- 7 months ago
Greed, fraud, and catastrophic leadership at its worst! Join us as we examine the executives who destroyed companies, defrauded investors, and caused widespread harm through their actions. Our countdown includes the architects of financial collapses, environmental disasters, and spectacular corporate frauds that shocked the business world. Which fallen executive do you think caused the most damage?
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00:00Martin Shkreli apologized to investors and admitted he'd made mistakes as he sobbed and pleaded for leniency.
00:07Welcome to WatchMojo, and today we're counting down our picks for the CEOs whose leadership failures caused serious, well-documented harm and permanently destroyed their reputations.
00:15We're focusing on executives whose decisions had large-scale impact and earned clear blame from courts, regulators, or the public.
00:21That means we're leaving out CEOs who are simply controversial or unpopular, but whose companies continue to succeed or whose legacies remain divided.
00:28Cooking the books to the tune of $11 billion, Bernie Ebers was convicted on nine felony counts in 2005.
00:36Number 10, Adam Neumann, WeWork.
00:38Even though WeWork is 50 square foot per person, a third of all WeWork spaces are actually open common spaces that give access to everybody that we don't measure as seats.
00:47So there's a lot more room there.
00:49So the way we do it is people think that WeWork is all open.
00:52It's not true.
00:5390% of WeWork space is actually office.
00:5510% is only open space.
00:57But we create a lot of common space for everybody.
01:00Few corporate leaders managed to blend messianic ambition with financial recklessness quite like Adam Neumann, the charismatic co-founder of WeWork.
01:06He cultivated an image of a visionary leader, building a co-working space empire that promised to elevate the world's consciousness.
01:12While racking up staggering losses at an astonishing rate.
01:15There was an interesting piece in the New York Times over the weekend titled, Adam Neumann and the Art of Failing Up.
01:20The report detailed how Adam Neumann was able to create and build WeWork, fail spectacularly at an attempt to go public, and still walk away with a potential billion dollar payday.
01:30It cites his ability to read people, his persuasive charisma, and his taste for risk.
01:36Details emerged of Neumann selling the trademark rights to We back to WeWork for nearly $6 million, purchasing properties, then leasing them back to the company, and even flying private jets with investors' money while laying off employees.
01:47The planned 2019 IPO, which was supposed to be a crowning achievement, instead exposed the company's unsustainable business model, leading to a dramatic valuation plunge from $47 billion to under $10 billion.
01:58What would it take for Mark to buy this IPO?
02:00Oh, I'm not buying it. No way.
02:02So, I've got an issue with the business model in general, right?
02:05So, you've got a company that's signing all of these long-term leases, and then they're subleasing to little, you know, small businesses, maybe one-employee kind of companies, on very short-term leases.
02:18Number nine, Tony Hayward, BP.
02:20I'm sorry. We're sorry for the massive disruption it's caused to their lives.
02:26And, you know, we'reāthere's no one who wants this thing over more than I do.
02:29You know, I'd like my life back.
02:30Life here may never be the same. The water and all that lives in and around it could be harmed for years.
02:38The catastrophic Deepwater Horizon oil spill wasn't just an environmental disaster.
02:42For BP CEO Tony Hayward, it became a personal public relations inferno.
02:46The explosion on the offshore drilling rig in 2010 killed 11 workers and unleashed the largest marine oil spill in history,
02:52spewing millions of barrels of crude into the Gulf of Mexico, devastating ecosystems and livelihoods.
02:56As the catastrophe unfolded, Hayward's handling of the crisis was nothing short of a public relations nightmare.
03:02It's not just Hayward's reputation that's taken a hit, so has his personal fortune.
03:07Hayward's 623,000 shares of BP were worth almost $38 million.
03:12His infamous plea for his life back, uttered just weeks after the spill began,
03:16exemplified his apparent detachment from the immense suffering and environmental ruin his company had caused.
03:21Hayward was criticized for downplaying the spill's impact, for perceived arrogance during congressional hearings,
03:26and for a general inability to convey genuine empathy.
03:29How do you feel about this imminent change?
03:32Is it too late in coming for you?
03:34Well, he had to go.
03:36He was the leader of this company.
03:40He was the one that allowed the company to run up the worst safety record of any oil company in the world.
03:47Number 8.
03:48Travis Kalanick, Uber.
03:49Travis Kalanick, founder and CEO of ride-sharing giant Uber, suddenly resigning late Tuesday after intense pressure from five major investors.
