5 Crazy Corporate Scandals So Far in 2017

corporate scandalsSo far in 2017, there have already been an inordinate number of corporate scandals -- and we're only at the beginning of the fourth quarter.

Social media has proven a new, powerful force in airing out bad company policies. But classic scandals like tax fraud and price collusion have already reared their ugly heads this year.

Here's a look at five crazy corporate scandals that happened in 2017...

No. 5: United Continental Holdings Inc.

corporate scandals 2017United Continental Holdings Inc. (NYSE: UAL) was plagued by corporate scandal after a video of a forcible, bloody removal of a passenger on an overbooked flight on April 9 went viral. As of today (May 15), the video's been viewed over 5 billion times.

The incident disgusted airline customers across the globe. Protesters took to social media, posting images of their cut-up United credit cards.

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After releasing an uninspired apology for "having to re-accommodate" the passenger that sparked even more outrage, United CEO Oscar Munoz apologized profusely for the incident, but the damage had already been done.

United stock took a hit. Shares in UAL slipped more than 4% on April 11, just two days after the incident, and the company's market value plummeted by $1 billion.

The feds even got involved. On May 2, Munoz was grilled by Washington lawmakers over how United handled the situation. A U.S. Senate panel held a separate hearing May 4.

No. 4: Caterpillar Inc.

Caterpillar Inc.'s (NYSE: CAT) Illinois headquarters was raided by federal authorities in early March, sending its stock tumbling almost 4%.

CEO Jim Umpleby was quick to defend his company's innocence. "We were surprised by today's actions primarily because we have been so cooperative with authorities," he said in an internal statement after the raid.

However, after just a few days, news broke that the company had been investigated for serious tax and accounting fraud - all stemming from a whistleblower leak back in 2009.

"The company's noncompliance with rules was deliberate and primarily with the intention of maintaining a higher share price. These actions were fraudulent rather than negligent," reported Leslie Robinson, the author of the report commissioned by the government that led to the raid.

The report found that the heavy-machinery company returned an estimated $7.9 billion in funds structured as loans that it did not report for tax or accounting purposes, according to The New York Times.

No. 3: Perrigo Co.

American pharmaceuticals company Perrigo Co. (NYSE: PRGO), the world's largest manufacturer of over-the-counter drugs, found itself at the center of a corporate scandal on May 2.

According to a report by Bloomberg, the drug distributor's office was searched by the Department of Justice as part of a wide-ranging investigation into possible price collusion in the generic drugs business.

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Price collusion is when companies conspire together to create an unfair market advantage.

Drugs made by the company were part of the probe. The government has been looking at the price of skin drugs made by Perrigo and a handful of others, according to a Feb. 28 document filed in court. About a dozen other big pharma companies have disclosed they've received subpoenas related to drug pricing as well, including Mylan NV (Nasdaq: MYL), who was part of the notorious EpiPen price scandal last year.

Shares of PRGO dipped 3% after news of the raid and are currently down 9.86% year to date.

No. 2: American Airlines Group Inc.

If you thought United was the only airline in hot water these days, think again!

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American Airlines Group Inc. (Nasdaq: AAL) experienced a corporate scandal after a woman was thrown off of one of its planes on April 22 -- after a flight attendant allegedly whacked her with her baby's stroller, almost hitting the baby in the process.

Even worse, the accused attendant then went on to threaten and try to physically fight another passenger who defended the injured mother...

"OMG. Flight attendant violently took a stroller from a lady with a baby on my flight, hitting her and just missing the baby. Then he tried to fight a passenger who stood up for her!" This was the caption posted online by a witness of the incident just minutes after the altercation, along with a three-minute video clip.

American issued a press release shortly after the clip went viral, saying, "What we see on this video does not reflect our values or how we care for our customers.''

But it was too late....

AAL stock slipped over 8% after the news - from $46.40 to $42.77 in just one day.

No. 1: Uber Technologies Inc.

uber scandalTechnology and transportation giant Uber has not had a good 2017 so far.

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On Jan. 28, the day that President Trump signed his executive travel ban, thousands of protests broke out at airports across the country. To the dismay of protesters, Uber CEO Travis Kalanick - who was part of Trump's Economic Advisory Council at the time - directed his staff to continue working during the events.

However, the answer did not resonate with consumers, and the hashtag #DeleteUber began trending on social media site Twitter.

On Feb. 2, Kalanick resigned from the Economic Advisory Council.

But Uber's nightmare had just begun...

Just two weeks later, on Feb. 19, a former Uber employee outed the company for widespread, severe sexual harassment in the workplace, and #DeleteUber started trending again on Twitter.

Ultimately, at least half a million users deleted their existing Uber accounts and swore off using the service, according to a March 22 report by Mashable.

As a result, Uber suffered a string of high-profile resignations. Vice president for product and growth Ed Baker, company president Jeff Jones, and head of communications policy Rachel Whetstone all resigned in the space of a month.

In August, former Expedia CEO Dara Khosrowshahi became the new CEO of Uber. Since then, Uber has been denied a license in London (effectively banning the company there), been accused of using a "secret tool" to sidestep governments, and has lost its UK boss, Jo Bertram.

What's next for Uber? Only time will tell, but for now the company is staring down a terrible PR problem that may haunt it for years.


The Top Craziest Corporate Scandals of 2017

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