Enron

Enron
source
Name	Enron
Type	Public
Industry	Energy
Fate	Bankruptcy
Founded	1985
Founder	Kenneth Lay, Jeffrey Skilling
Defunct	2001
Headquarters	Houston, Texas

Enron was a multinational energy, commodities, and services company based in Houston, Texas, founded by Kenneth Lay and Jeffrey Skilling in 1985. The company's rapid growth and success were fueled by its innovative approach to energy trading, which was pioneered by Andrew Fastow and Lou Pai. However, Enron's success was short-lived, as the company's financial troubles and accounting scandals led to its downfall, involving Arthur Andersen, JPMorgan Chase, and Credit Suisse First Boston. The company's collapse was one of the largest corporate bankruptcies in history, affecting California, New York, and the global energy market, including ExxonMobil, Royal Dutch Shell, and BP.

● History of

Enron The history of Enron began in 1985, when Kenneth Lay merged Houston Natural Gas with InterNorth, a Nebraska-based energy company, with the help of Goldman Sachs and Morgan Stanley. The company's early success was driven by its innovative approach to energy trading, which was led by Jeffrey Skilling and Andrew Fastow, and involved Enron Online, a web-based trading platform. Enron's growth was rapid, and the company expanded into new markets, including Europe, Asia, and South America, through partnerships with EDF, E.ON, and Petrobras. The company's success was recognized by Fortune magazine, which named Enron one of the most innovative companies in the world, alongside Microsoft, Cisco Systems, and Intel.

● Corporate Structure

Enron's corporate structure was complex and involved a number of subsidiaries and special purpose entities, including Chewco Investments, JEDI, and Raptor, which were used to hide the company's debt and inflate its earnings. The company's management team, including Jeffrey Skilling, Andrew Fastow, and Richard Causey, were responsible for overseeing the company's operations and financial reporting, with the help of KPMG and PricewaterhouseCoopers. Enron's board of directors, which included Robert Belfer and Norman Blake Jr., were responsible for overseeing the company's management and ensuring that the company was operating in accordance with the law, as outlined in the Sarbanes-Oxley Act and the Securities Exchange Act of 1934.

● Accounting Scandal

The accounting scandal at Enron involved the use of special purpose entities and other financial instruments to hide the company's debt and inflate its earnings, with the help of Arthur Andersen and Deloitte & Touche. The scandal was uncovered in 2001, when Sherron Watkins, an Enron employee, reported her concerns about the company's financial reporting to Kenneth Lay and the company's audit committee, which included Robert Jaedicke and Paula Reynolds. The scandal led to a number of investigations, including those by the Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI), and the United States Department of Justice, which involved Robert Mueller and John Ashcroft.

● Bankruptcy and Aftermath

Enron filed for bankruptcy in 2001, after the accounting scandal was uncovered, and the company's stock price plummeted, affecting CalPERS, TIAA-CREF, and other investors, including Fidelity Investments and Vanguard Group. The bankruptcy was one of the largest in history, with over $65 billion in assets and over $38 billion in debt, and involved Weil, Gotshal & Manges and Kirkland & Ellis. The aftermath of the bankruptcy was marked by a number of lawsuits and investigations, including those by the SEC, the FBI, and the Department of Justice, which involved Eliot Spitzer and Christopher Cox.

● Trial and Convictions

The trial of Enron's executives, including Jeffrey Skilling and Kenneth Lay, began in 2006, and involved Ted Olson and Ronald Rakosky. The trial was marked by a number of dramatic moments, including the testimony of Andrew Fastow and Sherron Watkins, and the conviction of Jeffrey Skilling and Kenneth Lay on multiple counts of conspiracy, securities fraud, and other crimes, as outlined in the United States Code and the Federal Rules of Criminal Procedure. The convictions were upheld on appeal, and Jeffrey Skilling and Kenneth Lay were sentenced to prison terms, with Skilling serving his sentence at Federal Correctional Institution, Waseca.

● Legacy and Impact

The legacy of Enron is one of corporate greed and corruption, and the company's collapse has had a lasting impact on the business world, including the passage of the Sarbanes-Oxley Act and the creation of the Public Company Accounting Oversight Board (PCAOB), which involved George W. Bush and Michael Oxley. The company's collapse has also led to a number of changes in the way that companies are regulated and audited, including the use of International Financial Reporting Standards (IFRS) and the implementation of Section 404 of the Sarbanes-Oxley Act, which affects General Electric, Procter & Gamble, and other publicly traded companies, including Johnson & Johnson and Coca-Cola. The Enron scandal has also been the subject of a number of books, films, and documentaries, including Enron: The Smartest Guys in the Room and The Crooked E: The Unshredded Truth About Enron, which involved Alex Gibney and Jason Kilar.

Category:Energy companies of the United States