Enron

Kenneth Lay, former Chairman and CEO, and Jeff Skilling who was also a CEO and COO of Enron, had the major part in Enron when it collapsed and went bankrupt. Because of deregulations Ken Lay enter Enron in 1985 through a merger a vast network of natural gas and pipeline. Later, Enron grew into an energy trading company which was worth $68 billion in 2000. Lays family was poor, which made him ambitious to earn wealth regardless of the path he takes, hence, unethical professionalism at Enron. Enron took advantage of his decision to let gas prices float on the market. Rich Kinde found out about Enron’s oil scandal in 1987 by the misappropriation of

Upon watching the documentary, one could conclude that Enron’s bosses created a culture of pushing limits and taking risks. From the movie, we understand that Jeff Skilling was known to be a nerd as well as others within Enron. It seemed as though Jeff had woken up one day and decided to change himself by wearing contacts instead of glasses, changing is wardrobe, and doing some modeling. As he changed, so did others who worked under him for the fact that they saw Skilling as their hero. With time, it has been noted that Jeff became some sort of tragic figure. He became a man who was radically different than how he portrays himself. It was known that Skilling was a huge risk taker and he often talked about, and then started to manifest in trips that he began to lead with small groups and customers that were often times dangerous. These

Enron’s annual stockholder meeting in January 2001 was a study in corporate egotism. Executives met at a San Antonio, Texas hill country resort, and champagne and cigars were free for the taking. At this meeting, Lay boldly asserted that he expected Enron to become “the world’s greatest company.” On February 5, special bonus checks worth tens of millions of dollars were prepared for Enron executives. However, in what might have been the first outward sign of the trouble to come, Lay resigned as CEO in February 2001, keeping his position as chairman of the board, while Skilling was tapped to be his replacement.

Former chair financial officer Andrew S. Fatsow pleaded to two counts of conspiracy. Fatsow was sentenced to six years in prison (WashingtonPost, 2006). Michael J. Kopper former top aide to Fatsow pleaded guilty to two counts of conspiracy and was sentenced to three years and one month in prison (WashingtonPost, 2006). Former chief accounting officer Richard A. Causey pleaded guilty to one count of securities fraud. Causey was sentenced to five and a half years in prison (WashingtonPost, 2006). Andrew Fatsow, Michael Kopper, Richard Causey all testified against Kenneth Lay and Jeffery Skilling. Enron founder and former chairman Kenneth Lay was convicted on ten counts of fraud, conspiracy, and false statements to banks. He died six weeks after

Enron, the natural gas provider turned trader of natural gas commodities and in 1994, electric, was once touted as the seventh largest company in America. Kenneth Lay, founder, began changing Enron from just a provider into a financial energy powerhouse. Lay took advantage of the dot-com boom of the late 1990’s by creating Enron Online, an internet trading platform. Internet stocks were valued at astronomical prices and were all the rage on wall street, who accepted the increasing prices as normal (Investopedia). On December 2, 2001 Enron declared chapter 11 bankruptcy, resulting in the loss of twenty thousand jobs and billions of investor and creditor dollars. Enron, once designated as "America 's Most Innovative Company" by Fortune for six years consecutively, enacted massive financial fraud at the fault of its top level executives: Kenneth Lay, Jeffery Skilling, and Andrew Fastow.

CEO Kenneth Lay was a very smart man who always thought ahead of the curve. In his search for new opportunities, he started thinking about the deregulation of energy markets, particularly the natural gas market. Then in 1985, Lay eventually founded Enron in Houston, Texas. This was the result of merging two relatively small regional natural gas pipeline companies: Houston Natural Gas and InterNorth.

During the 1990s, Kenneth Lay, Enron’s CEO, and his top subordinate, Jeffrey Skilling, transformed the company from a conventional natural gas supplier into an energy trading company.

