The Houston based commodities, energy and service corporation Enron was involved in one of the biggest fraud cases in the United States of America. Underlying the fraud was the deception of reports and statements that gave a very inaccurate and misleading view about the company.
The Organisation, Time and Place
Enron Initiated as an interstate pipeline company through the merger of Houston Natural Gas and Omaha-based InterNorth in 1985.(The rise and fall of Enron: a brief history, 2006)
With this merge the previous CEO of Houston Natural Gas, Kenneth Lay, advanced and became the new CEO of Enron. He was very quick to rebrand Enron into an energy trader and supplier.
In the year of 1999, Enron began to widen their scope by launching its broadband services unit and Enron online. The initial pipeline sector now included a company website from which the activity of trading commodities could be possible. This had immense effect in the revenue of the company as it soon began to generate ninety percent of its income from trades over Enron online. (The rise and fall of Enron: a brief history, 2006),
Continuous development saw a large increase in the network of the natural gas pipeline, added with some innovations to include pulp, paper and water sectors saw the company recognised by Fortune as “America’s Most Innovative Company” for six consecutive years ending 2001.(Folger, 2011). Naturally this allowed for the company’s stock prices to peak to a point where they were ranked up as the seventh largest company on the Fortune 500 and sixth largest energy company in the world. (The rise and fall of Enron: a brief history, 2006)
Cracks started to appear in Enron’s financial records which revealed the tru...
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On July 5th 2006 Kenneth Lay passed away as a result of a heart attack caused by a severe disease in the coronary artery. Jeffery Skilling, having been sentenced to 24 years and four months in prison, appealed his conviction and was successful in the way that he was able to reduce his sentence by more than ten years on the basis that he was incorrectly prosecuted under with respect to honest-service fraud. (Enron Fast Facts, 2014).
Arthur Andersen escaped conviction in relation to the obstruction of justice for destroying Enron related audit documents. Andrew Fastow pleaded guilty to charges against him and agreed to serve up to 10 years in prison as well has surrendering $30 million in cash and property. As a result he only ended by being sentenced to six years, four years less than the agreement. (‘Status of Enron Cases’, 2006)
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