Top 10 Business Blunders

10. Goldman Sachs’ Muppetgate

We’ve all fantasized about quitting our jobs in dramatic fashion, but Greg Smith may be the first person to ever do it via an op-ed in the New York Times. Smith left his job as an executive director and derivatives trader at Goldman Sachs in March, but didn’t go quietly. Instead, he wrote a scathing review of the culture at his former firm titled, “Why I Am Leaving Goldman Sachs.” In it, he describes an atmosphere in which employees were encouraged to rip off and mislead clients (whom he claims were derogatorily referred to as “muppets”) as long as it meant higher profits for Goldman. Though the piece was criticized by many in the financial press as inflammatory and evidence of naiveté on Smith’s part, the episode was another in a series of black marks the company has suffered over the past couple of years.

9. Walmart’s Mexican Bribery Scandal

Walmart’s dominance of the U.S. retail industry is the stuff of legend, and over the past couple of decades, the retailer has had success replicating that growth in the international market. In fact, if Walmart’s international business were a separate company, it would rank as the third largest retailer in the world. But in 2012 we learned that some of that international growth was likely fueled in part by bribery. In April, the New York Times published an exposé on Walmart’s efforts to expand in Mexico, alleging that the firm paid out $24 million to local Mexican officials to obtain building permits across the country. The Justice Department, the SEC and Mexican officials are still investigating the matter, but in the end it could spell huge fines for the world’s biggest retailer, both for infringing securities laws and for violating the Foreign Corrupt Practices Act.

8. Apple and Book Publishers Collude to Raise E-Book Prices

When the Justice Department sued Apple and five of the nation’s largest publishers for anti-competitive behavior, it seemed a bit counterintuitive. Isn’t Amazon the real monopoly in the e-book business? Amazon may dominate the market, but it was those publishers that illegally colluded with one another and Apple to force a so-called agency model on e-booksellers, according to the Justice Department. In this model, the publishers set the retail price and the sellers took a commission. This enabled the publishers to raise the price of e-books and turn customers away from Amazon’s practice of pricing many books at $9.99, a model that the publishers thought was unsustainable. Of course, colluding to raise prices — even if it’s to combat the market power of a dominant competitor — is a big no-no, according to the Justice Department. Three of the publishers have settled with Justice, but Macmillan and Penguin will fight it out in court in 2013.

7. The Chesapeake Energy Corporate-Governance Scandal

When Forbes called Chesapeake Energy CEO Aubrey McClendon “the world’s most reckless billionaire,” it was referring to his penchant for expanding the natural gas business with massive debt-fueled purchases. But in 2012, a series of stories emerged that suggested McClendon was reckless when it came to commingling his personal finances and those of the publicly traded firm he managed. According to several reports in Reuters, McClendon was compensated by his board with stakes in some of Chesapeake’s gas wells, and then borrowed against those stakes without notifying shareholders. It was also revealed that he ran a hedge fund from 2004 to 2008 that traded in natural gas while being privy to sensitive, private information about the market. And in 2010, he had $3 million worth of work done on his private residence by Chesapeake employees. McClendon has since been removed as chairman of the firm, but he remains in place as CEO while facing several shareholder lawsuits and investigations into possible securities fraud.

6. Never-Ending European Debt Crisis

The European debt crisis didn’t begin in 2012, but it was the year when it became clear that the European Union’s plan of bailouts in exchange for austerity measures was, to put it lightly, unsustainable. Greece’s budget cutting has consistently fueled sharper contractions in its GDP, causing budget deficits to grow rather than shrink. A similar dynamic is playing out in Spain as well. But the leadership of the E.U. continues to hope against hope that something — besides a change in policy, of course — will turn the tide and end the vicious cycle of austerity and contraction.

5. Apple Drops Google Maps from the iPhone

When Apple discarded the Google Maps app from its latest iPhone operating system, replacing it with its own proprietary application, its executives must have thought the move would be a hit. After all, Apple Maps offered turn-by-turn navigation and a cool-looking 3-D design. Of course, they forgot one very important part of an effective map application: it has to correctly identify, you know, where things are. Some of the worst offenses of the app following its release included turning the entire east side of Portland, Ore., into a nature park and misplacing the capital of Sweden by 15 miles. The poor quality of the app led to a written apology from CEO Tim Cook: “We are extremely sorry for the frustration [the app] has caused our customers and we are doing everything we can to make Maps better.”

4. JPMorgan’s $9 Billion Trading Loss

Jamie Dimon was one of the few bankers to emerge from the financial crisis with his stellar reputation intact. Dimon took the helm of JPMorgan Chase in 2005 and ably steered the bank through the crisis. In its aftermath, he used his reputation to argue against increased regulations, especially efforts to force banks to increase their capital cushions. But Dimon’s anti-regulatory stance was seriously undermined when a trader in JPMorgan’s chief investment office began building up positions in the credit derivatives market, which eventually lost the bank upwards of $9 billion, according to some estimates. The trading debacle renewed calls for a strict implementation of the Volcker Rule, which prohibits banks from gambling in the market with federally insured deposits, and led to the end of chief investment officer Ina Drew’s career at JPMorgan — concluding one of the most successful careers ever for a woman on Wall Street.

3. Standard Chartered Fined for Money Laundering

When British-based multinational bank Standard Chartered was formally accused by New York State’s Department of Financial Services of laundering money from Iranian clients and then obstructing investigations into its behavior, it was the first banking scandal of the year in which regulators caught as much flak from the press as the bank they went after. Critics accused DFS head Benjamin Lawsky of jumping out ahead of a joint investigation by state and federal regulators and abusing the department’s ability to unilaterally revoke the bank’s New York State charter to extract a $340 million fine. Though Lawsky’s action raised the ire of his fellow regulators, no evidence emerged to show that Standard Chartered wasn’t guilty of the crimes alleged. In fact, a recent report in Reuters said the bank expects to announce another settlement with federal regulators by the end of the year.

2. Facebook IPO

The Facebook IPO was supposed to be one of the biggest debuts of the new century, setting up the world’s largest social network to be a $100 billion public company. While Facebook was briefly valued over the $100 billion mark, a series of stumbles led to the stock’s plunge from its initial price point of $38 per share to nearly half that amount today. Technical glitches at Nasdaq delayed trading of the stock during its debut, which Facebook claims shook confidence in the stock; Nasdaq later offered brokers $40 million in compensation for losses attributed to the delay. But the stock was clearly priced too high on the encouragement of Facebook CFO David Ebersman. To make matters worse, there are several lawsuits making their way through the courts that allege that the underwriters of the offering selectively informed investors that they were cutting the earnings forecast for the firm before the stock debuted.

1. LIBOR Rate-Rigging Scandal

The London interbank offered rate, or LIBOR, is an average of the interest rates that large financial institutions pay to borrow money, and it is used around the world as a benchmark for pricing trillions of dollars of financial instruments like corporate debt and student loans. This infrastructure of the global financial system remained in the background until it was revealed that several banks — including British megabank Barclays — were submitting false rates in order to signal to the market that they were healthier than they actually were and potentially influence the rate in order to profit off proprietary trades. The scandal further tarnished the reputation of the global financial industry, leading the normally business-friendly Economist to question whether finance had a “rotten heart.”