- 4 days ago
They say one bad apple spoils the bunch, but these individuals obliterated entire companies! Join us as we count down corporate collapses caused by a single person's catastrophic decisions. From financial fraud to strategic blunders and ego-driven disasters, these cautionary tales show how quickly empires can fall when the wrong person takes control.
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00:00Elizabeth Holmes taking her last steps of freedom, looking back as her partner and parents
00:06wave goodbye and blow kisses her way.
00:08Welcome to WatchMojo, and today we're counting down our picks for the most cautionary downfalls
00:12of companies under the mismanagement or malpractice of a single employee.
00:16I did not, I myself, did not see the depth and violence of the crisis.
00:23Sure, the iconic vehicle that bore his name took us back to the future in 1985,
00:50but John DeLorean probably wished he could go back in time himself.
00:53The eccentric auto executive launched the DeLorean Motor Company with bold promises
00:57and a $200 million war chest, aiming to disrupt what he saw as a stagnant industry.
01:01Last year at the Geneva Motor Show, Mr. DeLorean was already answering critics.
01:06Every cent we got from the British government was spent in England in addition to $20 million
01:11we raised in the United States, so that when you put that all together,
01:15we actually contributed to the British economy much more than we took out of it.
01:19But it wasn't long before his ambition outpaced his execution.
01:22Production delays, ballooning costs, and underwhelming reviews of the DMC-12 signal trouble.
01:27The allegations are that there could have been an abuse of, and continue to be an abuse of,
01:33and misuse of public funds.
01:34By any specific person?
01:36Not by any specific person. The allegations relate to the company as a whole,
01:40although inevitably the senior executives and directors of the company must be held responsible
01:45for any such alleged abuse or misuse of public resources and funds.
01:51His decision to base manufacturing in Northern Ireland during the height of the troubles only made
01:55things worse. When the company went belly up, DeLorean's fate was sealed by a sensational
01:59cocaine trafficking charge in 1982, a desperate move he claimed to save his dying dream.
02:04Finally, this week, the end. The closing of the company, the arrest on drug charges.
02:10Ironically, it is now, during DeLorean's nightmare, that his dream may finally come true.
02:15In the last two days, DeLorean's sales have boomed and prices have jumped,
02:19spurred by hopes that the car will be a collector's item.
02:2219. Albert Dunlap – Sunbeam Products
02:45Sunbeam Products had already weathered a rough collapse in the late 1980s,
02:49capped by bankruptcy and a hostile takeover.
02:51By the mid-90s, it looked like the worst was behind them, until Chainsaw AI revved his engine.
02:55Hired in 1996 to revive the company, CEO Albert Dunlap, infamous for gutting workforces
03:01to goose short-term profits, promised a rapid turnaround.
03:04And if someone like me had not come in, 100% of the people would have lost their job,
03:08and I think that is not corporate responsibility.
03:11For all of us people to lose the jobs and for the corporation to go under.
03:14That's right. I think it's much more important that someone comes in,
03:18makes the tough decisions. I didn't create the problem. I inherited the problem. I fixed the problem.
03:23But when barbecue grill sales inexplicably spiked in late 1997, shareholders took notice. The truth,
03:29Dunlap had massively oversold to retailers, booking phony revenue to prop up the stock.
03:33When the fraud unraveled, Sunbeam took a $60 million hit.
03:36Dunlap was fired and the company once again slid into bankruptcy, this time with his fingerprints all
03:41over the crime scene.
03:42Do you buy the argument that employees are assets for a corporation?
03:45Of course employees are assets, but they're assets in a different fashion than shareholders.
03:50Again, the shareholders own the corporation. They take all the risks. You pay the employees every day,
03:56and the chief executives who don't watch out for shareholder value ultimately cause the whole
04:01corporation to fail.
04:02Number 18, Mitch Lowe, MoviePass.
04:05Movie theater subscription service MoviePass is hoping to provide a big jolt to the Hollywood box
04:11office. With MoviePass, moviegoers can see a movie a day for $10 a month, excluding IMAX and 3D screens.
