A BusinessWeek investigation uncovers multiple accounting abuses by Bausch & Lomb, sparking a Securities & Exchange Commission investigation. The company later admitted that it had overstated income by $17.6 million and settled a shareholder lawsuit for $42 million.RITE AID, NOV. 11, 1999
KPMG resigns as auditor for Rite Aid (RAD
), saying it cannot rely on the drug chain's numbers. Almost a year later, Rite Aid announced that it had overstated revenues for fiscal 1998 and 1999 by over $1 billion. In August, the company settled a suit with shareholders, but the SEC is still investigating.CENDANT, DEC. 7, 1999
Cendant agrees to pay $2.83 billion to shareholders after internal audits revealed CUC International--which merged with HFS to form Cendant in 1997--inflated income by $500 million through fraud and accounting errors. Cendant later accepts a $335 million settlement from CUC auditor Ernst & Young.SUNBEAM, MAY 15, 2001
The SEC files suit against Albert J. Dunlap and four other former Sunbeam (SOC
) executives, alleging accounting fraud. Earlier, auditor Arthur Andersen settled a shareholder suit for $110 million, while Dunlap settles for $15 million in January, 2002.WASTE MANAGEMENT, JUNE 19, 2001
Arthur Andersen agrees to pay a $7 million fine after the SEC charges it with issuing false and misleading reports on behalf of Waste Management. The reports overstated income from 1992 to 1996 by more than $1 billion. Andersen also paid part of a $229 million settlement with shareholders.ENRON, DEC. 2, 2001
Enron files the largest bankruptcy petition in U.S. history amid revelations of off-balance-sheet partnerships headed by company execs and other accounting irregularities. Six weeks earlier, Enron had restated earnings back to 1997, lopping off almost $600 million in profits.SUPERIOR BANK, DEC. 10, 2001
The Pritzker family agrees to pay the FDIC $460 million without admitting liability after the failure of Superior Bank. The prominent Chicago family had been part-owners of Superior. Meanwhile, regulators begin investigating possible miscalculations of the bank's assets.DOLLAR GENERAL, JAN. 15, 2002
Shares of Dollar General drop 13% after the company reduced earnings for the past three years by almost $200 million. The retailer took a fourth-quarter, 2000, charge of $162 million to settle shareholder suits over its accounting missteps.
Corrections and Clarifications
"Accounting failures aren't new--just more frequent," the timeline graphic accompanying "Accounting in crisis" (Special Report, Jan. 28), misidentified the lawsuit Ernst & Young settled for $335 million. The suit they settled was with shareholders. They are still in litigation with Cendant.