The Crisis Exposes All The Flaws

Warren Buffett once said, "It's only when the tide goes out that you realize who has been swimming naked." Well, it's ebb tide for the global economy, and high-flying companies are being caught in the buff. The latest hapless swimmer? Ramalinga Raju, CEO and founder of Satyam Computers, India's fourth-largest tech firm. Satyam worked with more than a third of the Fortune 500, and claimed good financial health. But last week Raju resigned after confessing to inflating the company's profits for years. Satyam's shares plummeted, dragging India's stock market down.

The scandal stunned the country's corporate titans, who now fear foreign investors will pull back. Meanwhile, the public was left to wonder how regulators could have missed so large a fraud, and how many other nude swimmers might still be in the sea.

By Jeremy Kahn