03:58In a statement, Kalanick said,
04:00I have accepted the investors' request to step aside so that Uber can go back to building rather than be distracted with another fight.
04:07Revolutionizing an industry often requires an uncompromising vision.
04:09But for Uber co-founder and former CEO Travis Kalanick, that drive came at an immense ethical cost.
04:15Under Kalanick's tenure, Uber was embroiled in scandal after scandal.
04:18Allegations of sexual harassment and discrimination, a culture described as bro-like and cutthroat,
04:23the use of grayball software to evade regulators, and even alleged attempts to steal trade secrets from competitors.
04:28It is day two of the Uber v. Waymo trial, and controversial Uber founder and former CEO Travis Kalanick took the stand.
04:35Kalanick is the most anticipated witness at this trial, which is set to last three weeks,
04:40and Waymo went after him over the technology at the center of this case.
04:44His personal conduct, including a heated argument with an Uber driver caught on video,
04:48further eroded public trust.
04:50His pileup of ethical breaches, among other factors, culminated in crushing board and investor pressure.
04:55And Kalanick's eventual forced resignation in 2017.
04:58It is not clear at this point who will take over.
05:01Kalanick will remain on the board of directors.
05:04We reached out to Uber tonight, but have not heard back yet.
05:07Number seven, Dennis Kozlowski, Tyco.
05:10In my wildest imagination, when I would project myself into my late 50s and early 60s,
05:15where I would be or what I would be doing,
05:17if I make a list of a hundred different places or a hundred different things,
05:21here we'd never make that list.
05:22He now earns a dollar a day, mopping floors and slinging hash to his fellow inmates.
05:28Prepare for a tale of corporate larceny so extravagant it almost reads like fiction,
05:32starring Dennis Kozlowski.
05:33The former CEO of Tyco International, Kozlowski epitomized the era of excessive corporate spending
05:38and blatant self-enrichment at shareholder expense.
05:41His opulent lifestyle, funded directly by company coffers, became legendary.
05:45What's it like to earn that kind of money?
05:46It's a way of keeping score, I guess.
05:49Keeping score meant keeping up with the masters of the universe.
05:52$30 million to build a mansion in Boca Raton, acquiring homes in Nantucket and Colorado,
06:01and just loose change $16 million for Endeavor, a vintage yard.
06:06Among the most infamous expenses were a $2 million birthday gift for his wife on the Italian island of Sardinia,
06:12complete with a gladiator ice sculpture all paid for with Tyco funds.
06:15His spectacular fall from grace, culminating in a 2005 conviction for grand larceny, conspiracy,
06:20and securities fraud, cemented his status as a man whose avarice knew no bounds.
06:24Would Dennis Kozlowski a few years ago even contemplate going to Europe with my old master paintings?
06:31No, absolutely not.
06:32You know, it came with earning the amount of money I was earning at the time.
06:34Number six, Elizabeth Holmes, Theranos.
06:36This Theranos blood test put my cholesterol at 170.
06:40My own doctor found it to be 169, just the week before.
06:45Holmes says she wants to make this sort of testing available anywhere, anytime.
06:49There's no reason why these can't be distributed in very, very decentralized locations.
06:56You're home?
06:57Yeah.
06:58Holmes captivated investors and the public with promises of a revolutionary technology
07:02that could perform hundreds of tests from a single drop of blood.
07:05She cultivated an almost cult-like following mimicking Steve Jobs' aesthetic
07:08and speaking in a deep, modulated voice.
07:10The problem?
07:11Her technology didn't work.
07:12There's this man who goes by the initials RC right now in Arizona
07:17who is suggesting that the lab results that he got from Theranos were not accurate
07:23and it led to him having a heart attack.
07:25The health implications were staggering as patients received inaccurate or unreliable diagnoses
07:30based on misinterpreted testing methods.
07:32Her elaborate deception, which involved a vast web of secrecy and intimidation,
07:36eventually unraveled under intense scrutiny from investigative journalists and regulators.
07:39Holmes' ultimate conviction for investor fraud served as a stark reminder
07:43that even the most compelling narratives can't mask fundamental lies, at least not forever.
07:47Well, she is one of 655 inmates at this so-called club fed about 100 miles outside of Houston
07:54where she grew up.
07:56She'll have absolutely no privacy.
07:58She'll be wearing a khaki uniform.
08:00She will spend her first 90 days working in the kitchen, as we mentioned, making 12 to 40 cents an hour.