04:17Joining us now, the founder and CEO of MoviePass, Mitch Lowe, a co-founder of Netflix and former
04:23president of Redbox.
04:24Stop us if this pitch sounds too good to be true. For a flat monthly fee, MoviePass subscribers could
04:29see as many movies in theaters as they wanted. No catch, no blackout dates, just unlimited access.
04:34And for a brief moment, that fantasy became reality.
04:36You lose money when I see one movie. How does this business model work out for you in the end?
04:41I always find it interesting to get that question because, you know, Netflix has to borrow billions
04:48of dollars a year to stay in business to create the content that they don't earn enough money to pay for.
04:54But behind the scenes, CEO Mitch Lowe is bleeding the company dry, chasing growth at any and all costs
04:59and ignoring basic financial logic. As losses piled up, prices fluctuated wildly,
05:04and Lowe resorted to desperate tactics, like secretly resetting user passwords and
05:08blacking out popular titles like Mission Impossible Fallout to stem the bleeding.
05:11The deception didn't save the company. MoviePass collapsed, dragging parent firm Helios and
05:16Matheson Analytics into, you guessed it, bankruptcy.
05:19And you have since reacquired the company and plan to relaunch the service.
05:22We relaunched.
05:23You've already relaunched. So give us a sense of people can start going now.
05:27Yeah, it's live. And we ended 2023 profitable, the first time in the history of the company.
05:33Number 17, Angelo Mozilla, Countrywide Financial.
05:36Federal regulators yesterday charged Mozilla and two former deputies with fraud. They say Mozilla dumped
05:43nearly $140 million in countrywide stock using inside information about the dangers the company
05:49faced by underwriting high-risk mortgages. At first, the rise of Angelo Mozilla in
05:53Countrywide Financial reads like a classic American success story. Founded in 1969 by Mozilla and his
05:59mentor David Loeb, the mortgage lender grew from modest roots into a financial behemoth. But the next
06:03chapter is all too familiar.
06:05While hiding their own hand from investors, Mozilla was actively taking his own chips off the table.
06:12We allege that Mozilla engaged in insider trading by establishing four stock sales plans while he
06:18was aware of the company's increasing credit risk and the expected poor performance of countrywide
06:24originated loans. After once denouncing subprime lenders as crooks, Mozilla led Countrywide straight into
06:30the heart of the housing bubble, embracing risky loans and deceptive practices that would trigger
06:34the 2008 financial crisis. Take us back a little bit, walk us through this. What exactly was Mr. Mozilla
06:40accused of? He was accused of misleading countrywide investors about the kind of mortgages the company
06:47had been issuing over the last couple of years, from about early 2005 to the middle of 2007.
06:55When the dust settled, Mozilla was branded the face of predatory lending. Countrywide collapsed and was
06:59offloaded to Bank of America, saddled with toxic debt and scandal. Mozilla, meanwhile,
07:04faced charges of insider trading and securities fraud and became a lasting symbol of Wall Street greed
07:09run amok. The SEC said he told investors that the mortgages they were issuing were all proper and
07:17there was no significant risk to them. In fact, the SEC said they were letting their underwriting standards
07:24sly to met any competitor just in order to be able to sell every market onto the secondary market.
07:31Number 16, Ron Johnson, JCPenney. Johnson, a former Apple executive, has been under pressure
07:36for failing to turn around the fortunes of the struggling retailer. JCPenney sales dropped 25%
07:43in Johnson's first year at the helm. By the early 2010s, JCPenney was already in trouble,
07:47and a 2011 scandal involving manipulated Google search results didn't help. Enter Ron Johnson, the retail
07:52mastermind behind Apple s wildly successful stores, hired a CEO to stage a turnaround.
