A: Long before Enron and WorldCom, there was Insull Utilities Investment. The company’s CEO (Chief Executive Officer), Samuel Insull, got his start as Thomas Edison’s private secretary, so he knew a thing or two about electricity.
By 1889 he was vice-president of Edison General Electric Company. By 1930 he was running electricity companies collectively worth more than $2 billion.
Never a fan of banks, Insull financed his growing empire by creating a series of “investment trusts.” Basically, the concept was a complicated pyramid scheme that involved selling shares of these trusts to small investors.
His pyramid toppled in 1931. Thousands of investors lost their life savings, and Insull filed for one of the biggest bankruptcies in American history.
Corrupt CEO’s can take heart in this tale, though. Insull was tried three times for embezzlement, but ultimately acquitted. He moved to Europe and died in 1938 while riding the Paris Metro, whereupon his wallet was stolen. Poetic justice served a little too late.
Article comments
1 - Amy Pearlman
Hans Christiansen has got to be one of the most incompetant finance and investing officers in a while, ask former employees of MJX asset.