ENRON SCANDAL REPORT

On the Issue of Lifestyle

A Written Report

Presented to the

High School Department

Marist School – IBEd

In Partial Fulfillment

of the Requirement for

ABM 12

Presented by

ABA, MELEA
AGUS, MIKAEL
BESORIO, SOPHIA
CHIONG, JAMES
CRUZ, JOEMARI
DATUIN, RYZJAN
MAGALONG, VINCENT
MANUEL, MIRO
YU JECO, MIGUEL

12 – ABM

DECEMBER 2018
 I. COMPANY PROFILE
Enron Corporation is an energy company founded by Kenneth Lay in 1985. This
corporation were formed by two merged businesses: Houston Natural Gas Corp. and InterNorth.
Before it was named Enron, it was named HNG/InterNorth Corp. Enron Corporation was one of
the largest integrated natural gas and electricity companies in the world. It marketed natural gas
liquids worldwide and operated one of the largest natural gas transmission systems in the world,
totaling more than 36,000 miles. It was also one of the largest independent developers and
producers of electricity in the world, serving both industrial and emerging markets. Enron was
also a major supplier of solar and wind renewable energy worldwide, managed the largest
portfolio of natural gas-related risk management contracts in the world, and was one of the
world's biggest independent oil and gas exploration companies. In North America, Enron was the
largest wholesale marketer of natural gas and electricity. Enron pioneered innovative trading
products, such as gas futures and weather futures, significantly modernizing the utilities industry.
This business earned around $101.1 billion during 2000 before its bankruptcy.

Key ● Kenneth Lay (Founder,

peopl Chairman and CEO)
e ● Jeffrey Skilling (former
President, COO, and
CEO)Jordon Patkus (Current
President and CEO)
● Andrew Fastow (former CFO)
● Rebecca Mark-
Jusbasche(former Vice
Chairman, Chairman and CEO
of Enron International)
● Stephen Trauber (Interim CEO
and CRO)

The organizational fraud triangle

How fraud occurs within organizations can be understood by examining the elements that
comprise such actions. At an individual level, SAS No. 99 (Consideration of Fraud in a Financial
Statement Audit) issued by the Auditing Standards Board indicates that the occupational fraud
triangle comprises three conditions that are generally present when a fraud occurs. These
conditions include an incentive or pressure that provides a reason to commit fraud (personal
financial problems or unrealistic performance goals), an opportunity for fraud to be perpetrated
(weaknesses in the internal controls), and an attitude that enables the individual to rationalize the
fraud. While the fraud triangle focuses on individual-level constructs of fraud, such as localized
instances of cash or other asset appropriation by employees, the Enron example highlights fraud
at the organizational level – systemic organization-wide fraud and corruption. At the
organizational level, leadership, organizational culture and management control systems form the
three points of the organizational fraud triangle shown below.

Organizational Fraud Triangle

The fraud triangle illustrates that the most important lessons from Enron lie in the way
that a corporate culture championed by CEO Skilling overcame a sophisticated and widely
lauded set of management controls and in the importance of carefully balancing the core
concepts of leadership, organizational culture and control within organizations. Organization-
wide fraud is only possible when these three variables are configured in a way that enables – and
even fosters – manipulation and fails to prevent compliance failure. The linkages presented in the
diagram above provide managers in other organizations important, yet largely untold, insights
into Enron’s demise.

II. HOW THE SCANDAL HAPPENED?

A.) Background
On December 02 2001, Enron Corporation, an American energy -trading and
utilities company based in Houston, Texas, declared its bankruptcy after being proven to
have committed one of the largest audit and accounting frauds in business history. The
scandal was led by Enron Corporation’s executives who utilized fallacious accounting
practices which unscrupulously raised the corporation’s proceeds. However, Enron
Corporation, despite being at the climax of the scandal, experienced distinct company
growth by placing as the seventh-largest corporation at that time. After the fraud have
been discovered, the shares of each of the Enron Corporation’s executives traded as high
as $90.56 but plunged to below $0.30 in the bargain. Company payouts served as
compensation for the losses of the company’s shareholders. Nevertheless, former
company executives provided remedies to pay the shareholders through their own means.

