Filed Under: Business

Bankman-Fried, Holmes not the only infamous billionaires to get busted

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Stepping into the limelight as the next up-and-coming billionaire brings a lavish lifestyle and a lot of media attention. But is being called the next Warren Buffett or Bill Gates a compliment or something else? Some wonder if being compared to the Oracle of Omaha in print is a curse, similar to the Sports Illustrated cover jinx or Madden curse in sports. Here are the hyped-up billionaires that went bust in this week’s Five for Friday.

#5: Sam Bankman-Fried

Just a few months ago, FTX founder Sam Bankman-Fried was getting mountains of attention. He had an estimated net worth of $16 billion and Fortune ran a cover story pondering whether he was the next Warren Buffett. Mere months later, FTX is bankrupt and under investigation by the Securities and Exchange Commission and Department of Justice while Bankman-Fried has lost it all.

#4: Allen Stanford

Financier Allen Stanford was once worth over $2 billion before being taken down by the federal government in 2009 for operating a $7 billion ponzi scheme over two decades. Stanford is now serving 110 years in prison and is worth nothing. Recently, it came out that a court-appointed receiver has been able to recoup $1 billion for victims of Stanford’s fraud.

#3: Maurice “Hank” Greenberg

Hank Greenberg once touted a net worth of more than $3 billion by running the world’s largest insurance company, AIG. Greenberg did so well for himself the New York Times published a piece in 2000 saying Greenberg was a better bet than Buffett. But Greenberg was forced out of the company he nourished five years later over an investigation into a creative accounting scheme that padded AIG’s earnings, misleading investors and government regulators. The 97-year-old businessman is in the midst of a comeback as the CEO of Starr Insurance Companies.

#2: Eddie Lampert

Businessweek called Eddie Lampert the next Buffet in 2004 for saving KMart stores after bankruptcy. Two years later, his net worth was listed at $3.8 billion. Lampert attempted to strike it big again, this time with Sears, where he served as CEO for five years until the company filed for bankruptcy. His hedge fund ESL Investments ended up winning a bankruptcy auction to become the owner of the former retail heavyweight. But he was quickly sued for ransacking the company’s assets prior to bankruptcy. Sears scored a $175 million settlement from Lampert and company this year. Today, Sears only has a handful of stores throughout the U.S. and Lampert’s net worth is down to around $1 billion.

#1: Elizabeth Holmes

Theranos founder Elizabeth Holmes topped Forbes’ list of “Richest Self-Made Women” in 2015 with a net worth of $4.5 billion. The company made claims it could do hundreds of medical tests with a single drop of blood. Holmes was even featured in an Inc. Magazine cover story calling her the next Steve Jobs. In the end, the Theranos claims were bogus, Holmes’ net worth vanished and she’s now facing an 11-year prison sentence for defrauding investors in the scheme.

SIMONE DEL ROSARIO:

BEING A HIGHLY TOUTED, UP-AND-COMING BILLIONAIRE *SEEMS GREAT, BUT IS BEING CALLED “THE NEXT WARREN BUFFETT” A COMPLIMENT OR A CURSE? HERE ARE THE HYPED-UP BILLIONAIRES THAT WENT BUST IN THIS WEEK’S FIVE FOR FRIDAY.

LET’S START WITH THE MAN WHO’S ALL OVER THE NEWS, FTX FOUNDER SAM BANKMAN-FRIED. HE WAS WORTH AN ESTIMATED $16 BILLION THIS YEAR AND FORTUNE EVEN MUSED IF HE’S THE NEXT WARREN BUFFETT. MERE MONTHS LATER, FTX IS BANKRUPT, BEING INVESTIGATED BY THE SEC AND DOJ, AND BANKMAN-FRIED IS FLAT-OUT BROKE.

FINANCIER ALLEN STANFORD WAS WORTH OVER $2 BILL BEFORE HIS HOUSE OF CARDS CAME CRASHING DOWN. IN ‘09 THE FEDS GOT HIM FOR OPERATING A $7 BILLION DOLLAR PONZI SCHEME OVER 2 DECADES IMPACTING 18,000 INVESTORS. HE’S NOW SERVING 110 YEARS IN PRISON AND IS WORTH NOTHING. HERE’S THE SLIGHTEST SILVER LINING, COURTS HAVE SO FAR RECOUPED A BILLION DOLLARS FOR VICTIMS.

MAURICE “HANK” GREENBERG TOUTED A NET WORTH OF MORE THAN $3 BILLION RUNNING THE WORLD’S LARGEST INSURANCE COMPANY A-I-G. A 2000 NEW YORK TIMES ARTICLE PITTED HIM AND BUFFETT AGAINST EACH OTHER, SAYING GREENBERG GETS BETTER RETURNS! BUT GREENBERG WAS FORCED OUT FIVE YEARS LATER OVER AN INVESTIGATION INTO SOME “CREATIVE” ACCOUNTING THAT INFLATED THE COMPANY’S EARNINGS. THE BUSINESSMAN STAGED A COMEBACK, THE NOW-97 YEAR OLD IS THE CEO OF STARR INSURANCE COMPANIES.

