Fraud Examination Professional Certification

Blog & News

1998

After the $ 14-billion merger of Hospitality Franchise Systems and CUC International, Cendant was formed. Months after the merger huge accounting misappropriations were discovered. The fraud cost investors $ 19 billion. Former CEO Walter Forbes was forced to resign and after a fraud investigation by the SEC, was sentenced to 12 years in prison.

2001

Energy company, Enron, declared bankruptcy after a massive accounting fraud which wiped out $ 78 billion in stock market value. Among those to fall in the aftermath was accounting firm, Arthur Andersen. Post investigation of the fraud, former president of the firm, Jeff Skilling is serving a 24-year sentence.

2002

WorldCom, a telecom company, declared bankruptcy due to fraud. For a time, it was USA’s largest telecom company after AT&T. In the face of decreasing stock prices, WorldCom used fraudulent accounting methods to disguise its decreasing earnings to maintain the price of WorldCom’s stock. Former CEO Bernard Ebbers is serving a 25-year prison sentence.

2002

Tyco was a blue-chip Swiss security systems company. The CEO, Dennis Kozlowski and CFO, Mark Swartz, siphoned money through unapproved loans and fraudulent stock sales. Tyco ended up paying $ 2.92 billion to investors.

2002

In 2000 Qwest Communications’ stock was at $ 64 and in 2002 it was less than a dollar. All due to an accounting fraud perpetrated over several years. CEO Joseph Nacchio ended up going to jail for insider trading.

2003

Richard Scrushy, CEO of HealthSouth, a publicly traded healthcare company, allegedly told his juniors to cook up numbers and transaction from 1996 to 2003. Numbers were allegedly inflated by $ 1.4 billion to meet stockholder expectations.

2006

Mortgage giant FannieMae paid $ 400 million to the SEC to settle charges of misstating financial statements for the previous 6 years. In December 2011, FannieMae was again charged, this time with a civil suit for misleading investors. The Government took over the company in 2008.

2008

A $ 65 billion Ponzi scheme became the largest fraud ever perpetrated by an individual. Bernard Madoff was exposed when he confessed his actions to his sons. Madoff had managed to dupe several smart investors into investing their charity funds in his firm. This money was then used to fund a lavish lifestyle. Madoff is now serving a 150-year prison sentence.

2008

The Lehman Brothers investment bank, with $ 600 billion in assets, declared bankruptcy. This was the largest bankruptcy in history and sparked off the global financial crisis. Fingers were pointed at their auditor, Ernst & Young, but nothing every came of it.

2011

MF Global, a brokerage firm, declared bankruptcy. It had been facing severe pressure on its liquidity in the previous months. Later, the firm made improper transfers of $ 891 million from their customer accounts to an MF broker-dealer account to cover the trading losses they had incurred. Eventually, when they shut down, customer losses stood at $ 1.6 billion.