Valeant shares fell another 6.5 percent in Thursday’s session, leaving the stock down more than 70 percent in the past three months. The company has been suffering from allegations of price gouging, shady business dealings and perhaps the two words that shareholders of any company fear the most: “accounting fraud.”
While investigations into the significance of Valeant’s relationship with Philidor remain ongoing, the market seems to have rushed to judgement that Valeant will ultimately be found guilty of some degree of wrongdoing.
Assuming the allegations of accounting fraud are true, will Valeant’s stock inevitably go the way of disgraced, bankrupt and de-listed Enron and WorldCom? Not necessarily. Here are five big-name stocks that survived accounting scandals, using data complied by Market Memory.
1. Waste Management, Inc WM 1.16%
Back in 1998, Waste Management reported $1.7 billion in falsified earnings, resulting in a $457 million class action settlement with shareholders and a $7 million SEC fine for the company’s auditor.
The stock lost more than half its value following the scandal, falling from above $37 to below $15 per share in late 2000. It took nearly 12 years, but the stock eventually rebounded to pre-scandal levels and now trades above $52.
2. Tyco International PLC TYC 3.26%
In 2002, two former Tyco CEOs were convicted of stealing $150 million and inflating the company’s income by $500 million. The CEOs were both jailed, and Tyco paid out $2.92 billion in legal settlements with shareholders.
Tyco’s stock lost more than 70 percent of its value that year, and to this day it remains down 68 percent from its price at the beginning of 2002.
3. Federal Home Loan Mortgage Corp FMCC 1.81%
Way back in 2003, Freddie Mac‘s president and several other top executives misstated…
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