Biggest Millionaire Flops
by Katie Adams
Tuesday, June 16, 2009
provided by Investopedia.com


Portfolio losses got you down? That's understandable. The dramatic 2008 market drop-off caused the S&P 500 Index to tumble 37%, wiping out more than $4 trillion in workers' retirement plan savings alone. Continued stock market and housing value declines in the first quarter of 2009 resulted in an additional loss of $1.3 trillion of savings for Americans.

If you lost money, you're not alone, but at least you can put some blame on the market. Major errors of judgment have cost some of the world's richest people more than just a pretty penny - and these are people who have a lot to lose. Console yourself with these famous financial flops.

1. Two Rocks and a (Could Have Been) $17 Billion Family Legacy

In 1883, Dr. William Howey went to check on crews building the Canadian Pacific Railway. While searching for a lost worker, he found some interesting copper-colored rocks and pocketed them. Upon returning home he sent them to the director of the Geological Survey of Canada. The verdict? The stones were deemed worthless, and Howey threw them away.

A contractor picked them up, and a year later decided to check out the site where they were found. It turned out those "rocks" were copper and the contractor - Thomas Murray - had discovered one of the world's largest copper deposit, producing millions of dollars of ore. When it was discovered the ore contained high levels of highly sought-after nickel, the deposit was named the International Nickel Company of Canada, and went on to become the second-largest producer of nickel worldwide. In 2006, Vale (NYSE: VALE) (previously CVRD) bought the company (named INCO) for $17 billion. Talk about a rock-solid investment!

2. A $75 Million Marital Mistake

Madonna may have a knack for putting out hit records, but her most recent divorce to film director Guy Ritchie will hit the "material girl" where it really counts - the wallet. Why? No prenuptial agreement. The 25-time gold record winner will pay her ex-better half $75 million as part of their divorce settlement. That equates to just a little less than $10 million for each year of their eight-year marriage. Don't feel too bad for the pop and rock icon, however - she's still worth more than $400 million.

3. A $54 Million Hand-Motion Markdown

Vegas casino owner and art collector Steve Wynn was entertaining a small group of friends in the fall of 2006 when he decided to show them his prized Picasso "Le Reve," ("The Dream"). He had recently agreed to sell the piece for $139 million to fellow collector and hedge fund director Steve Cohen. But Wynn's "dream" turned into a nightmare when, with one seemingly harmless hand motion while hosting a party at his home, he put his elbow through the famous painting of Picasso's mistress. The shocked guests vowed to keep silent about the incident and Wynn later chose to keep the painting; it was restored but dropped in value to $85 million. It cost Wynn $90,000 for restoration work.

4. Stop That $4 Million Cab!

Grammy-award-winning Russian violinist Philippe Quint will always double-check before stepping out of a cab. In 2008, he left a $4 million 1723 Antonio Stardivari violin in the back of a taxi after a ride home from Newark Airport. There are fewer than 700 of the handmade, highly-prized instruments worldwide.

Six frantic hours after reporting the loss, Quint got a call from the port authority that driver Mohamad Khalil had returned to the station with his instrument. When the two met, Quint fell to his knees in thanks; to demonstrate the depth of his gratitude Quint later treated Khalil and 200 of his cabbie-driving comrades to a 30-minute private concert at the airport. But although Quint managed to come out of his million-dollar ordeal without parting with a penny, Quint's orchestral peer David Garrett wasn't so lucky. The world-class musician tripped at the end of a concert and landed on his 290 year-old Stradivari violin, destroying the priceless instrument.

5. What?! Call That $2 Million Foul, Ref!

Wimbledon champion and TV commentator John McEnroe wouldn't let an opponent get away with anything on the tennis court, but a high-flying rare art salesman got away with $2 million of McEnroe's fortune. Lawrence Salander, a New York art dealer, defrauded McEnroe through an elaborate scam by selling him half-shares in painter Arshile Gorky's pieces "Pirate I" and "Pirate II." One slight detail the dealer forgot to divulge: he didn't own the paintings.

6. The $1.5 Million Ferrari Fiasco

Actor Eddie Griffin had the best of intentions when he signed up to drive a race car for a charity benefit and to promote his 2007 movie "Redline," in the process. Eager to show off his driving prowess, he slid behind the wheel of a $1.5 million Enzo Ferrari - one of only 400 produced worldwide. Just moments after taking the wheel, Griffin took a corner a little too tight, clipped a cone and locked the wheels of the prized car, slamming it into a concrete barrier. Although he walked away unharmed, the rare car was declared a total loss.

Could it get any worse? Actually, yes. The car was owned by Griffin's boss, "Redline" executive producer Daniel Sadek.

The next time portfolio losses have you down, just be glad that you can blame some of your woes on the market, rather than your own poor judgment. These millionaires' financial flops prove they haven't been nearly so lucky.