While companies attempt to put on a friendly face to entice customers, things are often different behind the scenes as evidenced by 11 companies that caught lying to the public or deceived customers. The world has probably never been as competitive as it is right now. Every day, businesses start up and every day, businesses fold over. It’s a dog eat dog world, and only the most ruthless companies make it to the top. If you want to learn more about these ruthless companies, head on over to the 10 most ruthless companies in business today. One way companies gain an advantage over their competitors, and also their consumers, is by lying, which is why you’ll often see companies lying to public, often by employing misleading advertisements 2019. If you want to learn about false advertising examples 2019 and false advertising examples 2018, feel free to check out some of the crushing examples we presented in this article.
There is often a thin line between doing something unethical and illegal. Often, companies aim for the former, while engaging in the latter. If caught, they can face huge fines which could end up costing them billions of dollars in fines, and the lost trust of their customers. Some companies are able to navigate through this period, while others just fail and crumble. Of the companies caught lying to the public, many are now giants in their field and well-known companies in their own right.
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We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. We also publish lists like 10 stocks that went up during the 2008 crash and 10 countries that consume the most coffee to broaden our horizons and identify emerging trends in advance.
Did The Boeing Company (NYSE:BA) lie about 737 Max? What kind of legal and punitive penalties should we expect? Will this have any material effect on The Boeing Company’s long term stock price? You probably remember BP p.l.c. (NYSE:BP)’s Gulf of Mexico oil spill scandal from 2010. A BP executive told the public that only 5000 barrels of oil per day is leaking into the Gulf whereas independent scientists later on concluded that the actual figure was more than 60,000 barrels of oil per day. The public was so outraged about the oil spill and BP’s misrepresentation of the facts that Justice Department brought charges. Had the BP executive been found guilty, he could have faced a maximum prison time of 5 years. It’s been more than 9 years and BP’s stock’s performance has been similar to Exxon Mobil’s performance since then.
Corporations and their executives are rarely charged with criminal deception and lying. Most of the time these cases are settled out of court for a manageable financial penalty that’s paid by the stockholders (not the executives themselves) and the companies’ stocks usually resume their rise after a period of underperformance during the scandal.
It is common to see major companies fighting several lawsuits at the same time, with legal expenses making up a significant portion of their total expenses. Of course, many of them are quite frivolous, as people try to exploit the company in order to receive easy money, as companies try to avoid lawsuits which could damage their name or their brand. On the other hand, others are of a more serious natures, of which we’ll discuss more below. Out list of companies that caught lying to the public, deceived customers doesn’t include all the companies which have engaged in such activities, as that list would be never ending. Instead, we are going to mention some of the more interesting cases where companies engaged in questionable practices. So let’s start our list with number 11:
11. Facebook Inc. (FB)
Facebook is the biggest media company ever with around 2.5 billion unpaid part-employees who not only produce content for Facebook Inc. but also consume that content, view ads, and provide their private data for Facebook to exploit in countless ways. Facebook potentially lied to the public in 2018 during the Cambridge Analytica scandal. Nothing was proven in courts because Facebook settled and agreed to pay $5 billion but didn’t admit any wrongdoing.