Corporate Scandals Trivia Quiz

Answer: ImClone

The alleged insider-trading tips came prior to the Food and Drug Administration's public announcement that it would be rejecting ImClone's application for the drug Erbitux. Waksal was sentenced to 87 months in prison.

Answer: WorldCom

WorldCom also reported giving founder Bernard Ebbers US$400 million in off-the-books loans. Nice work if you can get it... and don't mind risking criminal charges.

Answer: pharmaceuticals

Pan Pharmaceuticals was the largest supplier of herbal remedies and diet supplements in Australia, and the recall is one of the largest in the history of medical products. Untested ingredients and machinery going uncleaned between jobs contributed to the recall.

Answer: pension

Robert Maxwell was a publisher and a member of the British Parliment. In 1969, he was forced to surrender control of his company, Pergamon, due to a finacial scandal. After his death in 1991 investigators found he'd been secretly diverting funds from employee pension funds to keep the Mirror Group solvent. Pensioners collectively lost millions and the company filed for bankruptcy protection.

Answer: Kmart

The company survived the scandal, and in 2005 purchased Sears for $11 billion, although this heralded a steady decline over the next decade.

Just on the chance that any quiz takers think investing in bankrupt firms like Kmart is a good idea (on the theory that the stock is sure to rise), they should be aware that it is common practice for such firms to cancel old stock after reorganizing. Such an investment is risky, to put it mildly.

Answer: Securities and Exchange Commission

The SEC was established by the US Congress in 1934 in reaction to the 1929 stock market crash. Its first chairman was Joseph P. Kennedy, John F. Kennedy's father.

Answer: Dick Cheney

In July 2002, a legal watchdog group called Judicial Watch filed an accounting fraud lawsuit against Halliburton and Cheney, amongst others. "The shareholder lawsuit alleges that Halliburton, a Dallas-based provider of products and services to the petroleum and energy industries, overstated its revenue by $445 million from 1999 to the end of 2001." - Fort Worth Star-Telegram.

Answer: Tyco International

Tyco International Ltd. is a manufacturing conglomerate incorporated in Bermuda. In 2002 it disclosed the discovery of "tens of millions of dollars in fraudulent bonuses and revealed it picked up the tab for personal expenses including a $6,000 shower curtain and a $2,200 wastebasket for indicted former Chairman L. Dennis Kozlowski's New York City apartment." -- Reuters.

Answer: Union Pacific Railroad

The construction company was the Crédit Mobilier of America, not to be confused with the French bank that was involved in a different 19th century scandal. By the time Durant and his accomplices were done "they'd cleared at least $23 million (and perhaps considerably more), and the U.P. was on the verge of bankruptcy. Everyone who had invested in the railroad but not the construction company found themselves with nearly worthless securities on their hands."-- James Surowiecki, financial columnist for "New Yorker" magazine.

Answer: Houston

Enron collapsed after a financial accounting scandal in December 2001. At the time it was the biggest bankruptcy filing in U.S. history. It was soon eclipsed by the failure of WorldCom.