Winners & Losers 2009: Saints & sinners

The rogues who boiled our blood, and the heroes who restored our faith in business.

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See also Gallows humour .

SAINT: Jim Flaherty

Provincial politicians can scream all they want: when it comes to moving forward with Ottawa’s controversial plan to create a single national securities regulator, Finance Minister Jim Flaherty is a hero for knowing it is time to act – even without countrywide support. With its history of scandals, ranging from Bre-X to Livent, this nation can no longer afford its reputation as a financial-sector backwater.

SAINT: Johanna Sigurdardottir

Iceland is famous for many things: the stunning beauty of its volcanic landscape, for example, and its idyllic natural hot springs. But after the country’s wildly over-indebted banking sector collapsed in late 2008, it has become more famous for its plunging currency, soaring inflation and unprecedented levels of unemployment. To clean up the mess, Icelanders have turned to an openly gay mother of two named Johanna Sigurdardottir. The new prime minister served most recently as social affairs minister and is seen widely as an inspirational figure whose approach is a sharp departure from the risky growth obsessions of her predecessors. She has promised to aggressively pursue any illegalities that contributed to the banking collapse, and to rebuild the floundering economy with the help of loans from the IMF.

SINNER: Richard Fuld

Richard Fuld, who led storied Lehman Bros. into sub-prime mortgages and bankruptcy, is a real piece of unrepentant work. On the anniversary of the brokerage failure that pushed world markets into panic mode last year, he was still blaming politicians and short sellers for the collapse. And that’s why a panel of U.S. business profs this year named him the worst American CEO “of all time.”

SAINT: Steve Jobs

Apple CEO Steve Jobs makes comebacks look easy. After launching the personal computing revolution, a dispute forced him out of the company he co-founded. But he was asked to return as an “adviser” in the mid-’90s, when he restored Apple’s lost shine with the revolutionary iMac. This year, after taking a leave of absence to undergo a liver transplant, Jobs made a personal comeback and has already shaken up the world by unveiling a new iPod nano with built-in video camera.

SINNER: Bernard Madoff

Former Nasdaq chairman Bernie Madoff makes Charles Ponzi look like a teenage shoplifter. To help his clients – victims of the largest investor fraud ever committed by an individual-U.S. authorities have been auctioning off his assets, ranging from a posh penthouse in Manhattan to Madoff’s personal navy, which included a 55-foot yacht named Bull. But the proceeds won’t come close to covering damages related to his $50-billion-plus Ponzi scheme. Madoff was sentenced to 150 years in prison in June.

SINNER: Earl Jones

If the allegations are true, what Earl Jones lacked in operational size, he made up for with dastardly tactics. Known as the mini-Madoff of Montreal, the disgraced former money manager was charged with fraud this summer after allegedly bilking about 160 people out of $75 million – not huge by today’s Ponzi standards. But Jones will always be notorious for picking up clients in hospitals and old-age homes and at funerals; his alleged victims include many elderly and disabled individuals, in addition to lifelong friends, employees and family.

SAINT: Mark Carney

Few people have had to hit the ground running like Mark Carney, governor of the Bank of Canada. When his predecessor, David Dodge, rode off into the sunset early last year, the U.S. sub-prime mortgage crisis had already hit and the credit markets were freezing. But thanks in part to Carney’s clear focus and calm monetary policy responses, this nation has fared much better than most through the global economic meltdown.

SAINT: Harry Markopolus

Nearly a decade before American authorities took a hard look at Madoff Securities, Harry Markopolus, then a relatively unknown Boston accountant, warned the U.S. Securities and Exchange Commission that it was impossible to legally make the profits reported by the now-infamous investment firm. In 2005, he sent a detailed report pointing out 29 red flags that suggested Bernie Madoff was running the world’s largest Ponzi scheme. Nobody listened. But Markopolus was right, which is why he is now a hero within the investment world.

SAINT: Alan Mulally

To stop General Motors and Chrysler from driving off a cliff, taxpayers in Canada and the United States were forced to fork over billions of dollars this year. But Ford didn’t put its corporate hand out. Under the visionary leadership of CEO Alan Mulally, it mortgaged all of its assets to ensure it had enough cash to avoid bankruptcy during a recession. As a result, he saved Detroit from losing the last of its independent automakers.

SINNER: Raja Rajaratnam

Billionaire Raja Rajaratnam managed to give American hedge fund managers an even worse reputation this year. In October, he was criminally charged after the FBI accused him of leading the biggest insider-trading ring ever prosecuted. Shortly after, the Galleon hedge fund founder was sued by victims of militants in his native Sri Lanka, who allege the Rajaratnam family foundation helped fund the Tamil Tigers.