B.) Situation/Close
Enron Corporation became successful in hiding mountainous debts due to the
“partnerships” they falsely generated. Some of the companies generated were even
 named after Star Wars characters, like Chewco, in short for Chewbacca. The company’s
GOP or Gross Operating Product also indirectly helped Enron Corporation cover its
unlawful business operations. The company’s tangled financial arrangements were kept
all hidden due to Enron planting about one-third of its myriad subsidiaries in offshore
havens and squirreled away its domestic assets in various tax shelters. In addition to this,
the company sustained its long-time deception because of their independent auditing.
Through this method, company executives have the ability to observe the current
formalities and avoid it to not lose their profitable consulting fees.

However, the main reason Enron Corporation avoided perception is that the
company invested in a particular kind of derivatives or had a complex financial
management which, because of its characteristics, such as recentness and ability to
withdraw from regulatory oversight altogether made several regulators become late to
observe and realize that unlawful accounting practices have already took place for a long
period of time. Despite of this, some regulators have already found alarming issues
going-on with Enron Corporation’s disclosure requirements for derivatives--which came
from the head of the Commodity Futures Trading Commission named Brooksley Born in
1997. It was even mentioned that House Banking Committee Chairman Jim Leach
scolded Born for two hours for her pro-reform leanings or by showing too much inquiry
according to The Wall Street Journal.

The long-time fraudulent business practices aided Enron Corporation to inflate its
proceeds by $600 million. However, even before the fraud’s revelation, company
executives have already started to sell $1.1 billion in the Enron stock which they owned.
Furthermore, Kenneth Lay, Enron Corporation’s head and founder, sent the company’s
employees an e-mail driving them not to sell their own stock and even suggested that
they should even buy more.

C.) Conclusion

The bankruptcy of Enron Corporation affected thousands of lives, especially the

company’s employees. When Enron already filed for the Chapter 11 Bankruptcy, 4,500
employees lost not only their current jobs but also their retirement savings which are
connected to their employment. Employees and investors became problematized with the
$60 billion losses which have put Kenneth Lay and his executives as the main suspects.
On January 23, 2002, Kenneth Lay was publicized to have resigned from the company as
its chairman but will remain seated on the board while his former executive committed
suicide.

Investors and employees have sued Enron and its accounting firm, Arthur
Andersen. Enron hired the firm to audit (examine) its finances—and to give advice on
how to hide its losses. That action and the shredding of important Enron documents have
cast a cloud over the entire accounting industry.

Employees and investors have instituted legal proceedings against Enron

Corporation as well as its accounting firm. The company hired the firm to examine its
 accounts and finances and to advice on how to hide its huge amount of losses. The
shredding of foremost Enron documents have made an extremely huge mark over the
entire accounting industry in a defeating manner.

The distinctive characteristic of the Enron Corporation Scandal is precisely that

the main suspects didn’t fully pay for the price. The executives who were responsible for
each false derivatives sold hundreds of millions of dollars’ worth of stock, while innocent
and obedient employees have carried the weight. Indeed, Enron isn't considered a
political scandal because it hasn't impugned Bush's character. But far more damning, it
has impugned his ideology.

III. AMOUNT OF MONEY INVOLVED

Enron was in a free fall by summer of 2001. Around the same time, analysts began to
reduce their ratings for Enron's stock. The stock descended to a 52-week low of $39.95. At
Oct.16, the company reported its first quarterly loss. To prevent further reduced earnings, Enron
closed its SPV so that it would not have to distribute 58 million shares of stock.

The company also restated earnings going back to 1997. Enron had losses of $591 million and
had $628 million in debt by the end of 2000. Enron had filed for bankruptcy at Dec 2, 2001.

After the U.S. Bankruptcy Court approved Enron's Plan of Reorganization, the new board of
directors changed Enron's name to Enron Creditors Recovery Corp. The company's new sole
mission was "to reorganize and liquidate certain of the operations and assets of the 'pre-
bankruptcy' Enron for the benefit of creditors." The company paid its creditors more than $21.7
billion from 2004 - 2011.

