CHRIS SEABURY, 25 July 2019
Over the years, Wall Street has had its share of scandals, many of which left despair and loss in their wakes. These include everything from insider trading to fraud that cost investors millions of dollars. To fully understand the impact these crooked individuals had on financial history, we must examine the people themselves, what they did and the legacy their misdeeds left behind. While no two are alike, what these men share is the lasting effects of their crimes, which are still felt by Main Street many years later. This article will examine four of the most famous and unscrupulous Wall Streeters: Michael de Guzman, Richard Whitney, Ivan Boesky, Michael Milken, and Bernard Ebbers.
The Canadian Miner: Michael de Guzman
He was the man many believe was the perpetrator of the famous Bre-X debacle. Bre-X is a Canadian company, but De Guzman was Filipino. De Guzman was the chief geologist for Bre-X, and he had access to core samples retrieved from a mine in Indonesia. When the gold deposit numbers came in a little below average, De Guzman helped contribute to the biggest mining fraud in modern history by faking the samples to indicate a massive gold find. As time went on, the estimates were increased to as much as 200 million ounces. To get a handle on this number, the U.S. Treasury Department has about 250 million ounces of gold in its reserves.
This fraud was accomplished by inserting gold into the samples to make it look like there was much more gold in the Indonesian mine than there really was. As a result, the 4-cent penny stock quickly climbed to as high as C$250 (adjusted for splits). For investors, this meant that a $200 investment would have ballooned to $1.25 million.