Here are a few people that’ve learned to
lose BILLIONS of dollars!
Find out how one person lost over SEVENTY
BILLION DOLLARS!
14 - Björgólfur Gudmundsson
Björgólfur Gudmundsson was once the second-richest
man in Iceland and a major stakeholder in
the Icelandic bank, Landsbanki.
But finance wasn’t the only place where
he made his money.
Gudmundsson had first made a lot of money
in the brewing industry in russia.
But why in another country?
Well, in the 1990s, he was sentenced to 12
months in prison for fraud.
He had faced around 450 charges!
When your home country is a small island of
only 320,000 and you’re a prominent business
person, there's nowhere to hide.
Because of that little scandal, he left to
first make money in Russia.
It took him less than ten years to become
one of the 250 richest people in the world,
with businesses stretching from Bulgaria all
the way to the US.
Gudmundsson's net worth was at one time estimated
to be as much as $3.5 billion dollars.
But then, the financial crisis happened in
2008.
His companies owed roughly $10 billion dollars,
nearly $1 billion of which he had personally
guaranteed.
He went into massive debt.
He had to file the largest bankruptcy filing
ever in Icelandic history at the time!
His bankruptcy covered a massive $759 million
dollars of personal debt.
Much of the reason behind Gudmundsson's massive
fall was a result of the plummeting Icelandic
economy.
It was almost a total collapse of the Icelandic
banking system.
And it was because of his bank, the second
largest company in Iceland!
However, amazingly enough, after that massive
debt, he went back to being a Billionaire
again in a crazy comeback!
13 - Jocelyn Wildenstein
Imagine having 2 billion dollars.
Would you be able to blow through that?
Imagine how hard it would be to blow through
2 billion dollars!
But Jocelyn Wildenstein has somehow been able
to do it.
Back in 1999, Wildenstein, whose nickname
is Catwoman, along with a whole assortment
of cat related nicknames, received a whopping
two and a half billion dollars.
Of course, it was in a divorce from her art
dealer husband Alec Wildenstein.
However, just two decades later, it’s gone!
HOW?!
This Swiss-born socialite was all about the
high life.
That and the plastic surgeries that earned
her nickname Catwoman.
What’s more amazing than the amount of her
plastic surgeries is the fact that in March
of 2018, she filed for Chapter 11 bankruptcy!
She listed the $900 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 a little
more than $16 million dollars.
She claimed that she owed roughly $6 million
dollars to her 16 creditors but stated that
she wanted to file Chapter 11 to avoid liquidation
of her assets.
She estimates the value of her wardrobe to
be only $1,000 and the value of her jewelry
at $0.
She said her jewelry is worthless, despite
often being seen in public wearing a 32-carat
diamond ring.
The details of her bankruptcy isn’t what’s
important here.
What’s important was how she blew through
a couple billion dollars!
She was rumored to spend at least a million
dollars a month on random lavish purchases.
But still!
Just how!
12 - Alberto Vilar
Back before the internet bubble burst in the
early 2000s, 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 is that
it’s only on paper.
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.
Well, those were the good times.
Vilar had a thing of being in the limelight.
He wanted fame and recognition.
So for example, he gave hundreds of millions
of dollars to famous opera companies and charities
in exchange for his name on plaques.
In addition to the millions of dollars he
already gave, he also would just go ahead
and pledge much more.
Following the crash of technology stocks in
2000, Vilar pledged to carry on with his promises,
even if that meant he would have to use money
from his personal fortune and his company's
income.
However, he ultimately fell short in many
promised donations as his money troubles piled
up from his spending.
In 2005, Vilar was arrested for securities
fraud.
Authorities claimed that he had misappropriated
client funds for personal use.
By 2008, he was convicted of multiple counts
of securities fraud and ultimately sentenced
to nine years in prison!
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 that money is coming straight from investors!
11 - Patricia Kluge
Patricia Kluge was a popular model and socialite
back in the 70’s.
During a trip to New York City, she met John
W. Kluge, a German-American entrepreneur who
was at one point in time, the richest man
in the US with a net worth of roughly 5 billion
dollars back in 1980.