Jeffrey Skilling, Former Enron CEO, received the harshest sentence of anyone involved in the
Enron scandal. In 2006, Skilling was convicted of conspiracy, fraud, and insider trading,
resulting to a 24-year sentence, but in 2013 it was reduced by 10 years. As a part of the new deal,
Skilling was required to give $42 million to the victims of the Enron fraud and to cease
challenging his conviction.

IV. PEOPLE WHO ARE INVOLVED AND WHAT HAPPENED TO

THEM
Many people played a part in one of the indecent that happen in the world of business,
particularly the ENRON scandal. Many members who are involved in ENRON played different
roles throughout the release of the controversy and the trial it faced. Kenneth Lay and Jeffrey
Skilling were the main faces of the ENRON who are faced with multiple accusations due to the
release of the scandal of their business. According to the New York Times (2006), “Mr. Lay, who
as founder and chairman is accused of seven counts of fraud and conspiracy, and Mr. Skilling, his
chief executive, who faces dozens of counts, including fraud, conspiracy and insider trading.”
Let’s focus on the other members of the company that are involved in the said scandal. According
to the New York Times (2006), “Andrew S. Fastow was one of Mr. Skilling's first hires at Enron
in 1990. He raised the huge amounts of capital that Enron needed as it moved beyond its roots in
the natural gas business to blaze trails as an innovative energy powerhouse. At the same time, as
Mr. Fastow acknowledged in his guilty plea and also worked with other senior officers to disguise
Enron's deteriorating finances. Specifically, he helped to set up complex off-the-books
partnerships that Enron used to avoid disclosing losses. He also used the partnerships, he admitted,
to defraud Enron of millions of dollars for his own benefit. His wife, Lea, a former assistant
treasurer at Enron, was also ensnared in the fraud. She pleaded guilty to a misdemeanor tax offense
in 2004 for failing to report some gains earned from Mr. Fastow's accounting fraud. As part of his
plea, Mr. Fastow faces 10 years in prison and is cooperating with federal prosecutors. He could be
the first major witness at the trial of Mr. Lay and Mr. Skilling. Mr. Fastow and his wife still live
in Houston with their two sons. The names of two of the partnerships that Mr. Fastow set up —
LJM1 and LJM2 — were the initials of his wife and their sons, Jeffrey and Matthew.

Ben F. Glisan Jr. joined Enron in 1996 and became part of the inner circle that helped
conceive and execute several financing schemes that hid company losses. Mr. Glisan and Mr.
Fastow were among four senior Enron executives who secretly invested in a partnership known as
Southampton Place. Mr. Glisan invested $5,800, which returned close to $1 million in a matter of
weeks then later forfeited all of it. Originally indicted on more than 24 charges of conspiracy, fraud
and money laundering, Mr. Glisan pleaded guilty in 2003 to one count of conspiracy to commit
wire and securities fraud. He is serving a five-year sentence at a federal penitentiary in Beaumont,
Tex. Mr. Glisan is on the prosecution's list of potential witnesses in the trial of Mr. Skilling and
Mr. Lay. Mr. Glisan grew up and still has a home in Clear Lake, Tex., 30 minutes south of Houston.
He received a bachelor's degree and an M.B.A. from the University of Texas, Austin. He is married
and has two school-age children.

It was an infamous conference call, and Mark E. Koenig had allowed it to happen on his
watch. On April 2001, Mr. Koenig, then the director of investor relations at Enron, was managing
a call between Enron's executives and Wall Street analysts. Mr. Skilling began by laying out
Enron's performance in the first quarter. The company was reporting $425 million in earnings, he
said, another banner quarter but the call turned tense during an exchange between Mr. Skilling and
a hedge fund representative. Mr. Skilling ended the verbal joust by describing, on an open line, the
hedge fund man in profane language. (Transcripts of the call can still be found on the Internet.)
Prosecutors say he participated in and knew about efforts to mislead investors into thinking that
the company was financially healthy.

