Is it greed or simply ignorance which caused the Enron Scandal? Enron once was known as "America's Most Innovative Company" and as of today, known as one of the most popular business bankruptcies and failures. Enron appeared to be doing really well, producing a lot of cash and new businesses, in October of 2001 that all changed. Enron reported a $618 million third-quarter loss and declares a $1.01 billion non-recurring charge against its balance sheet. Partially related to "structured finance" operations run by chief financial officer Andrew Fastow. In the analyst conference call that same day, Lay also announces a $1.2 billion cut in shareholder equity. After math, Enron was mandated to disclose their financial documents. The public and Enron employees learned, what appeared to be a successful past with gains and a future turned into forgery, fraud, and deceit.
Unfortunately, Enron executives who were responsible for the unethical accounting practices were able to escape this debt by selling off most or all of their shares in the company. The company valued at over 10 million dollars, before the stock price fell greatly. In the meantime, while they were selling all their stock. They continued to encourage their staff to keep buying more and more, investing more into their 401k. During this time, the executives froze employee's pension plans, and many people lost their jobs in the stir of the collapse and found out their retirement was history.
Enron’s accountant Arthur Anderson admitted to shredding one ton of important documents and files. That evidence was then gone, the SEC probed a formal investigation. Enron filed documents with SEC revising its financial statements for past five years to account for $586 million in losses, November 2001. Even though executives were able to sell most of their stock, they were not all out of the clear just yet. Many faced jail time and lost everything, all because they did things unethically, making Enron look like...
Please join StudyMode to read the full document