07:57Expectations were high, but what worked in Silicon Valley didn't translate to the department store
08:01floor. Johnson scrapped coupons and longstanding promotions in favor of sleek branding and everyday
08:20low pricing, a move that alienated loyal customers almost overnight. Rather than course correct,
08:25Johnson plugged his ears and doubled down, blaming shoppers for not getting it. Sales plummeted,
08:29losses mounted, and by 2013, the board had seen enough. Johnson was out, and JCPenney was left in
08:34even worse shape than he found it. JCPenney, fixable, no matter who's the CEO. What's your sense on that?
08:41You know, Susie, I think that it is fixable. I think the big question is how and how long it will take.
08:47Number 15, Dennis Kozlowski, Tyco. In my wildest imagination, when I would project myself into my
08:54late 50s and early 60s, where I would be or what I would be doing, if I make a list of 100 different
08:59places or 100 different things, here would never make that list. He now earns a dollar a day mopping
09:04floors and slinging hash to his fellow inmates. Unfortunately for this security systems manufacturer,
09:11the call really was coming from inside the house. CEO Dennis Kozlowski, who took the reins in 1992,
09:16appeared to be steering Tyco toward prosperity, orchestrating high-profile acquisitions and
09:20building reputation for trust and reliability. What's it like to earn that kind of money?
09:24It's a way of keeping score, I guess. Keeping score meant keeping up with the masters of the universe,
09:3130 million dollars to build a mansion in Boca Raton, acquiring homes in Nantucket and Colorado,
09:39and just loose-changed 16 million dollars for Endeavor, a vintage yard.
09:44But behind the boardroom doors, Kozlowski was treating the company like his personal ATM. He used
09:49corporate funds to finance a wildly extravagant lifestyle, including a two million dollar birthday
09:54party for his wife and millions more in unauthorized bonuses and forgiven loans, totaling roughly 150
09:59million dollars in all. In 2005, he was sentenced to prison for fraud and Tyco's credibility was left in
10:04tatters. The company never fully recovered, ultimately merging with Johnson Controls in 2016.
10:10This week, manufacturers Johnson Controls and Tyco announced a mega-merger. They say the deal will
10:15speed up innovation in the field of smart technology. Johnson Controls makes ventilation systems,
10:19car batteries, and auto-seeding. Meanwhile, Tyco makes fire suppression systems. Together,
10:24they're worth about 36 billion dollars.
10:27Number 14, Eddie Lampert Sears
10:29That's right, for the better part of a decade, Eddie Lampert's name has been inextricably tied
10:34with Sears. But at this stage, it's really unclear whether his hedge fund ESL investments generated
10:40returns or losses from this very long investment. Touting himself as a visionary, Chief Executive and
10:46Chairman Lampert sold Sears to Kmart in 2005 and set out to reinvent the company. And not through
10:51revitalized stores or improved customer service, but aggressive cost-cutting and financial engineering.
10:56He slashed budgets, pitted departments against each other, and sold off valuable assets like
11:01Craftsman and Land's End, often to entities that were controlled by none other than Eddie Lampert.
11:05At first glance, it appears as though a bankrupt Sears would be detrimental for Lampert.
11:10He personally holds a 31 percent stake, his hedge fund owns an additional 18.9 percent,
11:16and he owns a significant amount of Sears debt, not to mention the reputational damage that comes from
11:22overseeing a master plan that disintegrated over the course of a decade.
11:26As stores crumbled and customers fled, Lampert was accused by Sears creditors of
11:30intentionally stripping the company for parts. By the time Sears filed for bankruptcy in 2018,
11:34the only thing Lampert had successfully preserved was his own stake in the wreckage.
11:38We just don't know exactly how much cash money was put up to buy, came on out of bankruptcy,
11:43then it was the Sears transaction. I actually think that it was going in this direction no matter
11:49what. It was a bad capital structure for a company though with a lot of bad locations.
11:53Number 13, Sam Bankman-Fried FTX.
11:56A lot of people look at you and see Bernie Madoff.
11:59Yeah. I mean, I don't think that's who I am at all, but I understand why they're saying that.
12:06People lost money and people lost a lot of money. And I mean, at the end of the day,
12:14look, there's a question of what happened and why.
