What are some of the craziest financial losses people have had?
Let’s get right into it and start with:
5 - Real Life Grand Theft Robert Alexander used to live a lavish style
and would spend thousands at gambling tables in one night.
He was a video game marketing mogul who'd once worked for the parent company of GTA,
Take-Two Interactive.
However, Alexander's fairy tale life fell apart when he was busted for securities fraud.
Once upon a time, Alexander was a very wealthy man.
He owned a video game distribution company, and sold the company to Take-Two for thirty
million dollars.
Under normal circumstances, that's enough money for most people to live a comfortable
life.
But Alexander wasn't a man made for comfort.
He was made for high stakes and risks, and he explored that part of his life through
gambling.
Alexander used most of the money he got from the payout to fuel a high-stakes gambling
addiction.
He bought himself a Maybach as well because there's no better car to drive to a high-stakes
gambling game.
But Alexander didn't just use his own money to gamble.
He was also fond of borrowing money to gamble as well.
You might think that borrowing money to gamble isn’t a good idea.
But Alexander disagreed.
So he borrowed $200,000 from one friend, $700,000 from another, and never repaid a single dollar.
Kizzang What do you do when you lose almost all of
your money in a decade-long high-stakes gambling stretch?
Obviously you create a company, fundraise, and spend that money on yourself, rather than
your company.
And that's precisely what Alexander did.
After losing all of his money gambling, he started a new company called Kizzang.
According to a former employee, there was never a coherent vision for how Kizzang would
make money.
But Alexander couldn’t be bothered with details like ‘profit making’.
He told investors that he'd invested a lot of his own money into the company and that
he'd helped to create Grand Theft Auto, so he had a proven track record.
He also claimed to have donated about $50 million to a Los Angeles hospital.
Of course, he didn't do any of that.
Instead, Alexander embezzled the money investors had raised.
He spent it on himself and used it to fund his lavish lifestyle.
Alexander went to amusement parks, bought a vehicle for his daughter, and gambled the
rest of the money away.
But Robert’s time living the good life was running out.
Aftermath
Robert Alexander was arrested at a hotel on Long Island and was promptly charged with
securities fraud and wire fraud.
Once Alexander was safely in the hands of the police, he began to snitch relentlessly.
His first target was Sherry Pryor Witter, an early investor in Kizzang.
He claimed that Witter had known that her stake in Kizzang was worth nothing, and yet
sold the papers to another person.
He argued that that was insider trading and that Witter should be punished.
But Alexander wasn’t really concerned with dispensing justice.
He had a vendetta against Witter, since she’d ratted him out to the police and made sure
his entire scheme unraveled.
She was the only reason the police were able to track down Alexander, and he knew it.
Once he was caught, Alexander quickly threw Witter under the bus in an attempt to save
himself.
He hoped that by alerting the SEC to Witter's fraudulent behavior, the court may pass a
more moderate sentence in his case.
But that's not the only trick Alexander has up his sleeves.
So far, he's managed to avoid being sentenced to jail, despite having already pled guilty.
Since making his plea, he's managed to postpone his sentencing hearing three times.
The first two times, he cited the coronavirus pandemic.
The third time, he argued that he was going blind and needed surgery to fix his eyes.
Alexander hasn't been lying low since the swindle either.
He's now launched a new business called Peragos.
The company is a marketing firm and is currently taking on contracts.
Hopefully Alexander doesn't set up shop next to a casino.
4 - Bearish Intentions Jimmy Cayne was the CEO of Bear Stearns and
was worth over a billion dollars at one point.
However, in just over a year, Cayne lost almost all of it.
How does someone lose a billion dollars in less than a year?
Well, the story starts with Jimmy running Bear Stearns.
The company doesn't exist today, but when it did it was one of the biggest global investment
firms in the world.
Cayne, on the other hand, was a young boy who'd come from a humble background to lead
the company.
He had attended Purdue University but dropped out halfway through to join the army.
Cayne left the army soon after to become a photocopier salesman.
He also spent some time selling scrap metal.
From there, Cayne would rise to become the CEO of Bear Stearns after a chance meeting
with Bear Stearns’s then CEO.
When Cayne was eventually promoted to CEO, he indulged heavily.
He picked up an infamous habit for creative medication and was known for his chronic use
of the devil’s lettuce.
In the end, Cayne would be more known for his role in the 2008 stock market crash.
Humble Beginnings
Jimmy Cayne's journey to being the CEO of Bears Stearns started with a game of bridge-
a card game loved by everyone’s grandma.
