Enron, Kenneth Lay, Jeff Skilling, Andy Fastow, George W Bush, Toltec News and Sports, Bethany McClean, Comfort Technology Social Media Agency

Enron~The Smartest Guys In The Room~feat Bethany McLean

58 Views - Published on 16 Jul, 2020
⁣The Enron scandal, publicized in October 2001, led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the de facto dissolution of Arthur Andersen, which was one of the five largest audit and accountancy
partnerships in the world. In addition to being the largest bankruptcy
reorganization in American history at that time, Enron was cited as the
biggest audit failure.[1]:61
Enron was formed in 1985 by Kenneth Lay after merging Houston Natural Gas and InterNorth. Several years later, when Jeffrey Skilling was hired, he developed a staff of executives that – by the use of accounting loopholes, special purpose entities,
and poor financial reporting – were able to hide billions of dollars in
debt from failed deals and projects. Chief Financial Officer Andrew Fastow
and other executives misled Enron's board of directors and audit
committee on high-risk accounting practices and pressured Arthur
Andersen to ignore the issues.
Enron shareholders
filed a $40 billion lawsuit after the company's stock price, which
achieved a high of US$90.75 per share in mid-2000, plummeted to less
than $1 by the end of November 2001.[2] The U.S. Securities and Exchange Commission (SEC) began an investigation, and rival Houston competitor Dynegy
offered to purchase the company at a very low price. The deal failed,
and on December 2, 2001, Enron filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. Enron's $63.4 billion in assets made it the largest corporate bankruptcy in U.S. history until the WorldCom scandal the next year.[3]
Many executives at Enron were indicted for a variety of charges
and some were later sentenced to prison. Arthur Andersen was found
guilty of illegally destroying documents relevant to the SEC
investigation, which voided its license to audit public companies and
effectively closed the firm. By the time the ruling was overturned at the U.S. Supreme Court,
the company had lost the majority of its customers and had ceased
operating. Enron employees and shareholders received limited returns in
lawsuits, despite losing billions in pensions and stock prices.
As a consequence of the scandal, new regulations and legislation
were enacted to expand the accuracy of financial reporting for public
companies.[4] One piece of legislation, the Sarbanes–Oxley Act,
increased penalties for destroying, altering, or fabricating records in
federal investigations or for attempting to defraud shareholders.[5] The act also increased the accountability of auditing firms to remain unbiased and independent of their clients.[4]
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