SINNERS: Garth & Myron

It took years for the curtain to fall on the bookkeeping black comedy that was the Livent scandal. But the show is finally over, and despite years of denial, the two showboats who grounded the company, Garth Drabinsky and Myron Gottlieb, have been found guilty of accounting fraud. In August, Drabinsky was sentenced to seven years behind bars, while Gottlieb landed a six-year prison stint. Both have said they’ll appeal.

SAINT: Suze Orman

There can never be too many folks like personal finance guru Suze Orman, especially today. Central banks around the world are using low interest rates to stimulate the masses into stimulating national economies. And that has been inflating the consumer debt bubble, which is why Orman deserves credit for using her Oprah spots and CNBC show to warn overextended consumers to look after themselves first by reducing debt and saving for retirement. “The law of money goes like this,” she says. “Power attracts money. Powerlessness repels it. Debt makes you powerless.”

SINNER: Weizhen Tang

When this year started, Toronto’s Weizhen Tang was still known as the “Chinese Warren Buffett” and “king of 1% weekly returns.” That was before clients began complaining about missing the principle they invested. Today, facing a dozen criminal charges ranging from securities fraud to unregistered trading, Tang is now known as the financial adviser who, while insisting he did not steal any funds, still sent a letter to clients to apologize for “the sin that I had committed.” Hmm.

SAINT: Prem Watsa

Prem Watsa isn’t known as Canada’s Warren Buffett for nothing. The head of Toronto’s Fairfax Financial Holdings can play downturns with the best of them. After predicting a massive economic storm was going to create global turmoil, he rolled the company dice on credit default swaps that would make money if financial plays tanked. As a result, Watsa’s insurance and investment firm has generated a three-year return of more than 100% for shareholders during one of the greatest market crashes of all time. He made some bad calls on newspapers and forestry, but has recovered from those too.

SINNERS: Milowe Brost & Gary Sorenson

Alberta businessmen Milowe Brost and Gary Sorenson make the case for a national securities regulator in Canada. In September, the RCMP charged them with theft and fraud after accusing the duo of running the largest Ponzi-style hoax in Canadian history. Brost and Sorenson allegedly set up a commodities-based scam that ran for years and soaked thousands of investors for as much as $400 million.

SAINT: Jamie Dimon

Jamie Dimon is CEO of a bank, and that’s now a dirty four-letter word as far as many folks on Main Street are concerned. But Dimon runs JPMorgan Chase, which gave back its bailout money quickly and is the one big U.S. financial institution to emerge from the global financial meltdown with its reputation pretty much intact. After helping save Bear Stearns from a Lehman-like collapse, Dimon became known as Wall Street’s knight in shining Armani. But at the White House, where he is now frequently called upon for advice, he is simply known as Obama’s favourite banker and a possible future secretary of the treasury.

SINNER: Ken Lewis

Bank of America CEO Ken Lewis is being forced by Washington to retire without collecting any of the US$1.5 million in parting salary he had expected. But few tears are being shed for his loss, which is nothing compared to what BoA investors suffered over the past couple years. After all, with his pension and other exit-related compensation worth more than US$100 million, Lewis is being very well paid for a job not-so-well done.

Gallows humour

“When most people saw the headline ‘Goldman Sachs gets swine flu vaccine,’ they were super happy – until they read the word ‘vaccine.'”
— Amy Poehler

“President Obama hosted a conference of all the Native American tribes. I know the U.S. economy’s in bad shape, but Obama told the Indians, ‘Look, you can have the country back.'”
— Jay Leno

“J. Crew stock has gone up 10% because First Lady Michelle Obama has been spotted wearing their clothes. Which begs the question, Mr. Obama, how would you feel about wearing a Buick?”
— Conan O’Brien

“The federal government agreed on Sunday to provide an additional $30 billion to AIG. According to AIG, $15 billion will be used to build the world’s biggest toilet, down which the other $15 billion will be flushed.”
— Seth Meyers

“Today I was reading that they’re now putting an end to something called short selling, which is when you borrow stock that you don’t own and sell it, hoping that it will go down so that you can buy it back at a profit. This was legal, but pot smoking isn’t?”
— Bill Maher

“Hindsight is 20/20, which is why … Tories they all say the same thing. They say, ‘Ah, well, please … how could Stephen Harper have known we were in a recession?’ Well he could have read a newspaper, or asked my mother, or spoke to a cab driver but I guess, barring that, they’re right.
— Rick Mercer

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