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Enron

            In 1984 Ken Lay became chairman and Chief Operator of Houston Natural Gas. It quickly doubled when it bought Florida Pipeline Company. The next year in 1985 Houston Natural Gas merged Internorth Incorporation. With the merger they both combined to own around 40,000 miles of pipeline and shortly after they changed their name to Enron. Around that time Washington was being lobbied by energy corporations to deregulate business and let companies set their own prices. Energy companies said this would not only lead to the end of monopolies but the extra competition would benefit companies and consumers. Over the next several years Washington began to lift controls on who could produce energy and how it was sold. With an influx of new suppliers energy prices were very unstable. With these deregulations Enron was allowed to sell natural gas on an open market such as oranges and wheat. With this new way of business Enron was able to grow into the seventh largest company in the United States with over 25,000 employees in over thirty countries. It became an innovator in gas trading and technological advances in the energy field. In 1990 Enron hired Jeffery Skilling as the company Energy's Trading Operation Consultant. At age thirty-six Skilling was able to create the "Gas Bank". The "Gas Bank "is when a company buys large volumes of gas from producers and resells it to industrial customers at long term contracts. This helped stabilize the gas market which was very volatile at the time. It also helped expand gas production nationwide and helped Enron grow to a major player in the energy industry.
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             As Skilling went up in rank he started to get the company involved in risky investments to make more profit. In an interview with the University of Virginia he said "We like risk because you make money by taking risk," This was one of the many reasons which got Enron into financial debt, Skilling also persuaded regulators to allow Enron to use "market-to-market" accounting.


Essays Related to Enron

1. Enron and bad ethics

... Chief Executive Officer Jeffrey Skilling sold $70.7 million and Richard Causey sold 134.4 million dollars. (http://taipeitimes.com/news/2002/06/18/story/0000140860). Michael Kopper, a former executive at Enron, admitted to obtaining $12 million illegally. Creditors are suing for the amount. The amount of the entire lawsuit is $50 billion. The creditor filed the lawsuit with federal bankruptcy court ... of the document shredding. • Jan. 24, 2002: Congressional hearings begin. David Duncan, former partner at Anderson LLP, refuses to testify about the shredding of Enron-related documents....

  • Word Count: 1674
  • Approx Pages: 7
  • Grade Level: High School

2. Enron - False Financial Practices & Damages to Shareholders

... holds so long as the executives hold on to the shares. Once they have sold them, there is no longer a commonality of interests. In Enron's case it seems the executives were too interested in boosting the share price, at least for a while - hence the use of off-balance- ... the finance group, that many had no real "business purpose" other than improving financial appearances. If an asset was 100 shares of IBM stock, Enron would divide each share into two parts, one called a "control interest" and one called an "economic interest." Then it would sell the economic interest ... share price. ...

  • Word Count: 2143
  • Approx Pages: 9
  • Has Bibliography
  • Grade Level: High School

3. Enron

... for what was done to the people who trusted their company and invested in its stock There is not a lot that can be done. ALLEGATIONS AGAINST ENRON Enron sold insiders a billion dollars worth of shares of its stock in the last two year-while other shareholders were left out. How much influence have on ... auditor. He is the one accused of shredding documents and e-mails that invistagators were needing.It was Mr Duncan's job to keep a check on Enron's accounts.Duncan has also refused to testify.Mr Lay now places all the blame on Mr Duncan. Michael Kopper Michael Kopper, who by conincident ...

  • Word Count: 1748
  • Approx Pages: 7
  • Grade Level: High School

4. The Enron Corporation

... but profit for the company and himself. Employees said Jeffrey imposed a "growth -at-any-cost culture" (pg. 1 The pride and fall of Enron) on the company. Apparently Skilling started to seclude himself from all other executives and started to override all powers. In past interviews with Skilling's employees ... and $1.2 billion in shareholders money, which was run by Andrew Fastow. In that same month the Securities & Exchange Commission began an investigation of Enron executives because they thought that the company was having internal problems that was causing a division of interest. L...

  • Word Count: 1721
  • Approx Pages: 7
  • Has Bibliography
  • Grade Level: High School

5. The Fall of Enron

... up to $3 billion in obligations to various partnerships. A $23 billion merger from rival Dynegy was dropped November 28 after lenders downgraded Enron's debt to junk bond status. Who's to Blame? Kenneth Lay, (former Enron Chairman and CEO) and Enron poured millions of dollars into both political parties, cultivating access and using the entrée to lobby Congress, the White House and regulatory ... agencies for action that critical to the energy company's spectacular growth. Greg Whalley, (former Enron President and Chief Operation Officer) had six to eight conversations last fall with t...

  • Word Count: 797
  • Approx Pages: 3
  • Grade Level: Undergraduate

6. Enron:Lapses in Ethical Decision Making

... price), they would report the entire sale price instead. Many energy companies used this accounting style that was legal, but made the numbers look astronomical. The accounting methods used by Enron were definitely the major result in the collapse the corporation took in 2001. Besides accounting, lack of training in the organization also was a factor along with ignoring ethical judgment. ... prevailing norms, values, and expectations"(B&S, p.46). Every single company has an obligation to stand by, and that is to perform ethically, economically, and legally within the morals placed by soc...

  • Word Count: 2824
  • Approx Pages: 11
  • Grade Level: High School

7. Enron Scandal

... had been the chief executive officer of Houston Natural Gas, was named chairman and chief executive officer of the company we now known as Enron. In 1994, Enron made its first electricity trade, beginning what would turn out to be one of the company's biggest profit centers for the next few ... vision statements highlighting their codes of ethics and values, which in essence, identifies their level of consciousness and morality. However in the case of Enron, actions that took place in amongst the top management strayed far from what they proposed. Thus lead to the corporate and executive ...

  • Word Count: 1298
  • Approx Pages: 5

8. Enron and the Sarbanes Oxley Act

... influential of these laws set in place to prevent falsified financial reporting and protect the public is the Sarbanes Oxley Act (SOX), which was implemented immediately after the Enron corporate scandal in 2001. The Sarbanes Oxley Act changed corporate America for the better, by giving rise to stronger more ethical policies, restructuring and enforcing stronger corporate governance ... one month after their auditor gave the company a clean report (meaning their financial statements looked good) (Buckstein). The company seemed like a healthy giant, but behind the curtains, Enron's' exec...

  • Word Count: 3410
  • Approx Pages: 14
  • Has Bibliography
  • Grade Level: Graduate

9. Enron -The Next Teapot Dome?

... documents under legislative subpoena, voted to seek criminal charges against the company for concealing evidence and conspiracy. Andersen was the major accounting firm that audited Enron's books. Andersen officials said that their accountants shredded some Enron-related documents. "The U.S. Department of Justice announced that a federal grand jury had indicted Andersen on charges of obstruction of regulatory and criminal ... proceedings as a result of document destruction relating to the audit of Enron."" (AccountingWEB) Andersen was convicted of obstruction of justice. Former Enron exec...

  • Word Count: 1545
  • Approx Pages: 6
  • Grade Level: High School

10. Enron

... most respected financial investors, Warren Buffet and Peter Lynch, have long recommended that people invest only in companies they know and understand. (2) Understand investment risk and how you handle risk: Enron was a risky company. It was on the cutting edge of a changing industry: deregulated energy. Over 90 percent of investors say they have a conservative to moderate investment philosophy, yet ... around here?" Corporate culture may be conveyed through employee hand books, formal codes of conduct and extracurricular activities and anecdotes. All of which lower level employees bel...

  • Word Count: 1893
  • Approx Pages: 8
  • Grade Level: Undergraduate

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