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BBC Capital

The comeback kings

About the author

Bryan Borzykowski is a Toronto-based business writer and editor. He writes about personal finance, wealth issues and other money topics for BBC Capital and also contributes to the New York Times, CNBC, CNNMoney, Canadian Business and the Globe and Mail. He’s written three investing and personal finance books, too. Follow him on Twitter @bborzyko. 

  • The comeback kings

    History is filled with people who have been at the top of their game only to do something colossally dumb — or illegal — leading to a mighty fall or even disgrace.

    But instead of disappearing quietly after their 15 minutes of infamy, some one-time giants have come roaring back. For a select few, the second act is more successful than the first. What’s more, society has embraced and celebrated these comeback kings, their previous transgressions all but forgotten.

    Why do humans have such short memories? Psychology has the answer. People love a comeback story, said Simon Webley, research director at London’s Institute of Business Ethics.

    “It’s part of us,” he said. “It’s about not giving up.”

    Psychology also has some insights into why people fall from grace in the first place. It often comes down to a combination of bad judgment and feelings of superiority, said Hugh Arnold, a professor of organisational behaviour at Toronto’s Rotman School of Management.

    “People get big jobs, make a lot of money, they’re well known, they’re written up in the press, so they feel as if they’re beyond the rules,” Arnold said. Many times, they don’t realise they’ve adopted a cloak of ‘above it all’.

    These characteristics often lead to a fall — and are also instrumental in why many people stage successful comebacks. In some cases, those smarts and charm allow them to become even more successful than they were before their grand collapse.

    “It’s the same DNA that propelled them to these tasks that are helping them again,” said Joanne Henry, executive vice-president at Neuger Communications Group, a Northfield, Minnesota-based public relations firm. “There’s nothing in that DNA that says ‘let’s find a little corner and stay put’. They want to get back out there.”

    Here’s a look at the comeback kings of industry — and a fallen food maven who might just be on her way back. (Getty Images)

  • Michael Milken, junk bond king

    Rise to fame Michael Milken entered the world of finance in 1969 as a bond researcher and trader. When he started, he mostly worked with investment-grade fixed income. Around 1973, he convinced his then-boss to let him start a high-yield bond trading division which would buy and sell junk bonds. Junk bonds, not popular at the time, are risky since they have a higher chance of default than higher-rated bonds. Milken still made a 100% return on his investment that year.

    After that success, Milken and his firm, Drexel Burnham Lambert, began underwriting junk bonds, propelling them to a more mainstream existence.

    Soon, Milken was helping a number of business and entrepreneurs, including Steve Wynn, Ted Turner and Rupert Murdoch, raise money for their companies.

    By the end of the 1980s, the junk bond market was worth $150bn and Milken, nicknamed the Junk Bond King, was a billionaire.

    The downfall Milken’s stunning downfall began in 1986, when stock speculator Ivan Boesky pleaded guilty to insider trading and implicated Milken in a number of illegal activities, including insider trading, stock manipulation and fraud.

    In 1989, a federal grand jury indicted Milken on 98 counts of racketeering and fraud. He pled guilty to six charges related to tax evasion and securities fraud and was hit with a $600m fine, a 10-year prison term and was banned from the securities industry for life.

    His comeback Milken was released from prison after serving 22 months. He was diagnosed with cancer soon after and given 12-to-18 months to live.

    It was after he beat the disease that he found his next calling life: philanthropy.

    In the last two decades, Milken has raised millions for cancer research and launched several charitable organisations, such as FasterCures, a think tank that searches for ways to improve the medical system.

    Milken is also the chairman of Knowledge Universe, a global education company that owns and operates schools around the world. His most well-known organisation is the Milken Institute, a non-profit think tank that conducts research around health care, job creation, technology and the economy.

    Milken did apologise in court in 1990. “What I did violated not just the law but all of my principles and values,” he said. “I deeply regret it, and will for the rest of my life. I am truly sorry."

    The return, explained Milken was able to go from crook to good guy because it’s clear that he’s repented for his past, said Henry. His courtroom apology helped, but his years of philanthropy have proven to people that he’s a changed man.

    He has set about making other people’s lives better, and it’s hard to find fault in that, Henry said.

    “He’s owned up to his mistakes,” Henry said.

    “There is some evidence of genuine remorse on his part,” added Arnold. “He’s made some terrible mistakes, he paid an enormous personal price, he went to jail and he lost his reputation. Now he’s devoting his life to being more useful. People are willing to give others a second chance if someone shows true remorse.” (Getty Images)

  • Henry Blodget, dot-com busted

    Rise to fame Henry Blodget was one of the most successful technology analysts during the dot-com boom.

