enron

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vnron: The Smartest Guys in The Room is a movie about one of the US largest corporations, Enron, that went bankrupt in 2001. The movie starts with the story of Enron Corporation founder who was the chief executive officer of Houston Natural Gas, Kenneth Lay. Kenneth Lay established Enron in 1985. He had a close relationship with George Bush senior and his son, George W. Bush. While George W. Bush was Texas’ governor, he helped Kenneth Lay in subsidizing Enron International. Kenneth Lay successfully built natural gas power energy in East Texas. At that time, Enron stocks increased sharply from before. Enron involved in government energy market deregulations. Two years later, Enron committed in a scandal which known as oil scandal where two traders was betting in Enron stocks. Even though Enron stayed in stable share and obtain high profit, the bets put Enron in danger. Those two traders were fired by Enron after they gambled in Enron’s reserves. On the other hand, Kenneth Lay refused to admit his involvement in this act, but in fact he attended the meeting that discuss about oil scandal issue. Another scandal which is presented in the first part of this documentary film is Louis Borget, Enron’s CEO fraud in diverting company money into his personal account offshore. Auditors tried to uncover this problem and Kenneth Lay also encouraged him to keep making millions for Enron. However, Louis Barget was put in jail by the court for a year. A new CEO, Jeffrey Skilling was hired by Kenneth Lay to replace Borget’s position after Borget went to the jail. Jeff Skilling was mark-to-market accounting before he worked for Enron. A mark-to market accounting allows accountants to calculate and book the profits of the project immediately after it is signed, although nobody knew whether the project would turn out successful or not. He introduced and brought Enron to stock market. Jeff Skilling made some improvements to Enron when he... View Full Essay
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