The Rise and Fall of Enron

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The Enron Corporation was founded in 1985 by Kenneth Lay and based in Houston, Texas. Enron was known as one of the world’s leading electricity, natural gas, communications and pulp and paper companies. By the late 1990s Enron was considered one of the country’s most groundbreaking companies constructing power plants, gas lines, buying and selling electricity and gas, and partaking in a unique trading business; creating whole new markets for oddball commodities. In 1995 annual revenues were around $9 billion and rose to over $100 billion in 2000. (Yahao, 2010) “White-collar crime is planned or organized illegal acts of deception or fraud, usually accomplished during the course of legitimate occupational activity, committed by an individual or corporate entity” (Benson, 2009 pg. 11).
In October of 2001 it was revealed that Enron’s financial condition was only sustained by systematic and creatively planned accounting fraud. Enron’s stock price dropped from $90 per share to $1 a share, with shareholders loosing around $11 billion. Enron found to have a loss of $586 million in the previous five years after reviewing financial statements. Enron fell to bankruptcy on December 2, 2001. The Enron scandal is recognized as the largest bankruptcy reorganization in American history at that time and also the biggest audit failure with the termination of Arthur Andersen, one of the five largest audit and accountancy partnerships in the world. (Yahao, 2010) In this occurrence
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