He was the owner of media giant, Metromedia.
They got married in 1981 and, after 9 years,
got a divorce.
In her divorce settlement, Patricia ONNNNLY
managed to get a $1 million dollar per-year
settlement, plus a mansion.
A 200-acre, 45-room estate located in Charlottesville,
Virginia.
If you think about it, her ex-husband didn’t
give up much at all!
So in 1999, Patricia decided to turn the estate
she got into a business.
She wanted to turn Charlottesville into the
preferred wine destination of the East Coast.
So she and her new husband William Moses,
opened Kluge Estate Winery.
The business venture was a success at first,
and soon their wines were being sold in five
star restaurants across the country.
Kluge’s wines were even served at Chelsea
Clinton's wedding.
With business booming, Kluge decided to expand
aggressively.
And this was where she bit off way more than
she could chew!
Over the next 5 years she took out $65 million
dollars in loans!
The money went into expanding wine production
and building a super-luxury subdivision called
Vineyard Estates.
The estates were supposed to include 24 multimillion-dollar
homes with pools, outdoor kitchens, tennis
courts, horse trails, and even space for private
vineyards.
And then the financial crisis in 2008 hit.
Vineyard Estates failed to draw buyers.
Property values plunged.
In 2009 Kluge put her estate up for sale at
$100 million.
The figure was cut to $48 million in early
2010 and then to $24 million, where it sat
until it was sold through foreclosure.
She ultimately filed for Chapter 7 bankruptcy
in June 2011.
10 - Bernie Madoff
You know Bernie Madoff!
We’re not gonna get toooo deep into his
story because you most likely know what he
did.
He entered financial history by swindling
many wealthy people out of tens of billions
of dollars in the largest Ponzi scheme in
history.
As early as 1999, whistleblowers reported
to the SEC that Madoff revenues were TOO impressive.
Impressive to the point that they were almost
mathematically impossible to obtain.
This caused some of the most popular trading
companies to stop working with him.
But that didn’t stop anything for his operations.
But suspicions kept on growing.
Supposedly in 2008, Madoff was reported to
have confessed to his brother that he had
over $5 billion dollars in debt and that his
business had been functioning fraudulently!
In March 2009, Madoff pleaded guilty to 11
federal felonies including fraud, money laundering
and the creation of a 20-year old Ponzi scheme.
He was sentenced to 150 years in prison, to
be served in a federal facility.
Let’s never forget, there’s no such thing
as a guaranteed return, ever.
9 - Aubrey McClendon
Not many Billionaires start out by getting
a degree in history.
But well, Aubrey McClendon did just that by
getting a major in History from Duke University,
and here we are talking about him!
However, he did get a minor in accounting,
and it was his first job as an accountant
that made him realize he had a knack for the
oil and natural gas business.
That’s the sector where Aubrey made his
billions!
After a couple of years at a public Oklahoma
oil and gas company, he decided to start his
own company in the natural gas industry.
In 1989, he co-founded Chesapeake Energy Corporation.
Chesapeake became known for the uncommon locations
it used for drilling, and soon began making
a lot of money.
By 1993, he took the company public– and
this proved to be his most successful move.
The company’s stock tripled to almost three
times in value over a period of 3 years.
He helped build Chesapeake Energy into the
nation’s second-biggest producer of natural
gas only after ExxonMobil!
By 2005, McClendon was considered one of the
best-performing CEOs in the United States
by Forbes magazine.
He could have just easily slowed down on the
risk and focused on having some fun.
You know he didn’t because he’s on this
list!
In 2008 was where things started to crumble.
Extreme borrowing, aggressive financing and
plunging oil and gas prices all combined to
bring down Chesapeake shares by 80%.
McClendon was forced to sell nearly all of
his own shares to meet margin calls!
The company had to write down billions.
The risks that he took for his company didn’t
exactly make too much sense!
McClendon had Chesapeake acquire leases to
so much land that it would have taken them
over 30 years to drill them all!
He argued that it was money well spent because
there’s only a small window to get good
acreage for low prices.
