and paid $1 billion in fines.

The Financial Statement Fraudster: Bernard Ebbers was the CEO of a long-distance telecommunications company called WorldCom. Over a six-year period, the company made 63 acquisitions, the largest of which was MCI in 1997. All of these acquisitions created problems for the company inasmuch as it was difficult to integrate the old company with each new one. To keep earnings growing, the company would write off millions of dollars in losses it acquired in the current quarter and then have smaller losses going forward to create the perception that the company was making more money than it really was. When WorldCom filed for bankruptcy, it admitted that it inappropriately booked the losses from its acquisitions from 1999 to 2002. Ebbers also took personal loans from the company. He resigned as CEO in April 2002 and was later convicted of fraud, conspiracy and filing false documents with the SEC. He was sentenced to 25 years in prison

There have been criminals who have tried to disguise themselves as honest business people. Many of these crooks rose quickly to power only to have a hard crash landing in the end.