12:17For a while, Sam Bankman-Fried looked like crypto's golden boy, a disheveled genius who promised to tame the
12:22digital finance frontier. His cryptocurrency exchange FTX exploded in popularity thanks
12:27to sleek marketing and celebrity endorsements. But behind the scenes, Bankman-Fried was orchestrating
12:31one of the largest ever financial frauds. FTX deposits were used to pay Alameda's creditors.
12:38Carolyn Ellison said you knew about that. Is that true?
12:41You know, best I can tell, Alameda did have a big position open on FTX. That position,
12:48uh, I think, was, you know, very over-collateralized.
12:53He quietly funneled billions in customer funds to his hedge fund, Alameda Research,
12:57and then used the money to make risky bets, buy real estate, and donate to political campaigns.
13:02When the House of Cards collapsed in 2022, over $8 billion had vanished. Found guilty
13:06on seven counts of fraud and conspiracy, Bankman-Fried was sentenced to 25 years in prison.
13:11What we know right now is that a sentence of 25 years has been handed down by the judge,
13:15including some years of supervisory release, three to be sure. And part of what the judge said
13:20amounted to that sentence was losses, he said, that totaled more than $11 billion.
13:25Number 12, Elizabeth Holmes, Theranos.
13:27This Theranos blood test put my cholesterol at 170. My own doctor found it to be 169 just the week
13:34before. Holmes says she wants to make this sort of testing available anywhere, anytime.
13:39There's no reason why these can't be distributed in very, very decentralized locations.
13:47Your home?
13:48Yeah.
13:48Clad in a black turtleneck and channeling Steve Jobs, the Theranos founder captivated
13:53investors and the media with a machine she claimed could run hundreds of sophisticated
13:57tests from a finger prick. There was just one problem, it didn't work. Like, at all. Holmes built
14:01Theranos into a $9 billion illusion propped up by manipulated data, aggressive secrecy, and flat-out lies.
14:07I'm not the lab director. I know, but you're the CEO and founder of the company. I mean,
14:12this is as serious as it gets. What I know is that I've put the best people in place to be able to
14:20investigate every aspect of this and ensure that we meet the quality standards that we hold ourselves
14:25to. And I know they're doing that. At one point, she even used commercial lab equipment while passing
14:30off the results as Theranos made. When whistleblowers and journalists exposed the truth, the company
14:34collapsed. Holmes was convicted of fraud in 2022 and sentenced to just over 11 years in prison.
14:38A spectacular fall for a woman once hailed as the next great Silicon Valley visionary.
14:43Well, she is one of 655 inmates at this so-called club fed about 100 miles outside of Houston,
14:50where she grew up. She'll have absolutely no privacy. She'll be wearing a khaki uniform.
14:56She will spend her first 90 days working in the kitchen, as we mentioned, making 12 to 40 cents an
15:01hour. After that, she will work as a groundskeeper or a janitor at the facility.
15:06Number 11. Richard S. Fold, Jr., Lehman Brothers
15:09We could not stem the tide of the uncontrollable, and that's why I talked about it, of the
15:14uncontrollable market forces and the false rumors that swirled around the firm.
15:20As longtime CEO of the esteemed financial services firm,
15:24Fold had a front-row seat to the subprime mortgage boom and couldn't resist going all-in.
15:28Under his leadership, Lehman became addicted to risky mortgage-backed securities and toxic assets,
15:33even as red flags mounted across the industry. Fold dismissed the warnings, doubled down on
15:38leverage, and refused to sell or merge when lifelines were still on the table.
