Taking a Look at the Enron Scandal

Enron is viewed by many as the quintessential corrupt corporate juggernaut. Corporations are nothing more than a collection of people. If a corporation is corrupt than it must be filled with corrupt employs, and led by a front office devoid of moral standards, right? Perhaps this is not entirely true. Certainly an element of corruption was present in the case of Enron, the number of corrupt employees may not have been as encompassing as presumed. When asked to rate their level of honesty, most would respond that they are honest. In actuality, most people are not completely honest, and their level of dishonesty is correlated with their ability to rationalize the dishonesty and preserve their self- image as an honest and admirable person

When you ask young people about the Enron scandal today, most of them have not even heard of it. The fact of the matter is, it is very relevant to young professionals today. Enron is the most recent story of classic Wall Street greed and fraud. However it is still argued today by different stakeholders who are is responsible. This essay will take the viewpoint from multiple stakeholders to use the Enron Scandal as an example to further explain American corporate corruption.

Enron began as a pipeline company in Houston in 1985. It profited by promising to deliver so many cubic feet to a particular utility or business on a particular day at a market price.

The use of insider information is illegal in the United States. Insider information is stock related information that can be obtained many ways to gain large, abnormal gains in the stock market. A popular way to gather inside information is from direct employees of the company. Information on stocks can either be illegal or legal. If the information is publicized for all current or future investors to use, then it isn't illegal. Illegal information becomes unlawful when it becomes privatized from the public, and to be only used by investors in the stock market. The action of using insider information isn’t considered illegal until the information is used in a stock market located in the United States, most commonly the New York Stock

Enron Corporation was an energy company founded in Omaha, Nebraska. The corporation chose Houston, Texas to home its headquarters and staffed about 20,000 people. It was one of the largest natural gas and electricity providers in the United States, and even the world. In the 1990’s, Enron was widely considered a highly innovative, financially booming company, with shares trading at about $90 at their highest points. Little did the public know, the success of the company was a gigantic lie, and possibly the largest example of white-collar crime in the history of business.

Often an ethical dilemma does not appear abruptly but can rather be the proverbial slow boiling of a frog as they say. Enron was an economic powerhouse in the early to late 90’s. Its financial success was due to a great understanding of the opportunities available in the energy market due to deregulation across the country. The company was founded on sound financial principles which turned to illegal recklessness over time. Key personnel succumbed to unethical pressures which built up slowly over time. Since the public’s trust of professionals in the accounting industry is paramount to society (Mastracchio et. al. 2015) this paper will discuss the ethics not exhibited in the Enron scandal which came to a head in 2001.

In my opinion the Enron scandal was one of the worst in American history. While we could argue many facets of the scandal the main talking point in my mind stems from the sheer level of corruption they managed to obtain. Which begs the question how far would the corruption have went had it not been for an insider blowing the whistle? It is estimated that Enron hid approximately 51.2 billion dollars worth of debt. They achieved this by utilizing several ingenious but unethical and illegal methods. However, the key to this scandal was the key involvement by the company which was supposed to be the watchdog. This is one of the major reasons SOX was created by the federal

In the year of 1985 after the federal deregulation of natural gas pipelines, Enron was born. The company was formed by merging the following two companies: Houston Natural Gas and InterNorth, a Nebraska pipeline company.

Ethics in the business world can often times become a second priority behind the gaining of profits and success as a company. This is the controversial issue that led to the Enron scandal and ultimately the fall of this company. Enron Corporation was an energy company, and in the peaks of their success, they were the top supplier of natural gas and electricity throughout America. Enron Corporation came about from a merger between Houston Natural Gas and InterNorth. Houston Natural Gas was a gas providing company formed in Houston during the 1920’s. InterNorth was a company formed in Nebraska during the 1930’s and owned one of America’s largest pipeline networks. In 1985, Sam Segnar, the CEO of InterNorth bought out Houston Natural Gas for $2.4 billion. A year later in 1986, Segnar retired and was replaced by Kenneth Lay, who renamed the company and created Enron. Enron was the owner of the second largest pipeline in America that measured over 36,000 miles. The company was also the creator of the “Gas Bank”, which was a new way to trade and market natural gas and served as an intermediary between buyers and sellers. As the company continued to develop, it became more of a trader rather than a producer of gas. This trading extended into coal, steel, water and many other areas. One of Enron’s largest successes was their creation of a website called, “Enron Online” in 1999, which quickly became one of the top trading cites in the world. By the year 2000 Enron as a company was

