The Enron scandal. (News).It was one of the greatest success stories on Wall Street. Enron, the world's largest "energy trading" company, made millions of dollars buying gas and electricity from power companies and selling it to consumers. Its stock soared.
Last fall, everything went bad. Enron, which is based in Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation).
Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the , filed for bankruptcy. By January, its stock price had dropped from a high of $90 to only 26 cents.
It is the largest corporate bankruptcy in U.S. history. Thousands of workers lost their jobs. And many more, along with outside investors, saw their life savings wiped out.
Enron started out as a natural gas pipeline company. It quickly expanded, making big investments in overseas and high-tech ventures. But the risky investments led to huge losses.
So Enron created "partnerships," which existed only on paper, to hide mounting debts. Some of the companies were named after Star Wars characters, like Chewco, short for Chewbacca.
The practice helped Enron exaggerate its earnings by $600 million. That's not all. Before Enron's troubles became publicly known, company executives apparently sold $1.1 billion in Enron stock that they owned.
At about the same time, Kenneth Lay Kenneth Lee "Ken" Lay (April 15, 1942 – July 5, 2006) was an American businessman, best known for his role in the widely-reported corruption scandal that led to the downfall of Enron Corporation. , then head of Enron, sent employees an e-mail urging them not to sell their own stock. He even suggested that they buy more.
When Enron filed for bankruptcy, 4,500 employees lost not only their jobs, but much of their retirement savings. Investors and employees are now stuck with $60 billion in losses, and they blame Lay and his deputies. Last month, Lay resigned, and another former executive committed suicide.
Investors and employees have sued Enron and its accounting firm, Arthur Andersen For the U.S. Supreme Court case commonly known as Arthur Andersen, see .
Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms (the other four are PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG), performing . Enron hired the firm to audit (examine) its finances-and to give advice on how to hide its losses. That action and the shredding shred
1. A long irregular strip that is cut or torn off.
2. A small amount; a particle: not a shred of evidence.
tr.v. of important Enron documents have cast a cloud over cloud over
1. (of the sky or weather) to become cloudy: it was clouding over and we thought it would rain
2. the entire accounting industry.
Clouds of Suspicion
The U.S. Congress is now investigating Enron's collapse. But Enron made campaign donations to Republicans and Democrats. The donations are legal, but can those members of Congress be impartial Favoring neither; disinterested; treating all alike; unbiased; equitable, fair, and just. (unbiased) investigators?
The White House also had dealings with Enron. Vice President Dick Cheney met with Enron officials last spring while drafting the administration's energy policy.
Kenneth Lay is a friend of President Bush, and was one of the biggest contributors to his 2000 campaign. But the President insists that their friendship did not affect the way the White House dealt with Enron's collapse.
Greed and Trust
Why does all of this matter? The U.S. economy relies on people to invest in the stock of private companies. If investors don't trust those companies, the economy could suffer.
"I really do not see how these people can look at themselves in the mirror every day, knowing that their greed, arrogance, and lust Lust
See also Profligacy, Promiscuity.
fiend of evil passion. [Iranian Myth.: Leach, 17]
Aholah and Aholibah
lusty whores; bedded from Egypt to Babylon. [O.T.: Ezekiel 23:1–21]
lustful fairy. [Ital. for power has caused the worst corporate meltdown meltdown
Occurrence in which a huge amount of thermal energy and radiation is released as a result of an uncontrolled chain reaction in a nuclear power reactor. The chain reaction that occurs in the reactor's core must be carefully regulated by control rods, which absorb in U.S. history," says former Enron employee Tim Dalton Tim Dalton is a former Irish footballer.
During his career he played for Notts County and later moved to Boston United, Tranmere Rovers, Grantham, Shepshed Charterhouse, Derry City FC of the League of Ireland, where he won an Irish treble in 1989, Airdrie United and . What do you think?