'Enron: What Caused the Ethical Collapse\r'

'It is not blue to identify one single person, who foundation be blamed for the collapse of Enron, because in that location was so many players in so many levels. We can’t find one responsible person, but there argon many person who divided up the blame for the scandal that turned Enron into the last poster child for fraudulent news report practices, and caused one of the largest bankruptcies in the us history. The blusher people involved internally at Enron were the executives, Kenneth Lay (Chairman and CEO), Jeffrey Skilling (President and CEO), and Andrew Fastow (CFO).\r\nThey built up a highly successful company, but presently they began to divert computer memorys into phony investments, and cashed their own old-hats, musical composition the price was unbosom high. From October 1999 to November 2001, Lay exchange a sum 1. 8 gazillion shares for $101 million. Altogether, 29 Enron officers pocketed $1. 2 gazillion from selling Enron shares, while unsuspectin g employees went broke. Simultaneously, while this was going on, more than than half of employees’ 401(k) savings, or ab give away $1. 2 billion, were invested in Enron stock, which were rendered worthless.\r\nThe president sent an email to the workers: the company had â€Å"never been stronger” and its future growth â€Å"has never been more certain”, so most of the workers held their stocks, because nothing could foresee what was about to happen. In Texas, the Teachers retirement system lost $35. 7 million in Enron stock, In Florida; the pension fund for teachers, put in employees, and county workers bought 7 million shares of Enron stock (the fund that covers 650,000 workers and 150,000 retirees estimate they lost $306 million).\r\nIn the end millions in 401(k) savings were lost. Enron was privacy massive losses by victimisation their strategy of â€Å"mark to market” accounting. Fastow was too found by an internal Enron investigation to have s ecretly made $30 million from managing one of these partnerships. Outside of the company, Arthur Andersen, the broad accounting firm responsible for Enron’s accounting and outside auditing, also shares nearly blame for the scandal.\r\nIn theory, companies cant get absent with cooking their books because honest, independent accounting firms are looking over their shoulders, protecting the public. In the case of Enron, however, Arthur Andersen failed at their duties. Four days before Enron reported a careen loss of $618 million for the third draw of 2001, one of Andersens top lawyers sent out a memo ordering his mental faculty to shred all Enron-related audit documents. Dvid Duncan got the maximum sentence for his crimes is ten years. redit rating agencys: computer address rating agencies like Moody’s, warning & Poor’s and skunk failed to inform investors how risky buying a company’s bonds might be, failed to mooring any problems with Enron until the company was nearly bankrupt, moreover downgrading its bonds on 28 November 2001. t S&P and Fitch told a Fortune reporter they had no intellection how Enron made its money. The lack of regulations, and the good relations with the White House, allowed Enron to have major regularise over policy in America. On economic policy, Enron cherished complete deregulating with no government interference.\r\nThey got it. On animation policy, Enron wanted no caps on electrical energy prices in California. They got it. On tax policy, Enron wanted elimination of the corporate alternative stripped tax. They got it. In the end these policies created the perfect environment for their unethical games. The ultimate example occurred end-to-end the year 2000 during the California Electricity Crisis. The Enron traders exported the gimcrack electricity from California to another state and later they take it back and sold it for a higher price. This causes 42 billion losses in Califor nia in three years.\r\n'