Here are the real reasons why these people lost billions of dollars!
9 - Masayoshi Son SoftBank, Japan's largest
telecom and internet company, was founded by Masayoshi Son, a serial entrepreneur
and the 3rd richest person in Japan. However, he has the distinction of losing the MOST money in
history as he lost nearly $70 BILLION dollars in the dotcom crash of 2000.
When the internet bubble burst, shares of Softbank went down 98%, and that’s really what affected
Son’s net worth so much! That’s the real reason he lost so much money. Was there anything that he
could have done differently? Sure of course. But a lot of things were simply out of his control.
However, he’s still far from broke. As of March 2020, he has a net worth near $16.6 billion.
Even though he’s taken the biggest loss in history, let’s just say this guy is still
winning in life heavily right now! Do us a quick favor, and hit that like button right there!
8 - Elizabeth Holmes Back in 2014, Theranos and its CEO
and founder Elizabeth Holmes were on top of the world. At that time, Theranos was a revolutionary
company. Holmes was called a genius who was seen as the female Steve Jobs. Holmes was then world's
youngest female self-made billionaire, with a net worth of around $4.5 billion.
Then it all came crashing down. Theranos basically just completely lied about their technology. Yeah,
she made her paper billions because of a giant lie. The real reason she went broke was because
she was never really rich to begin with. The lesson here is to not run a scam company? Also,
remember that hilarious fake voice of hers? Holmes was charged with fraud, and the company was forced
to close its labs and testing centers. In 2016, Fortune named Holmes one of the
"World's Most Disappointing Leaders". Fast forward to 2020, and Holmes is still broke,
and still dealing with her charges with the government! Her trial is set for March 2021.
7 - Adolf Merckle Adolf Merckle was
Germany's fifth richest man and the world's 98th richest man at one time. In March 2008,
his personal fortune was estimated to be roughly $12.8 billion by Forbes. Merckle made his money by
building his family business in chemicals into one of the biggest pharmaceutical wholesalers in the
world. He founded Ratiopharm, a maker of generic medicines that became a recognized brand itself.
In 2008, his investment company needed cash because of the financial crisis.
Banks demanded more collateral and called in loans early. In order to keep his company afloat,
Merkle put up his own personal assets as collateral and he agreed to sell Ratiopharm
in order to pay down the company’s debt. This was his first big mistake.
But his worst decision was his giant gamble on one single stock. Merckle made a bet that shares of
Volkswagen would drop like a rock in late 2008. But that didn’t happen. Long story short, the
stock actually skyrocketed from a little over 200 euros to over 1000 euros in less than two days.
This resulted in losses of hundreds of millions in euros for Merkle. Unfortunately,
Merkle decided to end his life during this financial crisis. His family said that he was
broken by his losses even though he still had $6 billion dollars left. What really happened
here? What could he have done differently? The financial crisis affected everyone’s cash flow.
Merckle’s mistake was taking a giant risky bet with too much at stake. What do you think?
6 - Allen Stanford Allen Stanford was
the chairman of the now-defunct Stanford Financial Group of Companies. At his peak,
he was worth more than $2 billion dollars. In 2020, his net worth is still zero, because, well,
he’s still serving a 110 year prison sentence for his role in running a massive ponzi scheme!
In early 2009, the government started investigating his company. He was charged
by the SEC with fraud and multiple violations of U.S. securities laws for an alleged massive
ongoing fraud for around $7 billion dollars. A former Stanford financial executive told SEC
officials that Stanford presented hypothetical investment results as actual historical data in
sales pitches to clients. The massive Ponzi scheme was finally revealed and Stanford
was found guilty in 2012. You know what his mistake was? Running a massive ponzi scheme!
5 - Alberto Vilar Back before the internet bubble burst,
Alberto Vilar and his Amerindo Investment Advisors company made lots of money investing in young
high-tech companies. The thing about owning a lot of stock that’s worth a lot is that it
doesn’t mean anything until you sell it! Owning a bunch of stock in hot startups
that skyrocketed up means that things could skyrocket down just as quickly.
At one point, Vilar had an estimated net worth of more than $1 billion dollars.