15:41Lehman Brothers is going bankrupt, and financial markets from Asia to Europe are doing their
15:47utmost to prevent Monday from turning from dark to black. Employees of America's fourth-largest
15:53investment bank saw the writing on the wall late Sunday, after talks to pull them back from the
15:58abyss collapsed. When the bubble burst, Lehman imploded with $600 billion in assets, the largest
16:04bankruptcy in U.S. history, which sent global markets into a tailspin and helped ignite the
16:08Great Recession. Fold walked away disgraced, his legacy forever tied to one of the most avoidable
16:13collapses in Wall Street history. I don't see why you thought he was contrite. I thought he was
16:18shameless. I thought it was appalling. He blamed everyone. He blamed, as you say, naked short sellers
16:23over and over in case we didn't get the point, when in fact hedge funds like Harbinger had money
16:28locked up in Lehman and was shorting it to try and make the most of the money that they already had.
16:32He blamed everybody but himself. Number 10, Gerald Ratner, Ratner Group.
16:37We sell gifts as well as jewelry. Things like a teapot for two quid. Or we've got this imitation
16:44book that you lay on your coffee table. Pages don't actually open, but they're beautiful curled
16:50up corners with imitation antique dust. Gerald Ratner grew his family's modest jewelry brand
16:55into an empire on the philosophy that the loudest voice commands the most business. He learned the
17:00hard way that it's sometimes best to shut up. While speaking at a convention in 1991, the Ratner Group's
17:04CEO joked about his company's cost-effective mass production. He said the jewelry is so affordable
17:09because it's total crap. His company's stock plummeted as insulted customers lost faith in
17:20the quality of Ratner products. The company won them back after the CEO's resignation and a rebrand.
17:25Today's Signet Jewelers is one of the biggest names in the industry. As for their old one,
17:29the consequence of a business rep getting too candid is called the Ratner Effect.
17:33It was only when you read the tabloids the next day that it did look terrible. But I mean,
17:38as I left the Albert Hall, I didn't think anything was untoward. And I don't blame the press because
17:45the press, you know, always do that. They're disingenuous and, you know, good luck to them.
17:49That's what people want to read about. You know, they want a story that's exaggerated somewhat.
17:54Number nine, Ike Batista, OGX Petrolio.
17:57I think one of the reasons of our success is that all our projects, they start from the beginning
18:04by sharing. See, when you develop billion dollar projects, new businessmen developing projects
18:11should take care of the surrounding environment because I will affect several communities.
18:16Energy industrialist Ike Batista quickly went from being one of the world's richest men to a
18:20negative network. As hard as his companies were hit by his gambles, OGX Petrolio was particularly
18:25devastated. Batista got lucky when the company discovered major crude oil reserves. The parent
18:30company, EBX Group, spent the next few years driving Brazil's infrastructure and energy before
18:34finally going bust in 2012. Thousands of jobs would come to this area of Rio de Janeiro,
18:40and this whole area around me was to be developed into a new massive business park. But with so much
18:46uncertainty about the empire, indeed about Ike Batista's own personal wealth, many of the big assets
18:53are now being sold off, including the port here at ASU.
18:56Batista over-promised, under-delivered, and over-spent on other ventures and an extravagant
19:00lifestyle. OGX then filed for the biggest bankruptcy in the history of Latin America.
19:05Under new leadership, it rebranded as Domo Energia in 2017 and was sold to Petro Rio in 2022.
19:11Meanwhile, the ever-reckless Batista was sentenced to 30 years in prison for corruption.
19:15Brazilian oil and mining magnate Ike Batista has left prison for house arrest ahead of a trial on
19:21corruption charges. He's accused of bribery and hiding illegal funds offshore, but denies any
19:26wrongdoing. He was arrested last year after spending four days in New York as a fugitive.
19:31Number eight, Martin Shkreli, touring pharmaceuticals.
19:34Now, you guys have said that the reason you increased this price so much after acquiring the
19:38drug was in order to do the research and development to develop a better version of Daraprim. I just got
19:43off the phone with an HIV doctor who told me they don't need a better version of this drug. What are
19:47you doing here? Yeah, that's not true. There's a recent paper that suggests that two patients died
19:54due to autoimmune encephalitis from toxoplasmosis. Touring pharmaceuticals broke out in 2015 with
20:00several major manufacturing licenses. Then, Martin Shkreli raised the price for Daraprim, an anti-parasitic
20:06used to treat HIV, from $13.50 per pill to $750.00. This reprehensible price hike made
20:12the so-called pharma bro a pariah. The company's reputation was further damaged by his callous
20:17social media presence and dubious pledges to make treatment more affordable.
