How Unethical and Illegal Behavior Ruined Lives
Brief History of Enron
Enron was an energy company based in Houston, Texas that dealt with the energy trade on an international and domestic basis. Enron formed in 1985 when Houston Natural Gas merged with InterNorth. After several years of international and domestic expansion involving complicated deals and contracts, Enron became billions of dollars in debt. All of this debt was concealed from shareholders through partnerships with other companies, fraudulent accounting, and illegal loans. By 1989 Enron diversified into trading energy-related commodities. In a few years, Enron had become the largest merchant of energy in the United States. By 1994 Enron had grown itself into the largest seller of electricity in the United States. During 1997 Enron went ahead with a program to reshape its corporate image to a new more modern, environmentally-aware company. They released a new corporate logo and acquired Zond Corporation, one of leading developers of wind energy power.
Kenneth Lay CEO Lets Jeffrey Skilling Take the "Balll"
Ken Lay the CEO of Enron had come from humble roots. As Enron's supposed faithful leader he was anything but. He had hired a man by the name of Jeffrey Skilling and Lay thought Skilling was a guy with big ideas. Jeff Skilling's idea was a new way to deliver energy. He wanted to revolutionize the energy industry. Enron would become a stock market for natural gas. Skilling would transform energy into a way that it could be traded on the stock market. The sticking point for Jeff Skilling to join forces with Enron was going to be if Enron would be allowed to use a method of accounting called mark to market accounting. Mark to market enabled traders to change the tax status of their earnings from capital gains/losses to ordinary income/losses. This occurs on the last day of the year, at which time you tally all of your open holdings as if you were selling... [continues]
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