But how much sense does it make when the company
has to pay interest for the debt it took on?
And what value is it to shareholders for Chesapeake
to be sitting on gas fields it wouldn’t
get around to drilling for a decade or more?
It’s like if Tesla built hundreds of thousands
of Teslas and then just kept it in storage
to sell decades later because electric cars
are gonna get more expensive!
It only makes sense if the price of oil stayed
high!
But we know that oil prices didn’t stay
high forever.
And that’s when he started losing hundreds
of millions of dollars in net worth.
In 2012, it was reported that McClendon had
used over A BILLION dollars in personal loans
from the company's funds to pay off the other
companies who were lenders to Chesapeake.
The long and the short of it is, most of McClendon’s
net worth was tied to Chesapeake stock.
He lost a billion, but hey, he still was making
millions a year.
By 2016, McClendon had already left the company
and started another one called American Energy
Partners.
It all came crashing down on March of 2016.
McClendon was indicted by a federal grand
jury for allegedly conspiring to rig bids
for oil and natural gas leases.
A day after his indictment, he had a fatal
car crash.
He basically crashed straight into a wall.
Does this sound suspicious to you?!
8 - Huang Wenji
Huang Wenji was continuously listed among
the most successful and richest businessmen
of China.
He’s one of the chairmen of China Jicheng
Holdings.
The company produces and sells…..umbrellas.
Umbrellas and umbrella parts.
Yes, umbrellas!
This allowed Wenji to at one point, accumulate
a known net worth of $1.9 billion dollars!
This was mainly based on the valuation the
company had.
At one point, Wenji and his wife owned 75%
of the company.
That made sure that most of the company's
profits would be saved within the family!
Unfortunately for them, this would all change!
This story is actually pretty cut and dry.
He was another paper billionaire who saw his
fortune go up in smoke!
A dramatic crash on the Hong Kong stock market
caused the company's stock to lose 94% of
its value– and it all happened in a day.
Back in 2017, Wenji saw his net worth take
a major hit.
Long story short, his company never should
have been valued as high as it was.
It seems like the share value was that high
because of manipulation.
So should he really have been part of this
video?
We’ll leave that one for you to decide.
To this day, the company's stocks have virtually
no value.
It safe to say this is the main reason Wenji
disappeared from the list of the most successful
businessmen in China!
7 - Bernie Ebbers
Bernie Ebbers was one of the most prolific
businessmen in the US.
He actually started his business career by
first managing a chain of motels in Mississippi.
But that’s not where he made his money.
His big break was joining investors to form
Long Distance Discount Services!
Two years later, he was named the CEO.
Long Distance Discount Services quickly acquired
over 60 other independent telecommunications
firms.
This group, ended up changing its name to
WorldCom in 1995.
Does the name WorldCom ring a bell to you?
Yep, this was the company that had one of
the biggest accounting scandals ever!
At the time, the company’s bankruptcy was
the biggest case of corporate fraud in U.S.
history.
Ebber’s world was WorldCom, and WorldCom
was him.
He had built the company, he ran it, and he
did the fraud!
At his financial peak in 1999, Ebbers was
worth an estimated $1.4 billion dollars.
He was listed at number 174 on the Forbes
400.
With all this money, what happened?
Well, essentially it was just his spending.
His expenses were just out of control.
Does this sound like a recipe for disaster?
Yes.
And this is one of the reasons why athletes
go broke.
Find out more in this video here!
So much so that between 2000 and 2002, Ebbers
started using WorldCom stock holdings to back
up over 400 million dollars in personal loans!
This was somehow done with the company's board
of directors' permission!
How did anyone on the board not see a problem
there?!
And that’s when the wheels started to fall
off.
Ebbers was obsessed with keeping WorldCom's
share price high, and rightfully so.
He was panicked about the pressure over the
loans.
If share prices dropped, then he would have
needed to put up even MORE collateral for
his huge loan.
So to make sure that didn’t happen, he just
had his company cook the books.
He made sure the numbers met expectations
for Wall Street, that way WorldCom’s stock
price didn’t drop.
But it all came crashing down when an internal
auditor began asking questions about curious
accounting at WorldCom.
