Insuring Lust
AIG can't seem to find a faithful man
This Week In Blunders Nov. 9-15
“An affair wants to spill, to share its glory with the world. No act is so private it does not seek applause.” – John Updike
Global insurance giant American International Group was just about to welcome its new president to the office when a New York Times reporter called with a simple question:
Did AIG’s board know about the office romance that preceded his resignation at one of his last jobs? It’s not like it never made the news.
The company gave the NYT a prompt answer: John Neal “will no longer be joining the company due to personal circumstances.”
Doh!
Neal failed to disclose a romantic relationship with his executive assistant when he was CEO of Australian insurance giant QBE. In 2017, the board sanctioned him by cutting his bonus by $550,000. He resigned a few months later.
As president, Neal would have been in line to take over as CEO of AIG. Having served as CEO of Lloyds of London from October 2018 to January 2025, he would have been a solid successor to current CEO Peter Zaffino. Now he joins the Business Blunders list of Top CEOs Who’ve Kissed Away Their Jobs.
Neal appears to be a victim of human frailty. The executive he was set to replace went down in a much bigger scandal.
David McElroy faces three counts of sexual assault and one count of lewd and lascivious conduct in Lamoille County, Vt. He has pleaded not guilty.
In March 2024, he allegedly got a woman drunk at a corporate retreat with rounds of tequila and sexually assaulted her.
AIG didn’t mention any of that when it announced his “accelerated retirement” for “personal reasons” in May of last year.
Apparently sexual assault charges are personal.
It’s been a busy year for top executives losing their jobs to love, lust or worse:
Nestlé Crunch: In September, Nestlé fired its CEO, Laurent Freixe, for a romantic relationship with a subordinate.
Lost In Space: In July, Astronomer CEO Andy Byon famously got caught on the jumbotron at a Coldplay concert canoodling with his HR director. They both resigned.
Kohl’s Cash: In May, Kohl’s fired its CEO Ashley Buchanan after he reportedly gave his girlfriend a multimillion consulting contract without disclosing the relationship.
What’s with these guys? Haven’t they ever heard of a dating app?
Shareholders gave them multimillion-dollar compensation packages for their judgment. But it looks like the big bucks only clouded their judgment.
More bad faith from the Fed
Federal Reserve Board Gov. Adriana Kugler abruptly resigned in August.
Her mysterious departure gave President Donald Trump an opportunity to place one of his own guys at the central bank in his constant campaign to control the central bank.
Now we know why she left.
Kugler was caught making stock trades in violation of the Fed’s rules, according to a report that the U.S. Government Ethics Office released today.
This is not the first time Fed officials have had to resign for something like this.
In October 2021, we learned Fed Presidents Eric Rosengren of Boston and Robert Kaplan of Dallas traded stocks shortly before the Fed delivered pandemic relief to a panicked nation. They were cleared of wrong doing but resigned amid a lot of raised eyebrows.
Read More: ‘Losing Faith’ In Federal Reserve (Houston Chronicle, Al Lewis, 2021)
Fed officials suffer from the fatal conceit that they can control the economy. But sometimes they can’t even control themselves. They’re supposed to protect Americans from a rigged market, but sometimes they rig it for themselves.
Say it ain’t so
Online gaming has turned the wide world of sports into a rigged casino.
On Sunday, the Justice Department announced indictments against two Cleveland Guardian’s pitchers for rigging games.
First it was the NBA. Now it’s the MLB.
Read More:
Hi Yo Silver, Away (Business Blunders)
There’s No Such Thing As A Green Bank Or A Fair Game (Business Blunders)
“Luis Leandro Ortiz and Emmanuel Clase de la Cruz allegedly rigged their pitches in professional baseball games, so that an inner circle, and occasionally themselves, could quietly cash out their winnings,” said FBI Assistant Director in Charge Christopher Raia in a press release.
They’ve both pleaded not guilty. They’re both still getting paid while on “non-disciplinary leave.”
Professional sports can’t stop ripping off its fans.
Read More: If You Build It, Chumps Will Come (Business Blunders)
Taxpayers fund their venues. Public Universities serve as free farm teams. Ticket prices are unaffordable for many fans. Paid TV to watch at home is expensive and loaded with commercials. And now when we gamble on the games we can’t be sure it’s an honest bet.
Space cowboy
Ramesh Kris Nathan won’t be up for a Hugo Award this year, but he did craft science fiction that at least some investors found compelling.
Prosecutors allege that Nathan, 46, claimed his Relativity Research Fund was developing prototype spacecraft, advanced robotics and propulsion systems. He claimed the company had significant capital investments, worldwide offices with more than 15,000 employees, and tens of billions of dollars in profits and revenue.
“Ramesh Nathan spun fantastic tales about space travel technology and advanced robotics to entice investors into funding his company, but all he had to offer was science fiction.” said Acting United States Attorney Patrick Robbins in a press release.
On Thursday, a jury convicted him on six counts of wire fraud and two counts of money laundering. He faces up to 20 years in prison: Plenty of time to imagine the confines of a fictional spacecraft.
Don’t Miss These Blunders
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Getting Sondered Marriott screws its guests as its short-term rental partner files bankruptcy
Felons Fly Free Boeing beats criminal charges for its deadly 737 Max crashes only to be accused of more negligence in this week’s fatal MD-11 crash
White Pizza Seven years ago, Papa Johns’ founder resigned after making racist remarks. Today, the company is struggling with its damaged brand.
Dead Meat The hype on Beyond Meat was beyond reason. Note to investors: It’s mashed peas.
A Dead Billionaire Defaults Gary Winnick, the late founder of a failed telecom startup, sacks his lender from beyond the grave
Dr. Lie Erik Lie, a finance professor at the University of Iowa, catches cheats. His numbers don’t lie.
Hi-Yo Silver, Away NBA Commissioner Adam Silver placed a big bet on legalized sports gambling. He didn’t anticipate the alleged corruption that came with it.
There’s No Such Thing As A Green Bank Or A Fair Game Banking is corrupt. Basketball is corrupt. This week’s news blows it all out in the open.
Too Big To Jail Jeffrey Epstein couldn’t have done it without America’s biggest banks, a new lawsuit alleges. Watch them settle quietly and move on.
Parts Is Parts A secretive billionaire just exited from one of the biggest corporate scandals in years. It began with auto parts.
Go Suck A Lemon Lululemon has a message for its loudmouth founder, and it’s not namaste
Ain’t No Billionaire’s Son David Bren, the disowned son of the nation’s richest real estate mogul, sold his investors the ‘ultimate man cave.’ Then he caved.
Power Outage Illinois’ longest-serving House Speaker will start serving prison time for his ComEd bribery scheme
Wickedness On Wall Street Renowned financier Howard Rubin and his assistant were arrested for alleged sex-trafficking in a sex dungeon
Bible Lessons From A Billionaire Silicon Valley investor Peter Thiel says we should worry about the Antichrist. He would know.
Get That Mouse Out Of The House Disney will pay a price for suspending Jimmy Kimmel, but how much?
Lap Dance Dollars Executives from world’s largest publicly traded strip club company allegedly bribed a public auditor to dodge $8 million in sales taxes
From Baby Shower To Prison Shower Ian Gregory Bell celebrated with 75 guests. Six days later, he got three years.