Occasionally, firms earn such a negative reputation that innocent employees are unfairly stigmatized just by having the company's name on their resume. Although most employees had nothing to do with the poor reputations of their former firms, many job seekers feel that the negative aura of these firms makes it a little more difficult to find their next job. Here are five companies you might want to leave off your resume.
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1. Enron Corporation
Enron is a now defunct company was at the center of one of the most famous corporate scandals in history. The enormity of the company's improprieties caused the Enron name to become virtually synonymous with white collar crime. Enron's stock price fell from over $90 in August 2000 to 12 cents in January 2002. The company filed for Chapter 11 bankruptcy protection in December 2001.
The accounting schemes perpetrated inside Enron were very complex, often involving multiple legal entities and highly questionable accounting treatments. Several Enron executives were charged with illegal actions, including Enron CEO Jeffrey Skilling, who was convicted of multiple charges related to Enron's collapse. Although only 19 executives pleaded guilty or were convicted for their part in the scandal, Enron had more than 20,000 employees before the scandal hit. This means that many innocent employees likely suffered from their former employer's tainted reputation. Enron scandal is considered to be one of the main causes for the passage of the Sarbanes-Oxley Act of 2002 which imposed strict new reforms aimed at preventing Enron-style abuses. (For related reading, check out Enron's Collapse: The Fall Of A Wall Street Darling.)
2. Bernard L. Madoff Investment Securities, LLC
Bernard Madoff is another toxic name for a resume thanks to its connection with securities fraud. Madoff, 72, is serving a 150-year prison term after pleading guilty to running the biggest Ponzi scheme in history from his firm, Bernard L. Madoff Investment Securities LLC.
Unfortunately for Madoff's former employees, most people are unaware that Madoff's firm had a separate, completely legitimate trading operations division that engaged in market-making activities. Before Madoff's arrest, this branch of the company had approximately 120 employees. The division was sold in early 2009 to a Boston-based brokerage firm for $15 million; the remaining employees were dismissed. Only one of Madoff's employees has ever been charged of a crime related to the Ponzi scheme, but you can bet that the notoriety surrounding Madoff's scheme could make it difficult for any former employees to land positions in the financial industry.
3. Galleon Group
The Galleon Group managed approximately $3.7 billion spread across several hedge funds. In late 2008, the company found itself at the center of an insider trading case involving the firm's founder, Raj Rajaratnam. Rajaratnam and a co-defendant, Danielle Chiesi, have been charged with conspiracy and securities fraud. They have denied wrongdoing. The firm's investment funds were dissolved following the charges in October 2009, as investors scrambled to withdraw their money.
The story continues to make news due to the high stature of the 21 people who have been charged in the insider-trading probe, 12 of whom have pleaded guilty to criminal charges. A number of quotations released from wiretaps have also drawn heavy attention to what has been called the largest hedge fund insider trading case in history. Because of the unresolved nature of this case, this could be an especially toxic company to have on one's resume. (For more, check out Top 4 Insider Trading Scandals.)
4. Arthur Andersen LLP
Arthur Andersen was a "Big 5" accounting firm with many Fortune 500 clients and over 85,000 employees worldwide. The firm's rapid downfall started in 2001 due the massive accounting scandals at Enron. Since an external auditor is hired to assure the accuracy of financial statements, these scandals essentially ended the firm's accounting practice.
The last nail in the coffin was a conviction for obstruction of justice for shredding documents pertaining to the Enron case. After this conviction, the firm was no longer legally able to perform public accounting services, and the firm surrendered its CPA licenses in 2002. This conviction was overturned in 2005, reinstating the firm's legal ability to practice public accountancy. However, although the company has neither been dissolved nor declared bankruptcy, the firm's reputation is likely preventing it from becoming a viable business again.
5. American International Group Inc. (A.I.G.)
A.I.G. is one of the few companies with such a poor reputation that has escaped bankruptcy. It's also the one company that's least likely to taint employees' resumes for years to come. Of course, A.I.G. almost certainly would be bankrupt if it were not for an $85 billion bailout loan from the U.S. federal government. Although the bailout was highly controversial, A.I.G. might have been able to dodge the brunt of the public ire had it not been for a further political misstep.
As it happened, A.I.G. had obligated itself to pay retention bonuses in order to hold onto its workforce through early 2009. According to the New York Times, a total of $165 million was to be paid to 463 executives. When these bonuses were made public, there was an intense outcry from U.S. politicians. Many of these politicians viewed A.I.G. as unjustifiably paying large bonuses when the firm owed its existence to taxpayer funds. A.I.G. executives even received death threats. As a result of what many view as an insensitive move on the company's part, A.I.G. has cemented an extremely negative reputation for itself. Whether it affects employees who seek out positions at other companies probably depends on how high up the corporate ladder they happen to be.
The Bottom Line
If you're searching for a job, hopefully you can at least count yourself lucky that you don't have to explain the presence of one of these worst companies on your resume. If you have worked for one of these firms, you may wish to obtain professional advice to help minimize the impact of that firm's negative reputation on your job searches. (For more, check out 7 Best Companies To Have On Your Resume.)
Catch up on your financial news; read Water Cooler Finance: The Ups And Downs Of A Double-Dip Recession.