    He rose to fame in 1998 after saying that Amazon.com’s stock — it was then a fairly new company — would climb from $240 a share to what sounded like an incredible $400 a share, which is exactly what happened a few weeks later.

    In 1999, based largely on that prediction, he was hired by Merrill Lynch to lead its global technology research division. The New York-based Blodget reportedly made $12m a year in the job.

    The downfall Everything came crashing down in 2003, when the US Securities and Exchange Commission accused Blodget of publishing false research, misleading investors and exaggerating claims about the companies he was covering.

    Their proof? Private internal emails that showed that he was saying one thing while his company said another. In a note about 24/7 Media, he called the internet company’s key product a “piece of (excrement).”

    Yet a few months later, Blodget gave the company a high rating and made nearly no mention of the product he disliked. There are similar examples in the SEC’s action against Blodget.

    He was hit with a $4m fine and a lifetime ban from the securities industry, while Merrill Lynch was forced to fork over $200m in penalties.

    His comeback For several years, hardly a peep was heard from the former superstar analyst. Then, in 2007, Blodget co-founded Business Insider, a news website that mostly focuses on technology and the economy.

    A March Reuters article valued the company at $100m. Blodget’s site is a go-to source for anyone interested in business and tech-related matters.

    The return, explained Many disgraced professionals start their own business, which can lead them back to success, said Webley. “You can stop someone from getting hired, but you can’t stop them from running their own company,” he said.

    Blodget also didn’t distance himself what made him famous in the first place, said Chris MacDonald, associate professor at Toronto’s Ted Rogers School of Management. He’s still writing about technology companies in the same brash and outspoken way he did before. The difference: he’s not directly impacting people’s hard-earned savings or mutual fund portfolios.

    “He still has the talents and skills, so it’s not surprising that he’s done well,” MacDonald said. (Hubert Burda Media/Getty Images)

  • Hwang Woo-Suk, cloning fallacy

    Rise to Fame Hwang Woo-Suk’s rise to international fame began in 1999 after the Korean veterinarian said that he had cloned a dairy cow. It didn’t seem to matter that he had no evidence to back up his claim.

    Woo-Suk really hit the big time, though, in 2004 and 2005, when he published two articles in Science, a leading scientific journal, claiming that he cloned human stem cells, something that had never been done before.

    He quickly became one of the most famous researchers on the planet and was given the title of Supreme Scientist by the Korean Ministry of Science and Technology. He received $27m in grants in 2005, much of it coming from the Korean government.

    The downfall In November, 2005, two researchers who had worked with Woo-Suk revealed that his work was fabricated and his research methods were not as ethical as he had claimed.

    A few months later, it was announced that his two Science papers were made up.

    These revelations ruined Woo-Suk’s career and also sent South Korea and the scientific community into a panic. Many wondered how someone could have duped so many people.

    Woo-Suk was tried for fraud, embezzlement and ethics violations and received an 18-month suspended prison sentence.

    His comeback Yet there was one thing that was never in dispute during this tumultuous time: Woo Suk was the first person to clone a dog.

    He also still had a number of supporters who, in 2006, raised $3.5m to start the Sooam Biotech Research Foundation, a company that clones animals.

    A Nature article from January this year (not written by him) reported that since 2006, his company has cloned more than 400 dogs. Woo-Suk’s clients from the US pay upwards of $100,000 for a cloned pet.

    While the article stressed that Woo-Suk's reputation is far from being fully restored, it noted that his papers are being published in peer-reviewed journals again and about half of the funding for his research comes from government grants.

    The return, explained While he still blames other researchers for his problems, the fact some of Woo-Suk’s work has been proven to be legitimate has helped his comeback, said MacDonald.

    What’s more, his past likely matters little to his current customers, who just want a clone of their beloved pet. Indeed, the scandal may be giving people the chance to clone that pet at a discount — imagine the cost if Woo-Suk had never fallen from grace.

    “People forgive others when it’s useful to them,” said MacDonald. “Especially when they have an opportunity to have a world class scientist working for them at (what’s probably) a cut rate.” (Getty Images)

  • Tony Hayward, oil spill overseer

    Rise to Fame Kent, England’s Tony Hayward made it big the old fashioned way: he worked hard and climbed through the ranks of one of the world’s largest oil companies.

    He joined British Petroleum in 1982 and held a variety of roles until he was named chief executive officer in 2007. His career was going along swimmingly. In the late 1990s, he played a large part in expanding the company to the US and, as CEO, he successfully revived the BP name after a 2005 explosion killed 15 workers.

    His downfall On 20 April, 2010, an oil rig operated by BP exploded in the Gulf of Mexico, 41 miles off the coast of Louisiana in the US, killing 11 people and sending millions of gallons of oil into the waters.