In the late 60s, Cayne quit his job as a photocopier salesman and decided to move to New York.
Some people move to New York to become hotshot lawyers or bankers.
Cayne moved to New York to achieve his dream of being a professional bridge player, which
was a thing?
When Cayne got into the bridge circuit and started working his way up through the rankings.
At some of these games, he would meet a man named Alan Greenberg, better known as Ace
Greenberg.
Greenberg was the CEO of Bear Stearns at the time, and he loved playing bridge as well.
After meeting Cayne at games a few times, Greenberg was impressed by Cayne's wits and
decided to hire him as a stockbroker at Bear Stearns.
And that's how Cayne's adventure at one of the biggest firms in the world began.
Over the next ten years or so, Cayne proved that a college degree or an education in finance
wasn’t necessary to be a talented stockbroker.
He quickly became a partner at the company, and a while later he was named president.
When Greenberg was about to retire, he decided to hand over the reins to his protégé, Jimmy
Cayne.
Under Greenberg, Bear Stearns was known as a conservative company that avoided too much
risk.
Under Cayne, it was the opposite.
Cayne increased the company's leverage ratio from barely any to 35 to 1.
That means for every dollar that Bear Stearns owned, it had borrowed 35 dollars.
The company also dove into new markets and launched aggressive hedge funds.
Through all of this, Cayne developed a love for the giggle plant and unintentionally worked
hard to earn his reputation for it.
Cayne always publicly denied his love for oregano, but knowledge of his relationship
was the worst-kept secret on Wall Street.
But that didn't stop Cayne from reaching dizzying heights of personal success.
His investment strategy was risky, but it worked well for a short while.
He was able to amass a 5% stake in Bear Stearns, and the growth of the company soon meant that
stake was worth a billion dollars.
Cayne became the first CEO on Wall Street to become a billionaire through equity.
Soon, though, things were going to take a wild turn.
Downturn
Unfortunately for Cayne, the going was only good for a short while.
In June of 2007, two of Bear Stearns's highly leveraged hedge funds collapsed, and this
revealed the chinks in the company's armor.
As the funds collapsed, Cayne was unreachable as he had gone for a ten-day-long Bridge tournament.
Yes, Cayne still wanted to play bridge, despite being one of the most powerful CEOs in the
country.
Aftermath
The losses from these hedge funds revealed that Bear Stearns was a house of sticks, and
things started to snap, little by little.
The impending mortgage crisis worsened things, as Cayne had over-exposed Bear Stearns to
mortgage-related investments.
Within 12 months, Bear Stearns's share price plummeted to $30 from an all-time high of
$172.
It became obvious that the company couldn't continue as an entity and needed to either
file for bankruptcy or find a buyer.
JP Morgan came to Bear Stearns’s rescue and bought it out for about $10 per share.
This was an almost 99% reduction from the company's all-time high.
In the end, Jimmy Cayne's fortune which had been worth a billion dollars dwindled to less
than 60 million.
Cayne had gone from being a billionaire to a millionaire in just twelve months.
But it isn't all bad for Cayne.
He did somehow achieve his ultimate goal.
At the time of his passing, he was ranked #35 on the American Contract Bridge League's
list of the best players of the decade, making him a winner and a loser.
3 - Grounded Jet Kernbrell Thompkins is a former Patriots player
who was accused of stealing over $250,000 dollars from COVID relief funds through unauthorized
access device fraud.
Kernbrell Thompkins had withdrawn about $230,000 from Miami-area ATMs as a part of the fraud.
The money was part of funds supposed to be disbursed to individuals and businesses who
were hard hit by the pandemic.
Thompkins was able to steal this money through several stolen identities.
Strange Motivation
This case is especially disturbing because Thompkins used to be a relatively wealthy
man.
As a player for the Patriots and a part of the NFL, he earned about $1.4 million in earnings
throughout his career.
However, it seemed those earnings couldn't let Thompkins live the life he felt he deserved,
so he sought to supplement those earnings through fraud.
Unfortunately for Thompkins, free lunches are never free.
Our footballer-turned-fraudster was eventually caught by the police, and was soon charged
in court.
Thompkins pled guilty to one count of unauthorized access device fraud and one count of aggravated
identity fraud.
The court sentenced him to 25 months in jail, with a year of supervised release.
2 - Iron Mike Trainwreck Mike Tyson was one of the wealthiest boxers
of all time, but he lost it and eventually filed for bankruptcy.
