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There have been many famous cases of corporations becoming involved with accounting scandals over the years. These have led to hefty fines, bankruptcy, and even imprisonment. Here is a look at four massive companies that have been hugely affected by blatant accounting scandals.

The AIG Scandal

The American company American International Group, Inc. is a well-known multinational finance and insurance corporation. Back in 2005, AIG was the target of a series of fraud investigations. The investigations found the company’s CEO Maurice R. Greenberg was involved with massive accounting fraud to the tune of an alleged $3.9 billion, as well as price manipulation and bid-rigging. Greenberg and other executives allegedly booked loans as revenue, sent clients to insurance companies which had payoff agreements with AIG, and informed traders to inflate the stock price of AIG. Their actions resulted in AIG paying a fine of $1.6 billion, and some of the company’s executives faced criminal charges.

The Lehman Brothers Scandal

Everything looked like it was going well for the global financial services corporation Lehman Brothers Holdings, Inc.  Before the firm filed for bankruptcy in 2008, Lehman Brothers Holdings, Inc. was one of the largest investment banks in the US. The bankruptcy is still the largest bankruptcy filing in the history of the US. In 2010, the bankruptcy examiner discovered Repo 105 transactions had been used to boost Lehman Brothers’ apparent financial position around the end-of-year balance sheet’s date. Later, investigators found that the bank’s auditors had substantially assisted in the massive accounting fraud. Lehman Brothers had moved many transactions and assets off the books through a small company called Hudson Castle. That meant Lehman Brothers were able to manipulate accounting numbers relevant to the company’s finances and risks.

The Waste Management Scandal

Waste Management, Inc. is a waste management and environmental services company based in Houston, founded in 1968. But 30 years after its establishment, it was facing a monumental accounting scandal. The firm allegedly falsely increased the time-length for depreciation for their property, plant, and equipment on their balance sheets. The founder and CEO, Dean L. Buntrock was one of the leading players in this deception. When a new CEO and management team went through Waste Management, Inc.’s books in 1998, they discovered the accounting manipulation. Waste Management, Inc. reportedly declared $1.7 billion in fake earnings. The SEC fined the auditors Arthur Andersen $7 million, and Waste Management, Inc. settled a shareholder class-action suit for $457 million.

The Enron Scandal

The Enron scandal continues to be one of the most well-known incidents of significant accounting manipulation. The Enron Corporation was a US energy, commodities, and service company. In 2001, shareholders lost $74 billion, many employees lost their jobs, and thousands of investors and employees lost their retirement accounts. All because Enron kept massive debts off its books. The accounting fraud consisted of systematic, creative, and institutionalized manipulation and deceit. CEO Jeff Skilling was sentenced to serve 24 years in prison, and CEO Ken Lay died before he could serve time. The scandal led to Enron filing for bankruptcy. Some good came out of the Enron accounting scandal, though. It brought up the issue of accounting practices and activities of many major corporations in the US and became a vital factor in the enactment of the 2002 Sarbanes–Oxley Act.