Global Crossing

Global Crossing is a communication services company that filed for bankruptcy protection amid an accounting scandal where it had allegedly inflated earnings by using capacity swaps, among other things. Capacity swaps are the exchange of telecommunications capacity between carriers that is booked as revenue without money ever being exchanged.

The Global Crossing scandal happened about the same time as the downfall of Enron, a U.S. energy-trading and utilities company that perpetuated one of the biggest accounting frauds in history. In early 2002, Global Crossing's bankruptcy was the fourth largest in U.S. history. In 2005, it settled with the Securities and Exchange Committee (SEC), having been determined that it did not comply with numerous accounting laws and is to refrain from violating any other accounting laws.