Yahoo Finance The mighty fell in 2018, from Manafort to Moonves
If you savor schadenfreude, 2018 was your year.
Technology stocks that used to only go up plunged by double digits. CEOs who once seemed bulletproof got the boot, and lost millions of dollars. And political tough guys accustomed to pushing people around are now headed for prison—which might portend even more dramatic downfalls in 2019.
Let’s run through a short list of the 2018 downfallen:
Facebook was more like Faceplant in 2018—and its wipeout was largely self-induced. After the 2016 elections, CEO Mark Zuckerberg famously said it was “crazy” to think Russian operatives or other manipulators could have used Facebook to influenced the presidential election outcome. But now, multiple investigations have shown Russian propagandists operated thousands of accounts on Facebook and other social-media sites, most of them supporting Donald Trump’s candidacy and attacking Hillary Clinton’s. Among other things, those efforts tried to discourage blacks and Hispanics—who would have tilted toward Clinton—from voting.
Two things are dismaying about Facebook’s unwitting role in voter suppression. First, the company had no idea what was happening on its platform, despite its supposed mastery of data. Second, top leaders including Zuckerberg and chief operating officer Sheryl Sandberg have been defensive and tin-eared about objections to their exploitation of user data. Facebook stock is down 20% for the year and 34% from its July peak, and may not recover for years.
Other tech high-flyers swooned this year, including Apple (down 4% for the year), Google parent Alphabet (down 2%), Nvidia (down 26%) and Intel (down 5%). Some of these declines reflect a new reckoning about the ways tech companies exploit the personal data of their users and customers. Big Tech has also shown it can get on the wrong side of consumer trends. Most of these companies will recover, but the aura of invincibility is gone.
Leslie Moonves, the former CEO of CBS, was once considered a media titan vital to CBS empire as it fought a control battle with the Redstone family. Now he’s out, following allegations of sexual misconduct and retribution against women who spurned his advances. CBS recently said it will deny a $120 million severance payment Moonves’s contract called for, since he violated company policy while trying to cover up his misdeeds.
Carlos Ghosn was the globe-hopping chairman of the Nissan Renault automotive alliance—until he was thrown in jail in November for alleged financial improprieties.
Steve Wynn was a casino magnate whose name was plastered all over Las Vegas and other gambling meccas—until the Wall Street Journal uncovered a history of sexual abuse against company employees, and others. Wynn left his namesake company in February as accusations snowballed.
Paul Manafort got away with fraud and tax evasion for years, while working as an election consultant for strongmen in Ukraine and elsewhere. The veteran political operative joined the Trump campaign and became its chairman in 2016. But the highly visible position brought new scrutiny to his foreign dealings, and an investigation by special counsel Robert Mueller. Manafort was so sure he’d survive Mueller’s inquiry that he tampered with witnesses, lied to the FBI and violated a cooperation agreement with prosecutors. He’s now headed to jail for at least 10 years for committing 10 crimes—unless President Trump pardons his former campaign manager.
Michael Cohen. Donald Trump’s former lawyer famously said he’d “take a bullet” for his boss—and he did, figuratively. Cohen is headed to jail for three years for fraud, tax evasion and two campaign-finance violations—the hush-money payments to two women Trump allegedly had affairs with. In an astonishing change of heart, Cohen says now that he lied on behalf of Trump “out of loyalty to him. I followed a bad path…. I am done being loyal to President Trump.”
Who’s next? There are probably still many prominent business and cultural leaders who have sexual-harassment skeletons in their closet. It seems easy to predict there will be more downfalls in 2019.
As for the Trump scandals, the obvious question is whether the president himself will survive them. Prosecutors have already implicated Trump in the same campaign-finance crimes Cohen pled guilty to. Trump family members and senior employees had multiple communications with Russians while he was running for president, which may be crimes. Prosecutors are also looking into possible tax evasion at Trump’s businesses, and probing for other irregularities. The mighty may fall in 2019, too.
Confidential tip line: rickjnewman@yahoo.com. Click here to get Rick’s stories by email.
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Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success”