20:20What do you say to that single pregnant woman who might have AIDS, no income?
20:29She needs Daraprim in order to survive. What do you say to her when she has to make that choice?
20:35What do you say to her? On the advice of counsel, I invoke my Fifth Amendment,
20:39privilege against self-incrimination, and respectfully decline to answer your question.
20:43Shkreli claims the controversy prompted investigations into a potential Ponzi scheme
20:47and misappropriation of funds for his company Retrophin. He was ultimately convicted on securities
20:52fraud and conspiracy in 2017. Touring maintained ties after rebranding as Vieira Pharmaceuticals that
20:57year. But with Shkreli's audacity leaving the company in a financial and legal mess,
21:02Vieira filed for bankruptcy in 2023.
21:04To sort of engage in that kind of conduct while you're in a criminal trial is a bad idea,
21:11because once you get to sentencing, you basically have an audience of one, the judge.
21:16And the judge is going to be looking at him and trying to evaluate what kind of person he is.
21:20Number seven, John Merriweather, Long-Term Capital Management.
21:23John Merriweather is best known or rather notoriously known for his hedge fund long-term capital,
21:29which back in 1998 lost more than 90% of its assets. They were valued at about $4.8 billion,
21:37and this all took place in the weeks following Russia's currency devaluation and bond default.
21:42Scientific strategy and secrecy made long-term capital management an anomaly on Wall Street.
21:47For all of John Merriweather's brilliance, his leadership methods were not a long-term investment.
21:51His hedge fund saw three years of unrivaled profit before taking a hit from the 1997 financial crisis in
21:57Asia. After Russia defaulted on its debts the following year, LTCM lost billions in months.
22:03And turns out that his next venture after that, JWM Partners, is not faring much better. That's
22:09according to people familiar with the matter, although the decline there did play out over
22:14months. Its main fund lost 44% from September 2007 to February 2009.
22:20The decision to publicize some closely guarded trading methods further shook potential investors'
22:25faith. The next closed-door deal was for a bailout, but LTCM dissolved in 2000.
22:29Experts blame Merriweather's very foundation of a fund that trusted the numbers and subverted trends,
22:34thus alienating potential partners. It would unfortunately not be the last time market
22:39volatility bested Merriweather's rationalist strategies.
22:42Bloomberg News has learned that JWM Partners is shutting down its relative value opportunity
22:48second fund. Now, the fund lost 44% of its value from September of 2007 to February of this year.
22:54Since the fund opened in 1999, it has returned an average of less than 1.5% a year.
23:01Number 6, Adam Neumann, WeWork. The young CEOs of today are afraid of going public.
23:06I think two things change. One, there's never been access to private capital like this.
23:10So I'm not sure if we would see some of the largest companies in the world today,
23:13if they were starting today, I'm not sure you would see them going public as soon as they did.
23:16They had no other choice. The workspace design company,
23:19WeWork, was ironically felled by unprofessional leadership. Publicly, CEO Adam Neumann's eccentric
23:24image and excessive office culture undermined the company's credibility. Privately,
23:28he overindulged in illicit substances. He also directly manipulated business ties to
23:32serve his personal life and lofty ambitions for WeWork.
23:35Most companies in the world run their company with quarterly earning reports. And when I'm going
23:39to make a decision, this is true about life and true about a business. When I'm going to make a
23:43decision based on three months forward, I'm not going to make the right decision.
23:46Massey is very famous for making a 300-year plan. If you want to start thinking forward,
23:50you really have to think really far away.
23:52Finally, in 2019, controversy over the business model and Neumann himself prompted him to delay the
23:57IPO launch. The CEO then voted himself out as the company became a laughing stock.
