The Biggest Corporate Scandals of the Decade

Former Turing Pharmaceuticals CEO Martin Shkreli in 2015 increased the cost of the life saving drug Daraprim by 5,000%, driving the price of the drug from $13.50 to $750 per pill. Daraprim, which costs less than a dollar to manufacture, is a medicine for toxoplasmosis, which can lead to deadly infections in people with HIV and affects about 2,000 Americans per year. The price hike caused widespread outrage. Shkreli was required to testify in front of Congress over the company’s pricing tactics and was eventually convicted in an unrelated case of securities fraud for which he is currently serving a seven-year prison sentence.

The Martin Shkreli scandal was big news on its own but was by no means an isolated problems throughout the decade. To give just one example, it was just one year later that pharmaceutical company Mylan boosted prices by 400% for its EpiPen auto injector, a life saving medicine for cases of severe allergic reactions.

In the approximately 15 years Theranos was in operation, the health technology company was able to raise more than $700 million in venture capital and reach a peak valuation of $10 billion without publishing a single scientific research paper. The company was led by founder Elizabeth Holmes, who started Theranos at age 19 and was a frequent subject of praise by media outlets like The New Yorker, Forbes, and Fortune.

The company touted technology that could perform a wide range of lab tests with a single drop of blood, but an October 2015 expose in The Wall Street Journal claimed Theranos had deceived the public. This opened the company to further scrutiny. The fallout began shortly thereafter, and Holmes was charged with massive fraud in March 2018. The former wunderkind is currently set to stand trial in federal court in 2020 and will face penalties of up to 20 years in prison and tens of millions of dollars in fines.

Hundreds of festival goers arrived on April 27, 2017, to the Bahamian island of Grand Exuma to attend the much-hyped Fyre Festival. The event, which was promoted by some of the world’s biggest supermodels, advertised a music festival with top-tier musical talent, drinks on a white sand beach, gourmet food, and luxury villas. Guests, however, arrived to find that the festival site was an unbuilt housing development; dinner consisted of a slice of bread, two slices of cheese, and salad; and many of the shelters were half-built FEMA disaster relief tents.

The scandal was broadcast to the world in real time. Festival guests tweeted images of a free-for-all grab and dash for shelter, outbound attendees locked in Exuma International Airport with no food, water, or air conditioning, and other footage of the bedlam that quickly unfolded. In the fallout from the festival, organizer Billy McFarland was sentenced to six years in prison on two counts of wire fraud and ordered to pay $26 million in restitution. He is also currently facing several class action lawsuits. While some attendees may have received refunds through their credit card company, as of the beginning of this year, no one at the festival had been refunded.

In April 2016, an anonymous whistleblower leaked 11.5 million documents from Panamanian law firm Mossack Fonseca to German newspaper Süddeutsche Zeitung. The 2.6 TB trove of files — now known as the Panama Papers — revealed a global network of offshore bank accounts and shell companies used by the world’s elite to conceal wealth and avoid taxes. The Panama Papers shed light on the inner workings and massive scale of offshore tax havens — researchers using data from the leak estimated that tax havens hold 10% of world GDP. These revelations led to Iceland’s Prime Minister Sigmundur Davíð Gunnlaugsson’s resignation from office. They also caused Pakistani Prime Minister Nawaz Sharif to be removed from office and sentenced to 10 years in prison.

The papers have incited anger and inspired a global effort to reshore international money. According to the International Consortium of Investigative Journalists, $1.3 billion in offshore money has been recouped by world governments since the papers leaked.

The Consumer Financial Protection Bureau revealed on Sept. 8, 2016, that Wells Fargo employees had opened more than 2 million unauthorized deposit and credit card accounts. In order to reach sales targets and other incentives, thousands of employees had opened accounts without customer consent. They also transferred funds from authorized accounts into the unauthorized accounts, which racked up fees and other charges for the unsuspecting customers.

Wells Fargo has been hit with over $2 billion in penalties related to the phony accounts since the scandal broke. Over 5,000 employees were fired in connection with the fake accounts, and CEO John Stumpf was forced to retire. Credit card applications plummeted in October 2016, and the Better Business Bureau revoked its accreditation of the bank.