Eron Essay: The Scandal Of Enron Corporation

The Scandal of Enron Corporation

Enron Corporation was an American commodities, energy, and services company that was based out of Houston, Texas. This corporation was founded in 1985, resulting from the merger between InterNorth and Houston Natural Gas, these were both moderately small businesses in the United States. Before Enron’s bankruptcy on December 2, 2001, it had nearly 20,000 employees and was one of the global leaders in the communications, electricity, natural gas, and pulp and paper market, with declared earnings of approximately $101 billion during 2000. Enron was termed “America’s Most Innovative Company” by Fortune for six years in a row.

It was discovered that Enron’s stated financial condition was prolonged by established, inventively, and methodically planned accounting fraud at the end of 2001. It has been since called the Enron scandal. Enron has subsequently become a popular example of deliberate corporate corruption and fraud. This scandal

Shortly after, Enron starts to trade natural gas commodities. In the 1990s, Jeffrey Skilling was hired by Lay to direct the corporation’s endeavor to concentrate on the trading of commodities in the markets that are deregulated. Later that year, Skilling makes one of his first hires, Andrew S Fastow. The next year Richard Causey joins Enron Corporation as the assistant controller, after he resigns from Arthur Andersen. In 1997, Enron names Skilling CEO and President. That same year, Chewco, a partnership, is created by Fastow in order to purchase the pension fund stake of the University of California in yet another combined venture called JEDI, but the partnership failed to meet the requirements needed for it to be held off of the balance sheet of Enron. This is the very first step in the direction of analogous financial moves of concealing debts and inflating profits, that ultimately leads to the downfall of Enron