by Laine Parker
ABOUT THE ENRON SCANDAL:
- The company: Enron was an energy, commodities, and services company based in Houston, Texas. Before it went bankrupt in December of 2001, it had approximately 20,000 workers and claimed revenues of nearly $111 billion in 2000. The CEO at the time was Jeff Skilling.
- What happened: Shareholders lost $74 billion, thousands of employees and investors lost their retirement accounts, and many employees lost their jobs.
- Main players: CEO Jeff Skilling and former CEO Ken Lay were the main players.
- Penalties: Lay died of a heart attack before serving time; Skilling was sentenced to 24 years at Montgomery Federal Prison Camp in Montgomery, Alabama. Arthur Anderson was found guilty of fudging Enron's accounts. The company filed for bankruptcy.
- How they did it: They kept huge debts off the balance sheet; it was revealed in November 2001 that Enron's earnings had been overstated by several hundred million dollars.
- How they got caught: They were caught because high stocks prices fueled suspicion and also with help from whistle-blower Sherron Watkins, the vice president for corporate development.
- Interesting facts: 1) Fortunate Magazine named Enron "America's Most Innovative Company" for six consecutive years prior to the scandal; 2) Enron was once ranked the sixth largest energy company in the world; 3) Top Enron executives sold their company stock just before the company's downfall.