“Greed is good,” said Gordon Gekko, the villain of the 1987 movie Wall Street. Unfortunately, some real-life Wall Street traders took Gekko’s advice seriously, and in doing so, ruined countless lives. Here are 24 of the slimiest Wall Street scandals.
22. Bernie Madoff
Bernie Madoff’s name became synonymous with shady dealings after the 2008 recession. For nearly 30 years, Madoff operated a Ponzi scheme, offering stock deals to a select group, explaining his methods “were too complicated for outsiders to understand.” But as banks faltered toward the end of 2008, Madoff’s scheme was revealed. Investors lost $50 billion, and some clients even committed suicide.
21. The Wiggin Act
Just as Madoff became the face of the 2008 Recession, Albert H. Wiggin, a top banker at Chase National, became the face of the Great Depression. Even as he helped Chase expand in the early 20th century, he was shorting the bank’s stock. When the market crashed in 1929, Wiggin profited by $4 million—such an egregious violation of trust that the US government named their law banning insider trading “the Wiggin Act.”
20. The White Knight of Wall Street
Richard Whitney’s desperate, and ultimately futile, attempts to prevent the 1929 market crash won him praise from other financiers and led to him being named president of the New York Stock Exchange. Unfortunately, it was behaviour like Whitney’s that caused the crash in the first place: An obsessive trader who liked to gamble on his investments, Whitney continued to lose money, borrowing from wealthy friends and eventually embezzling from his clients. When he was arrested in 1938, 6,000 people turned up to watch him be led away in handcuffs.
19. Whale of a Scandal
In 2012, JP Morgan Chase’s London office reported a loss of $6.2 billion. In what came to be known as the “London Whale scandal,” the losses were traced back to trader Bruno Iksil, who had hedged bets on several credit default swaps, hoping to turn a profit for the company. This backfired spectacularly, and led to an investigation by the US government and an agreement by the bank to pay back $920 million to investors.
18. The Junk Bond King
Michael Milken specialized in junk bonds, high-risk investments which could nonetheless yield very high rewards. In fact, around Wall Street, everyone knew Milken as the “Junk Bond King.” But how did Milken make his junk bonds pay off every time? Through a combination of indifference to SEC regulations and insider trading, of course. Milken would later be charged, and serve time, for everything from racketeering to tax evasion. Milken pulled out of it just fine, though: by 2010, he was the world’s 488th richest person.
17. The Real-life Gordon Gekko
Oliver Stone didn’t invent Gordon Gekko whole-cloth. The villain of Wall Street was based in part on stock trader Ivan Boesky, who actually delivered the now-famous “greed is good” line at a business school commencement speech. In the 1986 speech, Boesky said, “I think greed is healthy. You can be greedy and still feel good about yourself.”
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