08:05After that, she will work as a groundskeeper or a janitor at the facility.
08:10Number five, Angelo Mozilla, Countrywide Financial.
08:13Federal regulators yesterday charged Mozilla and two former deputies with fraud.
08:18They say Mozilla dumped nearly $140 million in countrywide stock using inside information
08:24about the dangers the company faced by underwriting high-risk mortgages.
08:27As the U.S. economy teetered on the brink of collapse in 2008,
08:31one figure stood out as a key architect of the housing crisis,
08:34Angelo Mozilla, the former CEO of Countrywide Financial.
08:36While hiding their own hand from investors, Mozilla was actively taking his own chips off the table.
08:44We allege that Mozilla engaged in insider trading by establishing four stock sales plans
08:49while he was aware of the company's increasing credit risk
08:53and the expected poor performance of countrywide originated loans.
08:57Mozilla presided over what became the largest mortgage lender in the United States
09:01and controversially, a major player in the subprime mortgage crisis that triggered the global recession.
09:05Take us back a little bit, walk us through this.
09:08What exactly was Mr. Mozilla accused of?
09:11He was accused of misleading countrywide investors about the kind of mortgages the company had been issuing
09:18over the last couple of years, from about early 2005 to the middle of 2007.
09:24As the housing market collapsed, Mozilla himself cashed out hundreds of millions in company stock,
09:29a move widely perceived as profiting from the very disaster he helped engineer.
09:33Though he avoided criminal charges, a civil settlement with the SEC permanently banned him
09:38from serving as an officer or director of any public company.
09:41The SEC said he told investors that the mortgages they were issuing were all proper
09:48and there was no significant risk to them.
09:52In fact, the SEC said they were letting their underwriting standards slide to met any competitor
09:58just in order to be able to sell every market onto the secondary market.
10:03Number four, Richard S. Fold Jr., Lehman Brothers.
10:06It could not stem the tide of the uncontrollable, and that's why I talked about it,
10:11of the uncontrollable market forces and the false rumors that swirled around the firm.
10:17Known as the guerrilla for his aggressive leadership style, Fold, CEO of Lehman Brothers,
10:22presided over one of Wall Street's most spectacular and globally devastating collapses.
10:26As the investment bank's leader for 14 years, Fold's uncompromising leadership proved to be
10:31his undoing, and that of his firm during the 2008 financial crisis.
10:35He stubbornly refused to acknowledge the extent of Lehman's exposure to toxic subprime mortgage
10:39assets, even as other banks desperately tried to deleverate.
10:42Lehman Brothers is going bankrupt, and financial markets from Asia to Europe are doing their utmost
10:48to prevent Monday from turning from dark to black.
10:51Employees of America's fourth-largest investment bank saw the writing on the wall late Sunday,
10:57after talks to pull them back from the abyss collapsed.
11:00The ensuing panic and market freeze directly contributed to the Great Recession,
11:03causing immense job losses and economic hardship worldwide.
11:06Fold's refusal to accept blame, his continued insistence that he had done nothing wrong,
11:10and his perceived lack of remorse made him a particularly detested figure.
11:14Dennis, I don't see why you thought he was contrite. I thought he was shameless. I thought
11:18it was appalling. He blamed everyone. He blamed, as you say, naked short sellers over and over in
11:23case we didn't get the point, when in fact hedge funds like Harbinger had money locked up in Lehman
11:28and was shorting it to try and make the most of the money that they already had. He blamed
11:32everybody but himself.
11:34Number three, Martin Shkreli, Turing Pharmaceuticals.
11:37Now, you guys have said that the reason you increased this price so much after acquiring the drug was in order
11:41to do the research and development to develop a better version of Daraprim.
11:44I just got off the phone with an HIV doctor who told me they don't need a better version of this drug.
11:49What are you doing here?
11:50Yeah, that's not true. There's a recent paper that suggests that two patients died due to autoimmune
11:57encephalitis from toxoplasmosis.
12:01Shkreli rocketed to international notoriety as the CEO of Turing Pharmaceuticals when in 2015,
12:05his company acquired the rights to Daraprim, a life-saving drug used by AIDS and cancer patients,
12:10and immediately hiked its price by over 5,000%, from $13.50 to a whopping $750 per pill.
12:17But Shkreli's villainy extended beyond drug pricing.
12:19What do you say to that single, pregnant woman who might have AIDS, no income?