By 2008, he was convicted of multiple counts of securities fraud and sentenced to nine years in
prison because of misusing investor money. Vilar had a problem with wanting fame and recognition.
He gave away hundreds of millions of dollars to the world's best
opera companies and charities in exchange for his name on plaques. However, he ultimately
fell short in many promised donations as his money troubles piled up from his overspending.
A lesson to steer clear of fraud is obvious. But just as important is the lesson to not give
away hundreds of millions of dollars when the money coming in isn’t yours to give!
4 - Eike Batista Eike Batista fell a long way. At his financial
height, he was the richest man in Brazil. He made his money largely through Brazilian natural
resource companies. But he ran up a lot of debt. When his businesses crashed in early 2012,
so did his net worth. The long and the short story is that his oil business
failed to meet its production target all the while his other companies needed cash.
His net worth fell all the way from an estimated $35 billion dollars to less than $300 million
by July 2013. That meant that he lost more than 99% of his original net worth! By 2014,
Bloomberg reported that Batista had a negative net worth though,
and he agreed! He was quoted saying that his net worth was approximately
negative $1 billion dollars. What was his mistake? It was really
just taking on too much debt and putting almost all his eggs in one basket with oil. For example,
he defaulted on a $45 million dollar bond payment in 2013, which was the largest corporate default
in Latin American history. But his worst mistake was bribing government officials in order to
secure government contracts. He ended up getting sentenced to 30 years in prison in July of 2018!
3 - Vijay Mallya Vijay Mallya isn't a household
name in the United States, but he's quite famous in his native India. He was a liquor baron and he
also owned the now defunct Kingfisher Airlines. He was reportedly worth around $1.5 billion
dollars at one point. But he lost his fortune largely because of massive debts,
lavish spending, and of course, financial fraud and money laundering.
Indian law enforcement were going to charge him for his financial crimes, but he just said, NOPE,
and quickly left the country! Mallya left India in March 2016 and he’s been stuck there ever since.
Mallya’s nickname was the "King of Good Times" because of his extravagant lifestyle. However,
Mallya and his companies have been embroiled in financial scandals and controversies since 2012.
A group of 17 Indian banks are STILL trying to collect approximately $1.3
billion dollars in loans he’s taken out. His passport has since been revoked,
and he's living in exile in the UK. Indian law enforcement are still attempting to
extradite him to India in 2020! 2 - Jocelyn Wildenstein - Catwoman
Imagine having 2 billion dollars. How many of you guys could blow through that?!
Back in 1999, Jocelyn Wildenstein, otherwise known as Catwoman, received
a whopping two and a half billion dollars in her divorce from her art dealer husband Alec!
Not even 20 years later, it’s almost all gone! Jocelyn used to brag about her lavish
lifestyle and she also earned her nickname Catwoman because of ahem yes, all of her
plastic surgeries that she denied having. What’s more amazing than the amount of her surgeries is
the fact that back that in March of 2018, she actually had to file for Chapter 11 bankruptcy!
She listed the $900 dollar check she gets from Social Security each month as her only source of
income. She didn’t have any checking or savings accounts, no retirement fund or pension plans
and no investments. Or at least that’s what the filing said. Her personal property was valued at a
little more than $16 million dollars. She claimed to owe roughly $6 million dollars to her 16
creditors but stated that she wanted to file Chapter 11 to avoid liquidation of her assets.
She estimated the value of her wardrobe to be only $1,000 and the value of her jewelry at $0. She
said her jewelry was worthless. This is despite the fact that she was often being seen in public
wearing a huge 32-carat diamond ring. What we really don’t get is how she managed to lose
billions of dollars! The truth is that even with billions, someone with a ridiculous spending habit
can still manage to spend it all. 1 - Bernie Madoff
You know Bernie Madoff right. We’re not gonna get too much into his story as he’s
been covered extensively. He entered financial history by swindling many wealthy people out of
TENS of billions of dollars in what’s most likely THE Biggest Scam in human history.
It's estimated that before he went to prison he was worth about $17 billion dollars. But really,
should that have really counted as HIS money? Let’s never forget that there’s no such thing
as a guaranteed return. Ever. Here’s what’s next!