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On December 2, 2001 Enron Corporation, one of America’s top energy companies stunned the nation and filed for bankruptcy. Soon after this collapse a criminal investigation was conducted and revealed the company lied about their profits and hid this so it did not show up on their bank accounts. Many key people were involved in the downfall of Enron such as Sherron Watkins.
Sherron Watkins was born on August 28, 1959 in Houston, Texas. She is, “the daughter of two secondary school teachers,” (Pellegrini, 2002, para. 2). As a child she resided with her family, “in a Houston Suburb called Tomball,” (Pellegrini, 2002, para. 2). After high school she attended the University of Texas at Austin. There she obtained, “a Masters in Professional Accounting as well as a B.B.A. in accounting and business honors,” (Sherron’s Bio, para. 6). Having these degrees allowed her to become a Certified Public Accountant. Before receiving a job with Enron, Sherron worked in New York City for three years, “as the portfolio manager of MG Trade Finance Corp’s commodity backed finance assets” (Sherron’s Bio, para. 5). Also, for eight years she worked, “in the auditing group of both the New York and Houston offices of Arthur Andersen,” (Sherron’s Bio, para. 5).
Towards the end of 1993 Sherron joined Enron and filled a portfolio management position. With this position she took care of Enron’s, “$1 billion-plus portfolio of energy related investments,” (Sherron’s Bio, para. 4). After three years she transferred to a job with Enron’s international group. Here she focused mainly on, “mergers and acquisitions of energy assets around the world,” (Sherron’s Bio, para. 4). In early 2000, Sherron transferred jobs again, but to Enron’s broadband unit. At Enron’s broa...
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...f Corporate Development. Sherron sent a letter to Kenneth Lay about her suspicions of the scandal and resigned from her position in November 2002. So you can see the Enron scandal changed lives for many.
Works Cited
(2006, March 15). Enron whistleblower tells of ‘crooked company’. Retrieved from http://www.nbcnews.com/id/11839694/ns/business-corporate_scandals/t/enron-whistleblower-tells-crooked-company/#.U0Lyoq1dUa5
Pasha, S. (2006, March 16). Enron’s whistle blower details in sinking ship. Retrieved from http://money.cnn.com/2006/03/15/news/newsmakers/enron/index.htm?section=money_topstories
Pellegrini, F. (2002, Jan 18). Person of the Week: 'Enron Whistleblower' Sherron Watkins. Retrieved from http://content.time.com/time/nation/article/0,8599,194927,00.html
Sherron’s Bio. (n.d.). Retrieved from http://www.sherronwatkins.com/sherronwatkins/Sherrons_Bio.html
The Fastows headed to Mrs. Fastow's native Houston in 1990, both taking jobs at a young company called Enron. Just five years old, Enron was starting to evolve from a natural-gas and pipeline company into a trading firm. Mr. Fastow was one of the first managers hired by Mr. [Jeffrey Skilling], who himself had only recently arrived, from management consultants McKinsey & Co. Brought into Mr. Skilling's inner circle, Mr. Fastow returned the loyalty, telling colleagues he had named a child after his mentor. When Mr. Skilling became Enron's president and chief operating officer in early 1997, he and Mr. [Kenneth Lay] promoted Mr. Fastow to lead a new finance department. A year later, Mr. Fastow became chief financial officer.
The Enron Corporation was committed to pushing the legal limit as far as possible. Many individuals only seeking to promote their own well-being over any legal or ethical boundaries did this. This was not only isolated with the Enron Corporation, as Arthur Andersen the outside accounting firm and Vinson & Elkins Enron’s law firm were also participants. The key players that led to the collapse of Enron was the founder Kenneth Lay, his successor
The three main crooks Chairman Ken Lay, CEO Jeff Skilling, and CFO Andrew Fastow, are as off the rack as they come. Fastow was skimming from Enron by ripping off the con artists who showed him how to steal, by hiding Enron debt in dummy corporations, and getting rich off of it. Opportunity theory is ever present because since this scam was done once without penalty, it was done plenty of more times with ease. Skilling however, was the typical amoral nerd, with delusions of grandeur, who wanted to mess around with others because he was ridiculed as a kid, implementing an absurd rank and yank policy that led to employees grading each other, with the lowest graded people being fired. Structural humiliation played a direct role in shaping Skilling's thoughts and future actions. This did not mean the worst employees were fired, only the least popular, or those who were not afraid to tell the truth. Thus, the corrupt culture of Enron was born. At one point, in an inter...