This report will analyse the groupthink’s concerns in the collapse of Enron. The collapse of Enron is less than three months, which Enron from a very prosperous company to a bankrupt enterprise. The collapse of Enron is one of the most grievous business failures in United States. This disastrous business failure had causes a large number of employees lost their jobs and retirement savings. Groupthink leads groups to make faulty judgments.

In the three excerpts that will be discussed in this report there is a theme. That theme is ethics or the lack there of. What all three of these cases have in common is that people were willing to trade in their reputations, their livelihood and in some cases their personal freedom to get what they wanted. In two of the examples, the prize they sought was money, pure and simply a case of greed. Importantly, these people already had significant wealth, and they were willing to take the chance on losing what they had already attained to get more. In the other case, the defendant’s ethics are what initiated his behavior.

Enron was a major commodities and energy company that was headquartered in Houston, Texas. It was a company once very respected and, in the eyes of the public, very profitable. It placed in the top 20 on the Fortune Global 500 in 2000, and its stock was considered at a time to be blue chip, guaranteed to make stable gains over time. Enron formed as a merger between two natural gas companies, Houston Natural Gas and InterNorth, officially becoming the company known as Enron in 1979, after newly appointed CEO Kenneth Lay moved the company’s headquarters and began a search for a name to replace the current operating name of HNG/InterNorth. Enron became one of the world’s prominent electricity and natural gas companies before its bankruptcy in 2001, employing over 20,000 employees. Its operations were largely focussed within the United States, but they had some international outreach. Upon officially becoming Enron, the company leadership slowly transitioned the focus of the company from energy production to trading and supply: making its profits off of margins of energy commodities it traded. It was named ‘America’s Most Innovative Company’ by Fortune for six consecutive years (1996-2001), largely because of the success of Enron Online, an electronic site that allowed users to trade energy commodities with the company. However, failures of Enron in the retail energy market, water market, and large investments into high-speed telecom that

The reprehensible story of the Enron Corporation’s rapid rise to success followed by their consequential disgraceful fall is one that has captivated the attention of the public for more than a decade. Not only was this scandal highlighted largely due to the widespread publication of the Enron Corp’s actions in the newspapers and television but must notably their substantial contradictory actions against not only basic ethics but Enron’s published Code of Ethics. Outlining the reputation of Enron, Kenneth Lay, Chairman and Chief Executive Officer (CEO), in a foreword within Enron’s Code of Ethics stated, “to be proud of Enron and know that it enjoys a reputation for fairness and honesty and that it is respected.” Even though Kenneth Lay spoke to the company as a whole on manners in ethics and good conduct, it was he and a number of other high placed executives who choose to ignore their own statements and act in complete disregard. When running an organization executives are held responsible and expected to maximize their shareholders interests and enhance overall capital gain while upholding to the practice of ethical processes and abiding by common governing virtues. Through the study of three key virtues (integrity, fairness, and justice) and applying them to the Enron case, it will quickly be seen how evident the leaders of this organization choose to neglect ethical practices and virtues to gain personal financial growth.

Enron Corporation was an American energy company formed by Kenneth Lay in 1985 in Texas. Enron was hugely popular with investors throughout the 1990’s rising to become the “seventh-largest company in America” with a stock price of $83.13 (over 70 times earnings) by December 31st 2000 .

The year was 1960, the man was Arthur J Rosenberg, and Tyco Company was the new investment company. Tyco began as a medical investment company and is solely responsible for developing the first laser beam used in medical procedures. By 1964 Tyco walked into the commercial aspect of investment. The company was booming and John Gaziano, became known as one of the top corporate managers in the world. . At this point in 1982 Tyco hugely expanded and was now involved in 3 areas of investment: Fire Protection, Electronics, and Packaging with an estimated value of $500 million. The 1990’s brought more success for Rosenberg and Tyco. Now being a global company, the name was changed to Tyco International and at this point was involved in over 30