12 Companies That Have Engaged in Unethical Business Practices

Behaving ethically is a beautiful thing before the public eye. It is a soothing sound for a company’s consumer, and an opportunity to put any organization on the right side of the law. However, unethical behavior produces exactly the opposite results. Many companies have gone down or nearly went down as a result of unethical business practices.

Here we list several companies that have ruined their public image as a result of unprecedented unethical behaviors. These are companies that have allowed business issues to evolve into big scandals. They range from issues of governance, financial fraud, data privacy scandals and other unethical practices.

1) Medici Bank 1494: The bank in Florence was a family-owned business which was run down into public debt through decadent and extravagant spending of the owners. The bank went into insolvency as a result of the debauchery.

2) South Sea Company 1720: The Great Britain Company that carried out business in the seas of South America, involving slavery and colonialism. The company crashed following a speculative bubble. A parliamentary inquiry revealed a scandalous fraud among government officials, including John Aislabie, who was the Chancellor of the Exchequer. John was arrested and sent to prison.

3) Allied Crude Vegetable Oil Refining Corp 1963: The U.S. Company traded commodities. The owner Tino De Angelis caused a huge business scandal when he defrauded clients, including the Bank of America, making them believe that he was trading in vegetable oil. He obtained loans and made money using oil as collateral, showing the bankers some water with oil on the surface. The fraud was exposed, and the business collapsed.

4) Nordbanken 1991: this was a Swedish banking company which was nationalized for 6 billion kronor following the Swedish banking crisis.

5) Enron 2001: The U.S. Company was involved in energy business. Its directors and executives fraudulently concealed the company’s losses from investors to portray good financial position. When the scandal emerged, several leaders of the firm were sentenced to prison.

6) Adelphia Communications 2002: The company was running the business of cable television. Its directors were engaged in internal corruption, a big unethical practice and scandal that led to imprisonment.

7) WorldCom 2002: the Telecomms business experienced falling share prices and failed in a buyback scheme. The directors of the company were culpable of fraudulently pushing up the stock prices. This unethical accounting practice ruined the image of the company, so it was rebranded to MCI Inc. and later sold to Verizon.

8) Lehman Brothers 2008: Lehman Brothers was one of the biggest banks in the United States before the 2008 financial crisis. The company’s leaders were engaged in risky and speculative investment practices. They invested in Mortgage debts without carrying out due processes to determine the creditworthiness of borrowers. This led to significant defaults and financial losses, making the Lehman brothers to file for Bankruptcy.

9) AIG 2008: AIG was also affected by the financial crisis of 2008. The bank salvaged only $57.8 billion of its $441 billion worth of security.

10) BP 2010: the BP scandal involved a dramatic unethical issue where 4.9 million barrels of oil was spilled into the ocean. The spill which is popularly known as the Deepwater Horizon spill. It occurred in April 2010. Initial efforts to save the situation failed, and the effects were devastating to wildlife and the ecosystem.

11) Uber Scandal: in 2017, Uber faced a scandal in which senior officials were accused of sexual harassment. The company’s CEO Travis Kalanick was at the center of it. He was accused of covering up for unethical behavior in the company, and he resigned over the allegations in June 2017. The company had to hire a new CEO to clean up the company’s image and create a new culture.

12) Facebook Scandal 2018. Facebook faced a huge business scandal when it was revealed that the company breached the data privacy of its consumers. The company is said to have used a privacy policy that allowed apps to access users’ friends. This allowed Global Science Research to gather information about more than 87 million users, even though their app had only 30,000 users.

Leave a Reply

Your email address will not be published. Required fields are marked *