24:02WeWork is now considered a cautionary tale about giving too much power and agency to the head of
24:06an office. Even after COVID-19's impact on workspaces led to bankruptcy in 2023,
24:11WeWork continues to reject Neumann's efforts to buy it back.
24:14Remarkable to see Adam Neumann back at the table, of course, has the backing.
24:19His firm, Flo, has the backing of Andreessen Horowitz, who put in $350 million into that.
24:25And now it appears that he's teaming up with Dan Loeb as well.
24:28So far, it appears that the advisors to WeWork are giving him the Heisman.
24:34We will see whether now that some of this is public, whether that changes.
24:37Number five, Aubrey McClendon, Chesapeake Energy.
24:40Community and the land we love. The work we do every day matters. It's not a question,
24:47it's a fact. We're raising the bar and fueling lives all around us. The future and opportunity
24:53for our country starts with our drill bit. Innovations like fracking turned Chesapeake
24:59Energy into one of America's most powerful natural gas companies going into the 2010s.
25:03But CEO Aubrey McClendon's own prosperity was partly based on financial creativity.
25:08In 2012, it came out that he was financing operations with personal loans from his company's
25:12own lenders. After his dismissal, McClendon was sued by his old company for selling data,
25:17then investigated for market manipulation.
25:19Aubrey McClendon, one of the best known architects of the U.S. shale boom,
25:24indicted by a federal grand jury Tuesday on conspiracy charges linked to rigging the price of oil and gas
25:30leases in Oklahoma. Mr. McClendon is the only person named in the indictment for activities
25:34which date from 2007 through 2012 when he was chief executive of Chesapeake Energy Corporation.
25:41Forbes wasn't kidding when it dubbed him America's most reckless billionaire.
25:44Before these revelations, McClendon's schemes and downfall severely damaged Chesapeake's value.
25:49They experienced years of financial volatility before rebranding as Expand Energy Corporation
25:54following a merger in 2024. The day after he was indicted in 2016, McClendon died in a car wreck.
26:00Yeah, police telling us that he was northbound here on Midwest Boulevard. You could actually see
26:04the tire marks that lead right into the crash site. You can see the blackened out area from the fire,
26:10and you can also see a memorial there starting to form.
26:14Once firefighters put out the fire, they found a mangled 2013 Chevy Tahoe and the driver, Aubrey McClendon,
26:21dead. Number 4. Mike Lazaridis, Research in Motion.
26:43Mike Lazaridis and initial partner Doug Fregan essentially reinvented the cell phone with the
26:48multi-purpose device Blackberry. Unfortunately, he was less smart about business. That is where
26:53Research in Motion co-CEO Jim Balsillie came in, but he too downplayed the introduction of the iPhone
26:58in 2007. Despite the Blackberry's superior engineering, other smartphones marketing and
27:03technical innovations convinced RIM to adapt. It was too late, and the two CEOs resigned shortly
27:27before the company was renamed Blackberry Limited in 2013. They would both become cautionary figures
27:32for failing to recognize market trajectory. However, Balsillie and Lazaridis himself later
27:37acknowledged that it was the latter who fought the principles of restructuring. The struggling
27:41Blackberry Limited discontinued its namesake product in 2022.
27:45This isn't a shock because they let everyone know in 2020 that this was coming. In 2022,
27:51these services were going to be shut down. So things like texting won't work, data won't work,
27:57you can't call 911. Nothing will reliably still be working on these phones. So we're going to have to
28:02put them to bed and have little funerals for our Blackberries if you're still using them.
28:06Number 3. Frank Lorenzo, Eastern Airlines.
28:08Eastern's management has made preparations that if there isn't an agreement and if there is a strike,
28:14has made preparations to be able to operate the airline in that event. But naturally,
28:20the company needs to have its pilots, needs to have its flight attendants,
28:24needs to have its non-contract employees come to work.
28:28An industry staple for almost seven decades, Eastern Airlines struggled to adapt to that
28:32industry's deregulation in the 80s. Powerhouse manager Frank Lorenzo of Texas Air was poised to
28:37revive the company. The first order of business was a labor dispute, which Lorenzo actually made
28:41worse with harsh policies and deals. Pilots and flight attendants joined the labor strike and the
28:46FAA issued a massive fine over safety violations.
