Enron Failure

In the late 90s, Enron was a considered one of the most innovated companies on the market. They company build power plants, operated gas lines, but they were best known for their trading. They were buying and selling gas and electricity but they also cornered the market on things like broadcast advertising and Internet bandwidth. Since they were selling stock in Internet bandwidth, they really boosted the stock market with their stock. At their peak, there shares where trading at ninety dollars apiece. And they were worth around seventy billion dollars before it all collapsed on them in October 2001.

In October 2001, they came clean about their actually income, which was billions of dollars less than what they had on their balance sheets. This was because to make up the lost revenue and massive debts, they created partnerships with companies that Enron Created. Arthur Anderson, who was the company that did the audit of Enron, said that they had found one of the biggest frauds that any corporation has perpetrated in history but didn’t do anything about it. A couple months later, Enron filed for bankruptcy, which put thousands out of work and left investors penniless because their stocks dropped down to penny stock levels.

There were tales that Enron shredded documents, Enron execs using their power to get help from administration officials, allegations that they ignored all of the warning signs to what was to come, and even stories about millions of dollars being pocketed by employees. The collapse of this company not only effect employees and investors but also politics, since they were one of the biggest donors to political campaigns over the last decade.

Years later, CEO, President, COO, and Auditor were charged with their connection to fraud that went on in the company. The COO Andrew Fastow and his wife Lea, plead guilty to conspiracy and tax charges. Fastow got ten years with no parole and his wife was sentence to a year for helping her husband. The CEO Kenneth Lay was charged with fraud, money laundering, and conspiracy and a list of other charges and was sentenced to forty-five years in prison but died before serving it. The former president Jeffery Skilling was convicted and sentence to a little over twenty-four years in prison. Arthur Anderson was found guilty of obstruction of justice for shredding documents but didn’t serve time. Three men that worked for the Greenwich NatWest, which was involved in the fraud were also charged and sentence to thirty-seven years in prison.