A recent review by vpnMentor examining 25 years of corporate scandals has shed light on how fraud, data misuse, and regulatory violations have significantly impacted business operations and risk management strategies. The study analyzed 58 companies embroiled in major scandals, distinguishing between those that collapsed and those that adapted to survive.
Companies That Failed to Survive Scandals
Several high-profile companies ceased operations following scandals. Notable examples include Lehman Brothers, whose bankruptcy in 2008 remains the largest in U.S. history due to its exposure to failing mortgage-backed securities. Cambridge Analytica shut down after it was revealed that the company had improperly collected Facebook user data. FTX filed for bankruptcy amid allegations of misusing customer funds. Other companies like Wirecard and Financial Advisory Consultants ceased operations following allegations of accounting fraud and Ponzi schemes. Countrywide Financial, a significant player in the subprime mortgage crisis, was absorbed by Bank of America.
Companies That Survived Scandals
Despite significant fallout, vpnMentor found that the majority – 41 companies – continued to operate following their scandals. Boeing addressed the fallout from the 737 Max crashes, while Epic Games settled allegations related to children’s privacy. General Motors paid penalties for vehicle defects but maintained its market presence. Notably, some companies, such as Johnson & Johnson, Herbalife, and Monsanto, reached their highest stock prices after the scandal broke, indicating their ability to overcome the setbacks.
Business Risks on the Horizon
These findings coincide with growing concerns about operational risks globally. The Allianz Commercial Risk Barometer for 2025 identified cyber incidents as the most significant business risk for the fourth consecutive year. Based on a survey of 3,778 executives across 106 countries, the report found that 38% of respondents ranked cyber risks – including breaches and ransomware attacks – as their top concern. Business interruption, often stemming from cyberattacks, natural disasters, and supply chain disruptions, was ranked as the second most pressing concern. Natural catastrophes placed third, reflecting another year of extreme weather events and significant insured losses surpassing $100 billion. Climate change concerns moved into the fifth position, reaching the highest level recorded in the Risk Barometer’s 14-year history. Regulatory and legislative changes ranked fourth, with an emphasis on rising compliance costs associated with privacy laws, environmental disclosures, and cybersecurity requirements.
The analysis also indicated that some businesses faced minimal disruption from allegations. For instance, PayPal’s Honey extension and Google’s AdSense program, while criticized, experienced limited financial impact. As the business landscape continues to evolve, understanding the lessons from past scandals and addressing emerging risks will be crucial for companies to navigate future challenges effectively.
