Born from the merger of companies Houston Natural Gas and InterNorth, Enron became one of the top leaders in the natural gas industry. After the deregulation of natural gas pipeline regulations by the US Government, Enron had to develop a new business strategy. The CEO, Kenneth Lay hired a consulting firm in order to help Enron develop a new business strategy that complies with the new government regulations. The management company, McKinsey & Co., assigned one of their younger consultants, Jeffrey Skilling, to their new client, Enron’s, consulting account. Impressed by the work that Jeffrey Skilling was doing on Enron’s new business strategy, Kenneth Lay decided to create a new division of his company named Enron Finance Corporation. Kenneth Lay decided to pursue Jeffrey Skilling and hire him to lead the company as a top executive. Jeffrey Skilling appeared ideal for the job to Kenneth Lay because Jeffrey Skilling had backgrounds in banking, asset, and liability management. (Thomas, 2002)
Kenneth Lay – Lay was the Enron founder and later known as the dishonorable Enron business executive who was ultimately convicted of conspiracy and fraud. Lay was born in Missouri in 1942. He was very smart; he got his bachelors, masters and Ph.D. in economics. He started his carrier as economist and speech writer, then lecturer and assistant professor, but latter he got to be an energy deputy under-secretary for the United States Department of Interior. He also got to be the Florida Gas Company vice-president and then president, and other high standing positions with The Continental Group, Transco Energy Company, Houston Natural Gas Corporation, and of course Enron’s chairman, CEO, and president. In 1985, Lay formed Enron after
Enron formed in 1985 when InterNorth merged with Houston Natural Gas, whose CEO Kenneth Lay would become the CEO of the newly formed Enron, who at its peak was worth 70 billion dollars. Lay held a Ph.D. in Economics. Lay was also a contributor to being granted deregulation and the ability to sell energy on the free market. It was this deregulation that caused Ken Lay to see the money he could make in energy and what ultimately caused Enron to form. This is what Ken Lay had dreamed of since he was a child, not wanting to be poor. And Enron was going to deliver this to him. After-all he had something the whole world needed (energy with a price that flowed and fluxed with the market). Combine this with his ability to create a market which allowed
#4 The Enron Company was created in 1985 when Inter-North took up Houston Natural Gas. After the formation of the new company, Enron pursued many non-energy related fields of business including internet bandwidth, risk management, and weather insurance for seasonal businesses. Enron was extremely successful in their different businesses and, their numbers were showing that they were highly profitable and successful as a business. Because their numbers were extremely excellent, investigations began into their business, offshore partnerships, and accounting journals.
growth is one of the greatest of any nation in that period. It is now one of the world’s biggest
Enron was an American energy, commodities, and services company that was based out of Houston, Texas. Enron was created by the joining of two natural gas companies, InterNorth Inc . of Omaha, Nebraska and Houston Natural Gas. Enron had a rapid rise to become one of the biggest corporations in the United States at the time and also became one of the biggest business collapses in United States history. I will talk about how Enron came into existence and how it ultimately failed.
The history of Lehman Brothers (LBs) is dated back to 1844 when Henry Lehman and his two brothers established a small shop in Alabama (United States) to sell groceries and other commodities (Geisst, 2001). In the early 1900’s, they formed to a greater business company trading on the New York exchange market and the Cotton Exchange, which successfully promoted the family business to the retail giants with a partnership with Goldman and Sachs (Geisst, 2001; Wechsberg, 1966). Subsequently, the further opportunity raised in collaboration with some firms in the railway industry such as the Baltimore and Ohio railways, Chicago railways and others (Harward Business School, 2012). In 1975, the company achieved its success when it became the 4th largest investment bank in the US by merging with Kuhn, Loeb and Company, which boosted their financial activities in the financial market (Sloane, 1977). In the new line of business by diversifying their operations from a small shop via investments in the industry sectors, eventually they transformed to the company operating in the banking and brokerage (Geisst, 2001). Although LBs experienced remarkable successes and achievements, the housing market bubble in USA led to their collapse causing that in September 2008 the company filed for chapter 11 bankruptcy petitions that triggered a negative flow of consequences (Caplan et al., 2010).
Enron, the US Energy Trading and Utilities Company grows in just 15 years into one of America’s largest and most successful Corporations. Enron’s officials ignored warnings of accounting irregularities, as they pocketed millions of dollars in stock market gains. When the company collapsed, they declared bankruptcy and thousands of people are thrown out of work. The investors, including most of Enron’s employees lose billions, as Enron’s shares sink to penny stock levels. The top executives walk away with millions in profit until the government comes calling.
Growing up, kids have high aspirations and believe that they can do anything. Often kids say they want to be a fireman, an astronaut, or other heroic jobs that they seem to be fascinated on. This though was not the case for Warren Buffett. From Buffett himself, he states:
What were the key criticisms levied by different interest groups against Enron and the Dabhol Power Project? Discuss whether these concerns were valid, given particularly India’s priorities and problems, as a transition economy.
The Bernie Madoff Ponzi Scheme is a well-known case and is known as one of the biggest Ponzi scheme’s. In summary the scheme occurred for many reasons that I will some up into 3 points; A lack in competency by regulatory agencies, a lack of regulation, and finally a breach in ethics by Bernie Madoff himself. To explain further, the regulatory agencies like the lawyers and SEC are supposed to prevent schemes such as this one from happening but because they lacked the skills to correctly assess the situation, interpreting the number of tips they had received regarding scheme that had been filed, and to act on those in an efficient manner. One of the tips was made by Harry Markopolos in 2000, of who correctly predicted that Madoff was guilty of fraud. Even after this tip from Markopolos, Madoff was not arrested until 2009. Many family members were also a part of the fraud along with some non-family members such as Frank DiPascali and a team known as the 17th floor team, who helped Madoff carry out his fraud. The idea behind Madoff’s fraud was that he would produce false statements of their investments and when people wanted to pull out their investments, the money wasn’t actually there, which rightfully rose more than a few eyebrows and ultimately led to his arrest.
What is the possible meaning of the change in stock prices for Berkshire Hathaway and Scottish Power plc on the day of acquisition announcement? Specifically, what does the $2.55 billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp?
Bernie Madoff began his career as an investment broker in 1960, where he legally bought and sold over-the-counter stocks not listed on the New York Stock Exchange (NYSE). From the 1960’s through the 1990’s, Madoff’s success and business grew substantially, mainly from a closed circle of known investors and friends through word of mouth. In the 1990’s Bernard L. Madoff Investment Securities traded up to 10 percent of the NASDAQ on any given day. With the success of the securities business, Madoff started an illegal money-management business, promising his investors consistent returns from 10-12 percent, unheard of returns at the time, which should have tipped off most investors that something was amiss.
Jordan Belfort is the notorious 1990’s stockbroker who saw himself earning fifty million dollars a year operating a penny stock boiler room from his Stratton Oakmont, Inc. brokerage firm. Corrupted by drugs, money, and sex he went from being an innocent twenty – two year old on the fringe of a new life to manipulating the system in his infamous “pump and dump” scheme. As a stock swindler, he would motivate his young brokers through insane presentations to rile them up as they defrauded investors with duplicitous stock sales. Toward the end of this debauchery tale he was convicted for securities fraud and money laundering for which he was sentenced to twenty – two months in prison as well as recompensing two – hundred million in restitution to any swindled stock buyers of his brokerage firm (A&E Networks Television). Though his lavish spending and berserk party lifestyle was consumed by excessive greed, he displayed both positive and negative aspects of business communications.