Enron And Its Impact On Corporate Business Practices

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Enron

Enron is a company infamous for one of the largest scandals in American corporate history. Over twenty thousand employees and thousands of outside investors had billions of dollars worth of shares in the company that positioned the company to be valuated at about 70 billion dollars with shares trading at about 90 dollars a share in 2001. However, from August to November 2001 Enron 's stock value dropped to $0.26, and those who had invested in
Enron lost billions of dollars within a couple of months. This record breaking stock drop landed the company on the Exchange Commission and the U.S. Justice Department’s radar resulting in an investigation that revealed the company’s corrupt business practices ultimately shocking the world,…show more content…
Sherron Watkins, a former Enron Vice President who was hailed as an “internal whistleblower”, said in an interview that Enron’s ambitious goals inflated many egos at the company. The mission statement went through several changes, but in 1995, its mission “to become the world’s leading energy company” “indicated a great deal of arrogance” says Watkins. In 2001, Enron’s mission statement was changed “to become the world’s leading company.” This rise in arrogance came from the company’s leadership, which would ultimately show evidence of fraud.
Jeff Skilling was promoted to COO and “transformed Enron from a sleepy pipeline company to an unregulated financial services company trading in energy futures, paper and pulp products, weather derivatives, airport landing rights and commodities” (Tshaonline.org, 2015) This strategy allowed Enron to go from making $13 billion a year to $100 billion leading to Skillings next promotion as CEO in 2001.
However, this growth was in large part due to accounting irregularities. These accounting irregularities were led by Andrew Fastow, the company’s CFO, who took advantage of the deregulation laws for energy companies in the 1990s to favor Enron. Following many deals as a result of the deregulations, Fastow was
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