A COLLECTION OF FINANCIAL CRIMES RELATED DECIDED CASES FROM 1990 TO DATE. 

This is a nice resource for students as well as practitioners.

1990s: The Rise of Corporate Fraud and Rogue Trading

1. Bank of Credit and Commerce International (BCCI) Scandal (1991)

  • Overview: BCCI was a major international bank involved in widespread fraud, money laundering, and bribery.
  • Mechanism: The bank engaged in illicit activities, including secretly controlling banks in the U.S., laundering money, and financing terrorism.
  • Outcome: BCCI was shut down in 1991; regulators seized $20 billion in assets.
  • Impact: Highlighted the need for stronger international banking regulations.

2. Barings Bank Collapse (1995, UK/Singapore)

  • Overview: Barings Bank, a 233-year-old British institution, collapsed due to unauthorized trading by Nick Leeson.
  • Mechanism: Leeson made speculative trades on the Nikkei 225 index, hiding losses in a secret account labeled “88888.” The Kobe earthquake exacerbated losses.
  • Outcome: Barings incurred losses of £827 million ($1.3 billion) and was declared insolvent. Leeson was sentenced to six and a half years in prison.
  • Impact: Led to reforms in risk management and internal controls within financial institutions.

3. Daiwa Bank Scandal (1995, Japan/US)

  • Overview: A trader at Daiwa Bank’s New York branch concealed $1.1 billion in losses over 11 years.
  • Mechanism: The trader engaged in unauthorized bond trading and falsified records to hide losses.
  • Outcome: Daiwa Bank pleaded guilty to criminal charges and paid $340 million in fines. The U.S. banned Daiwa from operating in the country.
  • Impact: Emphasized the importance of oversight in international banking operations.

2000s: Corporate Accounting Scandals and Regulatory Overhauls

4. Enron Scandal (2001, USA)

  • Overview: Enron used complex accounting practices to hide debt and inflate profits.
  • Mechanism: Employed “special purpose entities” to keep liabilities off the balance sheet.
  • Outcome: Enron filed for bankruptcy; executives Kenneth Lay and Jeffrey Skilling were convicted.
  • Impact: Prompted the Sarbanes-Oxley Act of 2002, enhancing corporate accountability.

5. WorldCom Scandal (2002, USA)

  • Overview: WorldCom inflated assets by over $11 billion through improper accounting.
  • Mechanism: Capitalized operating expenses to present inflated profits.
  • Outcome: Filed for bankruptcy; CEO Bernard Ebbers was sentenced to 25 years in prison.
  • Impact: Reinforced the need for stringent financial reporting standards.

6. Tyco International Scandal (2002, USA)

  • Overview: Executives misappropriated company funds for personal use.
  • Mechanism: Unauthorized bonuses and stock sales without board approval.
  • Outcome: CEO Dennis Kozlowski was sentenced to up to 25 years in prison.
  • Impact: Highlighted the necessity for corporate governance reforms.

7. Siemens Bribery Scandal (2008, Germany)

  • Overview: Siemens engaged in systematic bribery to win contracts worldwide.
  • Mechanism: Maintained slush funds to pay bribes across multiple countries.
  • Outcome: Paid over $1.6 billion in fines to U.S. and European authorities.
  • Impact: Led to stricter enforcement of anti-corruption laws globally.

8. Bernard Madoff Ponzi Scheme (2008, USA)

  • Overview: Madoff orchestrated the largest Ponzi scheme in history, defrauding investors of $17.5 billion.
  • Mechanism: Promised consistent returns, using new investors’ funds to pay existing ones.
  • Outcome: Sentenced to 150 years in prison; died in 2021.
  • Impact: Underscored the importance of due diligence and regulatory oversight.

2010s: Global Financial Manipulations and Leaks

9. Raj Rajaratnam (Galleon Group) Insider Trading (2011, USA)

  • Overview: Hedge fund manager convicted for insider trading.
  • Mechanism: Obtained non-public information from corporate insiders.
  • Outcome: Sentenced to 11 years in prison.
  • Impact: Marked a significant victory in combating insider trading.

10. Libor Scandal (2012-2015, UK/US/EU)

  • Overview: Banks manipulated the London Interbank Offered Rate (Libor) for profit.
  • Mechanism: Submitted false interest rates to benefit trading positions.
  • Outcome: Multiple banks fined billions; some traders prosecuted.
  • Impact: Led to the overhaul of benchmark rate-setting processes.