BUSINESSWEEK CALLED EDDIE LAMPERT THE NEXT BUFFETT IN 2004 FOR SAVING THE ONCE-BANKRUPT KMART, AND TWO YEARS LATER HE WAS WORTH NEARLY $4 BILLION {$3.8B IN 2006}. LAMPERT TRIED TO CATCH LIGHTNING IN A BOTTLE TWICE WITH SEARS, SERVED AS CEO FOR 5 YEARS TIL SEARS FILED FOR BANKRUPTCY, AND THEN HIS HEDGE FUND WON THE BANKRUPTCY AUCTION. BUT THEN HE WAS SUED FOR RANSACKING SEARS ASSETS BEFORE BANKRUPTCY. THEY JUST SETTLED THE CASE THIS YEAR, YOU KNOW WHERE SEARS IS TODAY AND LAMPERT IS ONLY WORTH A PALTRY BILL THESE DAYS.

BACK IN 2015, ELIZABETH HOLMES TOPPED FORBES LIST OF RICHEST SELF MADE WOMEN WITH A NET WORTH OF $4.5 BILLION. HER COMPANY THERANOS CLAIMED IT COULD DO HUNDREDS OF MEDICAL TESTS WITH A SINGLE DROP OF BLOOD, SCORING HER AN INC. MAGAZINE COVER CALLING HER THE NEXT STEVE JOBS. BUT IT WAS ALL A CROCK, HER NET WORTH VANISHED AND SHE’S FACING AN 11 YEAR PRISON SENTENCE FOR DEFRAUDING INVESTORS IN THE SCHEME.

IT SURE SEEMS LIKE YOU DON’T WANNA BE THE “NEXT” ANYTHING. JUST BE YOU. THAT’S FIVE FOR FRIDAY. I’M THE NEXT SIMONE DEL ROSARIO. IT’S JUST BUSINESS.

Stepping into the limelight as the next up-and-coming billionaire brings a lavish lifestyle and a lot of media attention. But is being called the next Warren Buffett or Bill Gates a compliment or something else? Some wonder if being compared to the Oracle of Omaha in print is a curse, similar to the Sports Illustrated cover jinx or Madden curse in sports. Here are the hyped-up billionaires that went bust in this week’s Five for Friday.

#5: Sam Bankman-Fried

Just a few months ago, FTX founder Sam Bankman-Fried was getting mountains of attention. He had an estimated net worth of $16 billion and Fortune ran a cover story pondering whether he was the next Warren Buffett. Mere months later, FTX is bankrupt and under investigation by the Securities and Exchange Commission and Department of Justice while Bankman-Fried has lost it all.

#4: Allen Stanford

Financier Allen Stanford was once worth over $2 billion before being taken down by the federal government in 2009 for operating a $7 billion ponzi scheme over two decades. Stanford is now serving 110 years in prison and is worth nothing. Recently, it came out that a court-appointed receiver has been able to recoup $1 billion for victims of Stanford’s fraud.

#3: Maurice “Hank” Greenberg

Hank Greenberg once touted a net worth of more than $3 billion by running the world’s largest insurance company, AIG. Greenberg did so well for himself the New York Times published a piece in 2000 saying Greenberg was a better bet than Buffett. But Greenberg was forced out of the company he nourished five years later over an investigation into a creative accounting scheme that padded AIG’s earnings, misleading investors and government regulators. The 97-year-old businessman is in the midst of a comeback as the CEO of Starr Insurance Companies.

#2: Eddie Lampert

Businessweek called Eddie Lampert the next Buffet in 2004 for saving KMart stores after bankruptcy. Two years later, his net worth was listed at $3.8 billion. Lampert attempted to strike it big again, this time with Sears, where he served as CEO for five years until the company filed for bankruptcy. His hedge fund ESL Investments ended up winning a bankruptcy auction to become the owner of the former retail heavyweight. But he was quickly sued for ransacking the company’s assets prior to bankruptcy. Sears scored a $175 million settlement from Lampert and company this year. Today, Sears only has a handful of stores throughout the U.S. and Lampert’s net worth is down to around $1 billion.

#1: Elizabeth Holmes

Theranos founder Elizabeth Holmes topped Forbes’ list of “Richest Self-Made Women” in 2015 with a net worth of $4.5 billion. The company made claims it could do hundreds of medical tests with a single drop of blood. Holmes was even featured in an Inc. Magazine cover story calling her the next Steve Jobs. In the end, the Theranos claims were bogus, Holmes’ net worth vanished and she’s now facing an 11-year prison sentence for defrauding investors in the scheme.

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