    A US congressional panel found that Hayward ignored problems with the company’s Gulf of Mexico-based rigs. It didn’t help that Hayward came off as insensitive when he famously went yachting two months after the spill and said that that he was sorry for the disruption the spill caused, in part, because he’d like his life back. In July, 2010, Hayward resigned from BP, but not after telling reporters that he had been unfairly “demonised” in the US.

    His comeback It didn’t take long for Hayward to land a new job, though it’s considerably less public than his last gig. In 2011, a venture capital firm he co-founded took over a Turkish energy company that had operations in Iraq. He re-named the business Genel Energy, and now serves as its CEO.

    In April of 2014 he teamed up with Lord Browne of Madingly, another former BP chief executive, to explore parts of Angola for oil. He also has operations in other parts of Africa.

    Since mid-2012, Genel’s stock price has climbed 91% to almost $17.50 a share.

    The return, explained While many blamed Hayward for the spill, and he made things worse with his comments to the press, he’s still one of the world’s top oil and gas executives, said Hugh.

    From the perspective of oil-hungry investors and business types, it’s hard to say that the explosion and spill was a direct result of something Hayward did.

    “He took the blame for something that he was personally not really involved in,” said Webley. “He may not have done the due diligence that was required, but it was delegated down.”

    Ultimately, his knowledge and expertise are still in high demand. (Getty Images)

  • Paula Deen, southern cooking queen

    Rise to fame Paula Deen’s journey from small town caterer to America’s cooking queen began in 1989 when she started a catering company out of her home.

    She slowly began building a cooking empire, adding restaurants, cookbooks and television shows to her food-focused business portfolio.

    It was in 2002, though, when Paula’s Home Cooking premiered on the Food Network in the US that things really started to take off for the Savannah, Georgia-born queen of high-fat Southern cooking.
    Deen’s empire expanded to a bi-monthly cooking magazine. Eight million copies of her 14 books have been sold and she has developed numerous other business interests. It’s been estimated that Deen’s net worth is somewhere between $10m and $20m.

    The downfall The self-proclaimed butter lover’s fall from grace started in 2012, when she announced that she had Type 2 diabetes. Admirers and detractors alike found that ironic since she built a career on cooking fatty, salty and generally unhealthy foods.

    However, things really started to unravel for Deen a year later when she was sued for racial and sexual discrimination. The suit, which was brought by an employee, was later dismissed.

    However, she did admit that she had used the “n-word” several times, which resulted in the Food Network cancelling her show. A number of deals, contracts and endorsements — including Walmart and Target — were soon voided and a strange Today Show apology apology didn’t help.

    Her comeback Deen hasn’t yet fully recovered from this incident, but all signs point to a comeback.

    Former US president Jimmy Carter proclaimed to television network CNN that Deen should be forgiven — he thought her public apology was genuine — and it seems some investors think the same.

    In February, Najafi Companies, a private equity firm, invested $75m to help her start a new company, Paula Deen Ventures, which will oversee her media and food empire.

    On 11 June Deen announced that she would launch The Paula Deen Network, an online subscription-based channel that will show videos and host other interactive tools for food lovers. It is expected to launch in September, 2014.

    The return, explained While her once adoring public hasn’t completely returned, it’s likely many admirers will, said Henry.

    She’s still as charismatic as ever, added Arnold, and there are plenty of people who don’t think Deen did anything wrong in the first place.

    Others will simply forgive and forget. Steven Mintz, a professor of accounting at the California Polytechnic State University in the US and author of the Ethics Sage blog, said that Deen has passed the crucial forgiveness test.

    “A comeback works when you can admit your mistake and take responsibility for your actions; be remorseful; make amends to those harmed and promise to never do it again and be sincere,” he said. (Getty Images)

  • Comebacks: Tales of triumphant returns

    Anglophenia: Best of British revivals From ancient languages to boy bands, these British cultural artefacts fell out of favour, but were rescued from history's bin.

    Autos: The 3 Wheeler’s return to form From forgotten oddity to a modern sports car hero – Britain's top ‘Mog’ is on a roll.

    BBC America: A guide to every Doctor Who Every Doctor has one thing in common - he regenerates. Get up to speed on how each one made the ultimate comeback.

    Culture: Seven stages of movie stardom Famous actors often burn brightly before falling on hard times. Here's how they turn failure into success.

    Future: 'I bring the dead back to life' The radical procedure that involves replacing a patients’ blood with cold salt water could retrieve people from the brink.

    Travel: A new dawn for Italy’s south For the first time since the Grand Tour of the 18th Century, southern Italy is registering on savvy travellers’ radars.

    (NASA/Getty Images)