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Eron Scandal

The document summarizes how several individuals and institutions were adversely affected by the collapse of Enron Corporation: 1. Kenneth Lay, the CEO who founded Enron, saw his career work wasted as the company he led was embroiled in a major scandal and bankruptcy. 2. Jeffrey Skilling, Lay's successor as CEO, lost his career and job and was imprisoned for his role in misleading investors about Enron's finances. 3. Andrew Fastow, the CFO who disguised Enron's true financial situation, was also imprisoned for his fraudulent acts. 4. Arthur Andersen, Enron's auditor, was convicted for shredding Enron documents and ultimately destroyed by the

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99 views2 pages

Eron Scandal

The document summarizes how several individuals and institutions were adversely affected by the collapse of Enron Corporation: 1. Kenneth Lay, the CEO who founded Enron, saw his career work wasted as the company he led was embroiled in a major scandal and bankruptcy. 2. Jeffrey Skilling, Lay's successor as CEO, lost his career and job and was imprisoned for his role in misleading investors about Enron's finances. 3. Andrew Fastow, the CFO who disguised Enron's true financial situation, was also imprisoned for his fraudulent acts. 4. Arthur Andersen, Enron's auditor, was convicted for shredding Enron documents and ultimately destroyed by the

Uploaded by

Angelie Flora
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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GSR

THE ERON COMPANY SCANDAL

Create a list of all the people who were adversely affected by the collapse of Enron Corporation not mentioned in the video (at
least 5 institutions or group of individuals). Explain how they were affected or would you say had their rights violated?  

1. Kenneth Lay
Lay is the Chairman and the Chief Executive Officer of the Enron Corporation
who is an energy economist who had both academic and government positions
throughout his career. He was deeply affected because the company he founded was
heavily involved in a huge scandal making all his hard works and dedication in his
company turn to waste. The Enron became one of the largest company who got bankrupt
that loss a lot of jobs and investments because of the people who turn a blind eye with the
financial aspect. If Ken Lay and the other executives were just transparent and honest
with the condition of their company, the issue might be promptly fixed and would not
have cause an additional problem that leads their company into bankruptcy.

2. Jeffrey Skilling
Skilling is the one who replace Ken Lay as the Chief Executive Officer when he
retired. He became the company’s CEO because Ken Lay was impressed with his
exceptional skills that helped the company rise to the top. He is one of the adversely
affected individual as he placed his intelligence into bad use and did not follow the code
of ethics. Instead of doing the right act, he made the world believe that the Enron is still
on top and nothing to worry even their company was the only financial institution that
time that cannot produce a balance sheet and cash flow with their earnings. Because of
his wrong acts, he did not only lose his career and job but he was also in prison for many
years.

3. Andrew Fastow
Fastow is the Enron’s Chief Financial Officer. He was familiar with the market
and knowledgeable in that field; making it drew the attention of Skilling who was that
time, looking for a remedy with the arising problem of the financial condition of Enron.
Fastow is the man behind who disguise the company’s true financial condition and
GSR

making it look that the Eron is not losing money and because of it, it led to a biggest
collapsed corporate company in the US history. He is affected with the Eron’s fall
because he got imprisoned with the acts he thought could save a failing corporation.
Ironically, he just received an award and named as the CFO of the year and also
committed a biggest fraud in the business history by doing the same deals.

4. John Clifford Baxter


Baxter is the former head of Eron’s trading unit who agreed to testify on the
fraudulent acts of Eron Executives but a month before the trial, he was found dead and
his death was declared as a suicide. The way he died was strange because why would he
commit suicide when he already set his mind to be a witness against the falsified
information of illegal transactions and unethical behaviors that the Enron shows to the
public.

5. Arthur Andersen LLP


Arthur Andersen is an American company that provides audit, tax, and
consultation services to large corporations such as Enrons’. The accounting firm failed to
give a proper attention with their role to oversee the financial state of Eron. The company
was convicted of obstruction of justice for shredding documents related to Eron’s audit.
Even though the Supreme Court reverse the conviction, the effect of the scandal
destroyed this firm and their name was already tarnished with bad reputation.

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