Lucas and Koerwer (2004) wrote, “every single thing that Enron did had shades of dirty play associated with it”. Ken Lay would say, "I always try to hire the best people for

The focus of the corporation soon changed direction once it was realized that investing in selling intangible assets on the market could provide easier and higher revenue returns. This type of trading on the open stock market, with little regulations is what allowed the infamous criminal acts to take place and led to one of the world’s worst bankruptcy cases in United States history. An investigation finally occurred when investors found suspicious stock prices increasing exponentially and a whistleblower raised concern that finally revealed the fraudulent operations of Enron’s top executives conspiring with multiple businesses.

He was the one who hired Skilling after a similar scandal in the 1980s nearly derailed the company, never concerned with ethics, only profits. Lay even sickeningly and psychotically compares his and Enron's criminal behavior, and the criticism of it, with the 9/11 attacks. All three started dumping their stock based on their most inside information months before the company tanked, and this forms the bases of the cases against Skilling and Lay, which are underway. Fastow opted to fink out on his bosses, after they set him up as the fall guy. If this film does not prove, once and for all, that the glorious myth of the free market is a fraud, nothing will.

The company Enron was formed in 1985 after two natural gas companies, Houston Natural Gas and InterNorth merged together. Kenneth Lay, former chief executive officer of Houston Natural Gas was named CEO of Enron and a year later, Lay was assigned to the chairman of Enron. A few years later, Enron launched a website to allow customers to buy stock for Enron, making it the largest business site in the world. The growth of Enron was rapid; it was even named seventh largest company on the Fortune 500 list; however things began to fall apart in 2001. (News, 2006). In the third quarter of that same year, Enron posted an enormous loss of over $600 million in four years. This is one of the reasons why one of the top executive resigned even though he had only after six months on the job. Their stock prices fell dramatically. Eventually, Enron filed for bankruptcy protection. This caused many investors to lose money they had invested in the company and employees to lose their jobs and their investments, including their retirement funds. The filing of bankruptcy and the resignation of one of the top executives, also led to an investigation by the U.S. Securities and Exchange Committee, which proved to be one of the biggest scandals in U.S. history. (News, 2006). All former senior executives stood trial for their illegal practices.

The roots of the lies start with former Enron CEO Kenneth Lay. This man helped bring together a number of smaller energy companies, namely InterNorth International and

In 1985, Houston Natural Gas and InterNorth, a natural gas pipeline company, merged, and Lay became CEO of both houses. In 1986, after many changes and more growth, the firm changes its name to Enron and relocated to Lay’s hometown of Houston, Texas. At this time Enron was both a natural gas and oil company. The company specialized in the moving of natural gas through its pipelines, extending thousands of miles across the continental United States. As the firm continued to flourish, it reformed its commercial approach by becoming a leading producer and distributer of energy in both the United States and the U.K., as well as becoming more involved in the trading market. Ambition and determination truly carried Enron to new heights, helping it to become one of the most powerful and innovative companies in the United States, even being “voted Most Innovative among FORTUNE'S Most Admired Companies” for “six years running” (Helyar). However, with much success, temptation arose, and good intentions were led astray. Damaging arrogance, risky behavior, and deception ultimately warranted the demise of the mighty Enron.

Strongest Causes of Action Due to the size and scope of the Enron collapse, as well as the roles played by top Enron executives such as Ken Lay and Jeff Skilling, prosecutors were forced not to search for possible causes of action but rather only to focus on the most powerful charges during the trail. In my opinion, the two strongest causes of action against Lay and Skilling were related to Fraud and Earnings Manipulation. Fraud is defined as “The intentional use of deceit, a trick or some dishonest means to deprive another of his/her/its money, property or a legal right.” (Dictionary.com, n.d.).

There was a vast number of ethical issues raised in the movie “Enron-the Smartest Guys in the Room” but the four I am going to focus on are listed below. Art Anderson, Ken Lay and all of the other executives did a number of unethical things which ultimately brought down Enron and affected thousands of employees and their futures. The bottom line was that each and every one of them acted out of greed for the almighty dollar.