28:48Ultimate stability and no furloughs, etc. is profitability and a vibrant company.
28:55That's the only ultimate guarantee, because as we all know, there ain't no Santa Claus.
29:00Three years ago, when we proudly announced the acquisition of Eastern Airlines
29:06at a press conference, I never believed that we'd be here today.
29:10By 1991, Eastern was completely out of money. Lorenzo's folly would go down as a tragedy of
29:15aggressive management. The punchline is that he bounced back after selling off
29:18Eastern's assets to his other companies. Revivals of the airline have since failed
29:22to get off the ground.
29:23Official word from Eastern Airlines' public relations wire is that the airline will
29:29officially discontinue all scheduled operations beginning at midnight tonight.
29:33Number 2. Nick Leeson, Barings Bank
29:36It took Barings Bank 233 years to become one of the world's leading merchant banks.
29:40It took Nick Leeson three years to tear it down.
29:43The derivatives trader was transferred to the company's Singapore office after he was denied
29:47a UK broker's license for failing to report a legal issue on his application.
29:51In 1992, he invested Barings' own money in futures without authorization,
29:55hiding shortfalls in an error account. Finally, the 1995 Kobe earthquake destabilized Asian markets
30:01and led to the discovery of Leeson's no longer lucrative corruption. He ultimately cost Barings
30:06almost £1 billion, before the ING group bought the company in 1995 for a single quid.
30:12Meanwhile, Leeson got four years in prison, his banking career killed alongside his centuries
30:16old financial institution.
30:17I hate to use the word business advice, you know. Unfortunately, I'll be remembered for
30:22the loss of £862 million and the collapse of Barings Bank. So, you know, trying to give business
30:28advice is a little bit fraudulent as far as I'm concerned.
30:31Before we continue, be sure to subscribe to our channel and ring the bell to get notified about
30:36our latest videos. You have the option to be notified for occasional videos or all of them.
30:41If you're on your phone, make sure you go into your settings and switch on notifications.
30:45Number one, Bernard Ebers, WorldCom.
30:50Global network access? Good. Massive security breach? Bad. Preventing the former from becoming
30:59the latter. WorldCom. Want confidence? You'll find the path very clearly marked. WorldCom.
31:06The leader in globally managed VPN solutions on the world's most scalable global IP network.
31:12Telecom cowboy Bernard Ebers' company was one of the biggest in its industry. It turns out this
31:17was not accomplished honestly. WorldCom filed for bankruptcy in 2002 after Cynthia Cooper's
31:22internal audit revealed extensive accounting fraud to bolster the company's stock. Up to $11 billion
31:28in overstatements were ultimately reported. Ebers ousted his fellow executives, but investigations
31:33and convictions framed him as the mastermind. The Wall Street Journal is reporting that
31:37telecommunications giant WorldCom may declare bankruptcy tonight. The company's board of
31:43directors has been meeting all day. It would be the biggest bankruptcy filing in history. The
31:49company is more than $30 billion in debt and is reeling from an accounting scandal. He had already
31:56fallen out of favor with the company over his lack of strategy following a failed merger with Sprint.
32:00The disgraced, financially devastated WorldCom would eventually be sold to Verizon in 2006 under the name
32:05MCI Inc. And in the years since his downfall, the once-renowned Ebers is synonymous with
32:10executive incompetence and corruption. The former bouncer has withered to 160 pounds,
32:15these court filings say, and 13 years into his sentence, his daughter is appealing for his release.
32:20Joy Ebers Born telling the court that it is evident to her that her dad's days on earth are short and
32:26she fears he may only have weeks to live. What are some other memorable company catastrophes
32:31based on human error? Drop a tip in the comments.
32:34I believe we made poor judgments and timing for the assets that we bought and for the businesses
32:42that we supported. Would I love today be able to reach back and take those? Yes.
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