12:28She needs Daraprim in order to survive. What do you say to her when she has to make that choice?
12:35What do you say to her?
12:36On the advice of counsel, I invoke my Fifth Amendment privilege against self-incrimination
12:40and respectfully decline to answer your question.
12:42His online antics, trolling critics and reveling in his controversial image,
12:46further cemented his status as a detestable figure.
12:49Ultimately, it wasn't the Daraprim scandal that led to his downfall,
12:52but a separate conviction for securities fraud related to his previous hedge funds
12:56and pharmaceutical company, Retrofin, where he defrauded investors.
12:59In the process, Shkreli became the modern-day poster child for unchecked corporate greed.
13:03To sort of engage in that kind of conduct while you're in a criminal trial is a bad idea
13:10because you, once you get to sentencing, you basically have an audience of one, the judge.
13:15And the judge is going to be looking at him and trying to evaluate what kind of person he is.
13:20Number two, Bernard Ebers, World Cop.
13:22Hi, David. As you well know, in his prime, Bernie Ebers was known as the Telecom Cowboy,
13:28a former high school basketball coach who cobbled together a company
13:32that ultimately helped lay the foundation for the internet as we know it.
13:37But it was all built on a massive, brazen fraud.
13:40Ebers cultivated an image as a folksy, cowboy, boot-wearing entrepreneur.
13:43But beneath that down-home exterior lay a ruthless executive
13:46who orchestrated one of the largest accounting frauds in U.S. history.
13:49Between 1999 and 2002, under Ebers' direction,
13:52WorldCom improperly booked billions of dollars in expenses
13:55as capital investments artificially inflating assets
13:58and making the company appear far more profitable than it was.
14:01Misleading regulators as well as investors on the health of the company
14:07and overinflated a lot of the company's numbers and profits and that sort of thing.
14:13And he was caught.
14:14Despite being only halfway through his sentence,
14:16Ebers' family and their attorneys argued now at age 78,
14:20being in prison had taken major tolls on the man's health.
14:23When the house of cards inevitably collapsed,
14:25WorldCom filed for bankruptcy,
14:26leading to the loss of countless jobs
14:28and billions of dollars in shareholder value.
14:30Ebers was convicted for fraud and conspiracy in 2005,
14:33eventually dying in 2020 while on compassionate release from prison.
14:37More on that breaking news.
14:38We force reported at 10 o'clock tonight,
14:40former WorldCom CEO Bernie Ebers has died.
14:44A family attorney confirmed that with 16 WAPT tonight,
14:47his family releasing a statement detailing his passing and thanking supporters.
14:52He was released from prison last year in December,
14:55having served 13 years of a 25-year sentence.
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15:16Developing right now, the former CEO of Enron has just been released from federal custody.
15:21Jeff Skilling, now 65 years old,
15:23was released after spending 12 years in prison for his role
15:26in one of the most high-profile corporate and financial fraud cases in American history.
15:32The saga of Enron remains a chilling epitaph for corporate hubris
15:35and at its heart was CEO Jeffrey Skilling,
15:37the architect of a dizzying financial deception.
15:40Skilling cultivated a Darwinian corporate culture
15:42that encouraged employees to prioritize short-term gains
15:45and obfuscate financial realities.
15:46You're the only financial institution that can't produce a balance sheet
15:49or a cash flow statement with their earnings.
15:53Well, thank you very much.
15:57We appreciate it.
15:58Appreciate it.
15:58He signed off on a sophisticated web of off-balance sheet partnerships
16:03and deceptive accounting practices
16:05designed to hide billions in debt and inflate the company's earnings.
16:08Enron's collapse in late 2001 was swift and devastating,
16:11wiping out over $60 billion in market value
16:14and leading to mass layoffs while obliterating employee pensions and savings.
16:17Skilling adamantly denied all wrongdoing
16:20even after being convicted on multiple federal felony charges.
16:24Jeff Skilling was the poster boy for all that was wrong
16:26with big corporations and corporate greed.
16:29Brian Weiss is Channel 2's legal analyst
16:31and covered Skilling's trial.
16:33Putting Jeff Skilling in the penitentiary
16:35for as long as we did didn't bring back
16:38any of the funds that these people lost
16:40and they were never really made whole.
16:42Which CEO do you think caused the most damage?
16:44Or is there another executive whose downfall we should have included?
16:46Be sure to let us know in the comments below.
16:48To be sure to let us know in the comments below.
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