Flynt, Sean. “Enron Whistleblower Tells Chilling Tale of Corporate Ruin.” Samford University. Ed. Donna Fitch. 19 Feb. 2004. 3 Mar. 2005.
Enron Corporation started back in 1985. It was created as a merger of Houston Natural Gas and Omaha based InterNorth as a interstate pipeline company (CbcNews). Kenneth Lay was the former chief executive officer of Houston natural gas merged his company with another natural gas line company, Omaha Based InterNorth. During the time of the merger there were many arguments amongst the two companies and in the end Ken Lay the former C...
Enron was in trouble because of something that almost every major corporation during this time was guilty of. They inflated their profits. Things weren't looking good for them at the end of the 2001-year, so they made a common move and they restated their profits for the past four years. If this had worked to their like they could have gotten away with hiding millions of dollars in debt. That completely admitted that they had inflated their profits by hiding debt in confusing partner agreements. Enron could not deal with their debt so they did the only thing that was left to do, they filed for chapter 11 bankruptcy. This went down as one of the largest companies to file for bankruptcy in the history of the United States. In just three months their share price dropped from $95 to below $1.
Enron Corporation was based in Houston, Texas and participated in the wholesale exchange of American energy and commodities (ex. electricity and natural gas). Enron found itself in the middle of a very public accounting fraud scandal in the early 2000s. The corruption of Enron’s CFO and top executives bring to question their ethics and ethical culture of the company. Additionally, examining Enron ethics, their organization culture, will help to determine how their criminal acts could have been prevented.
Thomas, C.W. (April, 2002). The rise and fall of enron. When a company looks too good to be true, it usually is. Journal of Accountancy, Retrieved June 15, 2011, from http://www.journalofaccountancy.com/Issues/2002/Apr/TheRiseAndFallOfEnron.htm
“When a company called Enron… ascends to the number seven spot on the Fortune 500 and then collapses in weeks into a smoking ruin, its stock worth pennies, its CEO, a confidante of presidents, more or less evaporated, there must be lessons in there somewhere.” - Daniel Henninger.
Prior to 2000, Enron was an American energy, commodities and service international company. Enron claimed that revenue is more than 102 millions (Healy & Palepu 2003, p.6). Fortune named Enron “American most innovative company” for six consecutive years (Ehrenberg 2011, paragraph 3). That is the reason why Enron became an admired company before 2000. Unfortunately, most of the net income for the years 1997-2000 is overstated because of unethical accounting errors (Benston & Hartgraves 2002, p. 105). In the next paragraph, three main accounting issues will identify for what led to the fall of Enron.
Glater, Jonathan. "Enron Trail Stirs Memory of Andersen." New York Times 21 Feb 2006, web.
Enron was on the of the most successful and innovative companies throughout the 1990s. In October of 2001, Enron admitted that its income had been vastly overstated; and its equity value was actually a couple of billion dollars less than was stated on its income statement (The Fall of Enron, 2016). Enron was forced to declare bankruptcy on December 2, 2001. The primary reasons behind the scandal at Enron was the negligence of Enron’s auditing group Arthur Andersen who helped the company to continually perpetrate the fraud (The Fall of Enron, 2016). The Enron collapse had a huge effect on present accounting regulations and rules.
The Enron Corporation was an American energy company that provided natural gas, electricity, and communications to its customers both wholesale and retail globally and in the northwestern United States (Ferrell, et al, 2013). Top executives, prestigious law firms, trusted accounting firms, the largest banks in the finance industry, the board of directors, and other high powered people, all played a part in the biggest most popular scandal that shook the faith of the American people in big business and the stock market with the demise of one of the top Fortune 500 companies that made billions of dollars through illegal and unethical gains (Ferrell, et al, 2013). Many shareholders, employees, and investors lost their entire life savings, investments,
Sherron Watkins takes a lot of risk when she decides to write a six-page letter to Kenneth Lay. She puts her jobs as well as personal and family safety at risk. This is because she may be fired, sued, blacklisted, arrested, threatened, or even assaulted or killed by Kenneth Lay and other top executives who responsible for Enron’s collapse. For instance, if she get fired, it is hard for her to find another employment because the other employers may be in doubt on her capabilities as she get fired from Enron, the “America’s Most Innovative Company” as named by Fortune for six consecutive year. Thus, during the decision-making process, it can be a financial and emotional hardship for Sherron Watkins.
Enron had rose to the top by engaging in energy projects worldwide and speculating in oil and gas futures on the world’s commodities markets. They also provided financial support to some presidential candidates and members of the U.S. Congress. However, Enron had a secret. The corporation had created partnerships located in off-shore