11. HSBC Money Laundering Case (2012, USA/UK)

  • Overview: HSBC failed to prevent money laundering by drug cartels.
  • Mechanism: Lax controls allowed illicit funds to flow through the bank.
  • Outcome: Paid $1.9 billion in fines; entered into a deferred prosecution agreement.
  • Impact: Highlighted the need for robust anti-money laundering measures.

12. 1MDB Scandal (2015-2018, Malaysia/US/Singapore)

  • Overview: Malaysian sovereign wealth fund misused for personal gain.
  • Mechanism: Embezzlement of funds through complex financial transactions.
  • Outcome: Goldman Sachs paid over $2.9 billion in fines; several individuals prosecuted.
  • Impact: Exposed vulnerabilities in global financial systems to corruption.

13. Panama Papers Leaks (2016, Global)

  • Overview: Leak of documents revealing offshore tax havens used by the elite.
  • Mechanism: Mossack Fonseca law firm facilitated the creation of shell companies.
  • Outcome: Led to investigations, resignations, and policy changes worldwide.
  • Impact: Increased transparency and scrutiny of offshore financial activities.

14. Wells Fargo Fake Accounts Scandal (2016, USA)

  • Overview: Employees created millions of unauthorized accounts to meet sales targets.
  • Mechanism: Opened accounts without customer consent, incurring fees.
  • Outcome: Fired 5,300 employees; paid $185 million in fines.
  • Impact: Sparked discussions on ethical sales practices in banking.

15. Petrobras Corruption (Lava Jato) (2014-2019, Brazil)

  • Overview: Massive bribery scheme involving Brazil’s state oil company.
  • Mechanism: Contractors paid bribes to secure contracts; funds funneled to politicians.
  • Outcome: Numerous convictions, including high-ranking officials.
  • Impact: Demonstrated the pervasiveness of corruption in state enterprises.

2020s: Digital Age Financial Frauds and Institutional Failures

16. Wirecard Scandal (2020, Germany)

  • Overview: Fintech company falsely reported $2.1 billion in cash balances.
  • Mechanism: Created fictitious revenue streams and falsified accounts.
  • Outcome: CEO arrested; company filed for insolvency.
  • Impact: Raised concerns over regulatory oversight of fintech firms.

17. Credit Suisse Greensill Scandal (2021, Switzerland/UK)

  • Overview: Credit Suisse’s exposure to Greensill Capital led to significant losses.
  • Mechanism: Invested in supply-chain finance funds linked to Greensill.
  • Outcome: Credit Suisse faced lawsuits and regulatory scrutiny.
  • Impact: Highlighted risks associated with complex financial products.

18. Robinhood GameStop Case (2021, USA)

  • Overview: Retail investors drove up GameStop’s stock price, challenging hedge funds.
  • Mechanism: Coordinated buying through platforms like Reddit; Robinhood restricted trading.
  • Outcome: Congressional hearings; no major convictions.
  • Impact: Sparked debates on market manipulation and trading platform responsibilities.

19. Deutsche Bank Epstein Ties (2021, USA/Germany)

  • Overview: Deutsche Bank failed to monitor Jeffrey Epstein’s transactions.
  • Mechanism: Lapses in anti-money laundering controls.
  • Outcome: Paid $150 million in fines.
  • Impact: Emphasized the importance of monitoring high-risk clients.

20. FTX Collapse (2022, USA/Bahamas)

  • Overview: Cryptocurrency exchange FTX filed for bankruptcy amid allegations of misuse of customer funds.
  • Mechanism: Alleged commingling of funds between FTX and Alameda Research.
  • Outcome: Founder Sam Bankman-Fried arrested and faces multiple charges.
  • Impact: Led to increased calls for cryptocurrency regulation.

21. Credit Suisse Collapse & UBS Takeover (2023, Switzerland)

  • Overview: Credit Suisse faced a crisis of confidence, leading to its acquisition by UBS.
  • Mechanism: Accumulated losses and scandals eroded investor trust.
  • Outcome: UBS acquired Credit Suisse in a government-brokered deal.
  • Impact: Marked a significant consolidation in Swiss banking.

2024–2025: Emerging Trends and Regulatory Responses

22. Binance Money Laundering Case (2023, USA)

  • Overview: Binance faced allegations of facilitating money laundering.
  • Mechanism: Weak compliance controls allowed illicit transactions.
  • Outcome: Paid $4.3 billion in fines; CEO Changpeng Zhao pleaded guilty.
  • Impact: Signaled a crackdown on cryptocurrency exchanges.

23. Terra-LUNA Crypto Crash (2022-2024, South Korea/US)

  • Overview: Collapse of algorithmic stablecoin Terra led to massive investor losses.
  • Mechanism: Flawed design and lack of collateralization.
  • Outcome: