Bausch and Lomb

Bausch and Lomb is a modern corporate parable of mismanagement and outright fraud that has destroyed profits and actually injured thousands of customers. The company made just $14.9 million dollars in 2006 on total revenues of $2.29 billion. Yet the company's iconic products continue to sell briskly across the country.

As is so often the case, fraud at the top of a corporation signals a broader sickness within the company. In 2002, CEO Ronald Zarella was caught lying about graduating from business school. Just a few months earlier, the company lost a lawsuit with Novartis alleging patent infringement on the PureVision product. What did Zarella do? He planned to move production overseas to Ireland when a federal judge ordered him to stop production of PureVision. It took more than 2 years for Zarella to negotiate a royalty with Novartis that will enable the company to continue production.

But Bausch and Lomb's troubles aren't limited to patent infringement and a lying CEO. In 2006, the Centers for Disease Control found that the company's flagship product ReNu causes fungal keratitis. Eye infections are always serious, but when a product whose chief use is cosmetic potentially causes customers to go blind the company is in real trouble. Bausch and Lomb faces two class action lawsuits and Zarella doesn't look up to the challenge this time either.