Investigators eventually unearthed $11 billion
in cooked books!
Ebbers was sentenced to 25 years in prison
in 2005.
WorldCom investors brought a class action
civil lawsuit against him for his role as
well, where the case reached settlement.
On paper, Ebbers was left with an estimated
50 thousand dollars after the settlement!
6 - Adolf Merckle
Adolf Merckle was born in Dresden, Germany,
into an already wealthy family.
However, he took the small chemical wholesale
company his grandfather had created and turned
it into one of Germany's most successful pharmaceutical
companies.
But he also expanded his empire in other industries
as well, such as a company in the cement business
and a company in the recycling business.
Merckle's net worth was estimated at around
$12.8 billion dollars back in 2007.
However, an unfortunate series of events happened
for Merckle just one year later.
Merckle had an investment company called VEM.
This company faced some serious liquidity
difficulties and somehow had owed banks over
5 billion euros!
So Merckle had to take out even more loans
to keep up the payment schedule to keep VEM
afloat.
Is this sounding familiar?
So he ended up using shares of his cement
company as collateral for the loans.
However, there was the recession back in 2008.
The market share of the values plummeted more
than 75%.
Of course, the banks asked for more collateral
on the loan and for even quicker payments
on the earlier loan.
Everything was quickly spiraling out of control.
On top of that, he also had shorted shares
of Volkswagen.
Well, it turns out that Volkswagen shares
shot up almost 5 times in value.
This caused him to lose over 500 million dollars!
Unfortunately, in January 2009, Merckle put
himself in front of a moving train.
His family said that he had been "broken"
by his losses even though he still had around
$6 billion left.
5 - Sean Quinn
With a steady growth on his investments, Sean
Quinn managed to become the richest man in
Ireland.
Well, at one point!
Quinn built his empire with a humble £100
loan in 1973.
He started selling gravel he extracted from
his family farm and thus created what came
to be the foundation of his fortune: Quinn
Cement.
This first endeavor gave place to a bunch
of other businesses.
He was in a whole bunch of industries, such
as the hospitality industry with Quinn Hotels,
insurance with Quinn Direct, and finance with
Quinn Financial Services just to name a few.
He also held a 25% stake in Anglo Irish Bank,
which had to be bailed out by taxpayers during
the 2008 financial crisis.
In 2008, his net worth was an estimated 4.7
billion euros.
But then came the recession hit.
By 2009, the Anglo Irish Bank had collapsed,
with its shares falling to 20 cents a piece!
The Irish government took over the bank’s
operations, and Quinn saw a big chunk of his
fortune, almost 3 billion euros, wiped away!
At one point, the Irish Bank Resolution Corporation,
which took over Anglo Irish Bank, said Quinn
owed the bank more than €2 billion.
Quinn was later charged with contempt of court
for attempting to hide assets from the bank
in an effort to avoid paying back his debts!
He was declared bankrupt in 2012, and he was
sentenced to 9 weeks in jail for his little
shenanigan of trying to hide assets!
4 - Elizabeth Holmes
Back in 2014, Theranos and its CEO, Elizabeth
Holmes, were on top of the world.
At the time, Theranos was a revolutionary
company started by Holmes.
She was hailed as a genius who thought of
herself as the female Steve Jobs.
Holmes was the world's youngest female self-made
billionaire, with a net worth of around $4.5
billion.
Then it all came crashing down.
Basically, almost everything about Theranos
was made up.
Holmes had supposedly come up with technology
that was able to perform blood tests that
would only use a few drops.
The idea came from her fear of needles as
the main motivation.
There were skeptics from her peers, but Holmes
just played down the denials.
In 2015, an in depth investigation by a Wall
Street Journal journalist revealed the shocking
truth.
Therano’s testing method was flawed and
they had to use commercial blood testing machines
to get the correct results.
Theranos's fake technology was exposed, along
with the role Holmes played in covering it
all up.
The company faced a lawsuit by the SEC for
falsely reporting $100 million dollars in
revenue, when in fact, the company only made
$100,000 dollars!
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".
