Newspaper and television journalists have hypothesized that the stock market downturn of 2002 was precipitated by reports of "accounting irregularities" at Enron, Worldcom, and other firms in the United States.
Famous examples of deceiving good faith profit participants involve Darth Vader actor David Prowse (with $729M adjusted gross earnings on Return of the Jedi)[7] and Forrest Gump novel writer Winston Groom (with $661M gross theatrical revenue)[8]—both of whom have been paid $0 on their profit participation due to the films "being in the red".
Lehman Brothers utilized repurchase agreements to bolster profitability reports with their Repo 105 scheme under the watch of the accounting firm Ernst & Young.
The U.S. Securities and Exchange Commission (SEC) filed charges and convicted multiple Merrill Lynch executives of aiding the fraud.
[13] After Goldman Sachs had engineered the financial instrument and sold it to the Greeks—simply shifting the liabilities in the future and defrauding investors and the European Union, the investment bank's president Gary Cohn pitched Athens another deal.
[14] Italian dairy giant Parmalat employed a number of creative accounting and wire fraud schemes before 2003 that lead to the largest bankruptcy in European history.
[17] This massive debt was largely caused by failed operations in Latin America and increasingly complex financial instruments used to mask debt—such as Parmalat "billing itself" through a subsidiary called Epicurum.
[18] It was also discovered that its CEO Calisto Tanzi had ordered the creation of shell accounts and diverted 900M Euros worth into his private travel company.
Within most parts of the European Union and the United States, this practice is perfectly legal and often executed in plain sight or with explicit approval of tax regulators.
[21] In 2014, the Bermuda deal with Dutch authorities expired, and Nike shifted the profits to another offshore subsidiary, a Netherlands-based Limited Liability Partnership (CV, short for Commanditaire Vennootschap, generally known as a Kommanditgesellschaft).