In the 90s, Tyson was the toast of the town, the cat’s pajamas, as well as the dog’s
tuxedo.
He'd conquered the heavyweight division, and was enjoying all the trappings that came with
that title.
He hosted lavish parties with some of the most glamorous people on earth and was always
decked out in incredible jewelry.
However, Tyson's day in the sun was never going to last forever.
By the beginning of the 2000s he was already running low on cash.
And then came the divorce from his second wife, Monica Turner.
Mike’s income meant that he was going to pay a high divorce settlement, and he simply
didn't have that much money in cash.
So Mike started selling off his properties.
The first to go was his beloved Connecticut mansion- complete with a nightclub and casino.
Aside from having to pay for his divorce, he also had pretty huge debts.
Cashflow
Tyson owed the British tax authorities about $4 million in taxes and owed the IRS about
$13.4 million.
He also owed his law firms, a music producer, his former trainer, and his financial manager.
These debts totaled more than $2.5 million.
Mike also owed over $50 thousand in child support.
And that was just the tip of the iceberg.
When he filed for bankruptcy, it was revealed that Tyson was in debt by over $27 million.
For years, Tyson spent money with reckless abandon.
From 1995 to 1997 he spent up to $9 million in legal fees while throwing a $410,000 birthday
party.
He also spent a small fortune of about $230,000 on pagers, an ancient communication device
that just beeped a lot, and cell phones.
And he owned two tigers, which is what you’d generally do when you have a lot of disposable
income to spend.
The thing is, those tigers gulped up to $150,000 each per year on feeding alone.
Mike’s spending habits had been notoriously out of control.
In one of his more famous excessed, Tyson once bought his ex-wife, Robin Givens, a £1.75m
solid gold bathtub.
He also had a proclivity for buying every car he could.
Tyson had the rare Lamborghini LM002 which was worth over £100,000, he had an Escalade
and a Hummer H2.
The prize of his collection, however, was his incredible £400,000 Bentley Continental
SC.
Cleaning Up
By 2003, Tyson was completely bankrupt.
But things only got worse for him.
Two years after his bankruptcy filing, Tyson pled guilty to charges of driving under the
influence and cocaine possession.
However, Tyson wasn't just resilient in the ring.
He was resilient in life too.
Mike bounced back by launching his on-screen career when he played an altered version of
himself in The Hangover.
The Hangover was a box office smash that led to three sequels, and Tyson's life was finally
looking up again.
He appeared in the sequel two years later, and finally cemented his reputation as a changed
man.
But some of Tyson's fans still want to be reminded of his crazy days.
As Tyson stepped back into the limelight, he discovered that there was a market for
people who wanted to take a picture of him biting off their ears.
Tyson had famously bit off the ear of Evander Holyfield during a match, and his fans wanted
a picture of him doing the same to them.
Tyson’s team decided to monetize that market and charge $200 per picture.
Since then, Tyson has properly settled into his life as a star of the big screen.
He's gotten parts in other films such as IP Man, and was even featured on a 2015 Madonna
track that no one probably heard.
Currently, Mike runs a popular podcast, HotBoxing with Mike Tyson, with the co-owner of his
cannabis farm which earns him half a million a year.
Hopefully now he can stay out of debt.
For a deeper dive into this story, click the link here!
1 - Money Bolted Usain Bolt is one of the most recognizable
people in the world, and currently holds the World record for the fastest time ever in
100 meters.
Unfortunately for Bolt, he recently had a run-in with scammers and lost a lot of money.
Stocks and Securities Limited, the company in charge of Bolt's retirement fund, had lost
over twelve million dollars of his money.
When the company was probed for an explanation, it claimed that discrepancies in the Olympic
medalist's account were due to a rogue former employee.
But according to Jamaican authorities, it appears that Usain Bolt was a victim of a
targeted scheme.
The scheme had also targeted many elderly investors.
But that wasn't the only bombshell.
Not Alone
While Bolt was a recent victim, Jamaican authorities allege that the racket had gone on for at
least thirteen years.
The discovery of the scam prompted action from the Jamaican government against Stock
and Securities Limited.
The government invited international partners and law enforcement organizations like the
FBI to investigate the company and get to the root of the matter.
Eventually, the Jamaican government sanctioned the company and put it under state control.
This is part of an ongoing effort to probe every transaction the company has been involved
in and understand just how deep the rot goes.
Hopefully, it can be dealt with in record time.
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Let us know in the comments below what you’d rather do if you won 100 million in the lottery,
would you take the lump sum or would you take the annuity?