Equity Funding

Founded in 1964, Equity Funding Corporation of America (EFCA) was a popular glamour stock on the New York Stock Exchange. The company's primary business model involved selling program packages that combined mutual fund investments with life insurance policies. The concept was that the returns from the mutual funds would cover the premiums for the life insurance, providing clients with "free" insurance. However, the company's rapid growth was a sham. Starting as early as 1964, top executives began fabricating revenue and assets, most notably by creating tens of thousands of fake life insurance policies. These fictitious policies were then sold to reinsurance companies for cash. The fraud was uncovered in 1973 by a former employee, leading to the company's swift collapse, a major stock market scandal, and the imprisonment of several executives.