In June 2018, there came the news that Holmes
reportedly looked for investors for a new
startup.
As part of her settlement with the SEC, Holmes
agreed to give up financial and voting control
of Theranos.
And while she can't be the CEO of a public
company for 10 years, she's still allowed
to be the CEO of a privately held company.
But really, should she be trusted with any
investor money so soon after completely lying
about her company’s capabilities?!
3 - Vijay Mallya
Vijay Mallya isn't a household name in the
US, but he's quite well known in his native
India.
He was the wealthiest liquor baron and 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
taking on surprise surprise, massive debts!
Let’s also add on lavish spending, financial
fraud and money laundering.
As authorities were getting close to charging
him with his crimes, he fled the country.
After saying he wanted to move to Britain
to be closer to his children, Mallya left
India in March 2016 and by the way it looks,
he doesn’t plan on returning.
To this day, the Indian Government is still
actively trying to extradite him from the
UK to face charges of financial crimes in
India.
Mallya was once nicknamed the "King of Good
Times" because of his extravagant lifestyle.
But his companies have been embroiled in financial
scandals and controversies since 2012.
For example, back in 2013, Kingfisher Airlines
hadn’t paid its workers for more than 15
months!
A group of 17 Indian banks are still trying
to collect approximately $1.3 billion in loans
he had taken out!
Mallya's companies have faced a series of
controversies that have resulted either in
dissolution, theft, or bankruptcy.
He was later arrested on April 2017 by the
UK Metropolitan Police and later released
on bail but with the condition of not being
able to leave the United Kingdom.
2 - Eike Batista
Eike Batista fell a long way.
At his financial height, he was the richest
man in Brazil.
At the lowest…..well….. you’re about
to find out.
He made his money largely through Brazilian
natural resource companies, but he also ran
up debt.
A lot of it.
He started his entrepreneurial journey at
age 18 selling insurance door-to-door.
He then became a gold and diamond trader.
By 29, Batista had become the CEO of TVX Gold.
From 1980 to 2000, he created a whopping $20
billion in value gold and silver mines!
By 2011, Batista was ranked as the 8th richest
person in the world and the richest person
in Brazil.
However, his businesses crashed in early 2012.
At one point, he was worth an estimated $35
billion dollars.
By July 2013, it was estimated to be less
than $300 million dollars.
That’s still a lot of money.
But you have to realize that’s a drop of
more than 99% of his original net worth!
But wait.
Things got worse.
In 2014, Bloomberg reported that Batista had
a negative net worth.
And he himself agreed!
He was later quoted saying that his net worth
was actually approximately negative $1 billion
dollars.
Just wow.
So in order to change his luck, he went to
see a priest.
The priest suggested to him that quote "everything
he had taken has to be returned in some way
and this could be done by a ritual showing
gratitude.”
So Batista decided to toss gold coins worth
more than $150,000 thousand dollars into the
ocean!
Does this make any sense to you?
Obviously, it didn’t work because he still
took losses.
He was sentenced to 30 years in prison in
July of 2018!
1 - Masayoshi Son
Masayoshi Son founded SoftBank, Japan's largest
telecom and internet company.
His first business endeavours began when he
was a student at UC Berkeley.
With the help of some professors, Son invented
an electronic translator that he sold to Sharp
Corporation for $1.7 million dollars.
He made another one and a half million dollars
by importing used video game machines from
Japan and installing them in dormitories and
restaurants.
And then from there, he just kept making moves
and building wealth and eventually becoming
a billionaire and the richest person in Japan
at the time!
However, he has the distinction of losing
the most amount of money known in history
as he lost nearly SEVENTY BILLION dollars
in the dotcom crash of 2000!
When the internet bubble burst, shares of
Softbank went down 98%, and that’s what
affected Son’s net worth so much.
But he’s still far from broke.
In 2019, Forbes ranked him as the 43rd richest
person as he still has a net worth of roughly
$23 billion dollars.
Even though he’s taken the biggest loss
in history, let’s just say this guy is still
winning in life heavily right now!
Watch this next video to learn about The One
Reason Why Athletes Go Broke.