By August 2004, Mr. Koenig pleaded guilty to a count of aiding and abetting securities
fraud, a charge punishable by up to 10 years in prison. He also settled separate civil charges, paying
almost $1.5 million in fines and forfeitures. More important, as he awaits sentencing, Mr. Koenig
agreed to cooperate in the case against his former bosses. Mr. Koenig, who still lives in Houston,
made a small change to his plea deal, asserting that it was actually Mr. Skilling, not him, who told
analysts in July 2001 that a unit was reorganized for efficiency reasons when, in fact, it was done
to conceal losses. Still, Mr. Koenig acknowledged that he had conveyed the same misleading
information, as well as other deceptions, to analysts during that turbulent year.
 Lou Lung Pai headed several divisions at Enron, including Enron Energy Services, which
sold contracts to provide natural gas and electricity to companies for long periods. He was known
for running up large bills on the company expense account at strip clubs. His affair with an exotic
dancer ended his marriage in 1999, and he sold most of his Enron shares to settle the divorce. Mr.
Pai's take, more than $271 million, is the largest of any former Enron employee and has made him
the target of several shareholder lawsuits. Mr. Pai, who resigned from the company six months
before it filed for bankruptcy protection, has been questioned by federal prosecutors and S.E.C.
investigators but has not been charged with wrongdoing. Through his lawyers, he has said he was
not involved in promoting Enron stock and denies knowledge of any illegal, off-the-books
accounting. His name appears on a list of potential witnesses for the defense in the trial of Mr. Lay
and Mr. Skilling. Mr. Pai married the woman with whom he had the affair, and they live with their
daughter in the Houston suburb of Sugar Land, where they also have a stable for breeding and
training dressage horses. Until he, later, sold it. Mr. Pai owned a 77,500-acre ranch in southern
Colorado, which was the subject of several lawsuits over access and grazing rights.

Kenneth D. Rice held was known as a consummate salesman. Mr. Rice raced Ferraris and
motorcycles and was a favorite of Mr. Skilling, accompanying him on trips to Patagonia, the
Australian Outback and Baja, Mexico. He was indicted in 2003 on more than 40 charges, including
fraud and conspiracy. He and other executives in Enron's broadband division were accused of
making misleading statements about the capabilities of the technology and the performance of
their division, resulting in an artificial inflation in the value of Enron stock. Mr. Rice then sold the
stock at those high prices, the indictment said; he sold 1.2 million shares for more than $76 million.
Mr. Rice pleaded guilty in 2004 to one count of securities fraud and agreed to cooperate with
federal prosecutors. The other charges were dropped. The length of his jail term will depend on
how helpful he is to government investigators. He testified at a trial against co-workers accused of
fraud at Enron's broadband unit. The jury was unable to reach a verdict, and the case is to be retried
in September. Mr. Rice is also expected to testify against Mr. Lay and Mr. Skilling. Moreover, Mr.
Rice is a defendant in several shareholder lawsuits. With his plea, he agreed to forfeit a vacation
home in Telluride, Colo., cars, cash and other property totaling $13.7 million.He lives in Bellaire,
a Houston suburb, with his wife, a pediatrician who was his high school sweetheart. They have
four school-age children.

Greg Whalley, Enron's former president, once created a hypothetical futures contract for
Popsicles. He arranged for a truckload of real Popsicles to be delivered to the trading floor as
"payment" for his fellow traders. The truck broke down along the way, but the Popsicles arrived
intact. The Popsicles were just one way that Mr. Whalley, loosened up his fellow traders and
became a popular figure within Enron's burgeoning energy trading operation. In August 2001, after
Mr. Skilling left the company, Mr. Lay tapped Mr. Whalley to be the company's president. Weeks
later, after he realized the depth of Enron's financial woes, Mr. Whalley fired Mr. Fastow without
even waiting for formal approval from the company's board. Mr. Whalley did not return phone
calls or e-mail messages seeking comment. Since Enron's collapse, Mr. Whalley has been
questioned by federal investigators and sued by investors. He has cooperated with investigators,
but the legal cloud over him led a Swiss bank, UBS, to let him go shortly after it acquired Enron's
trading operation in 2002. He later landed at Centaurus Energy, the Houston hedge fund founded
by John Arnold, who worked under Mr. Whalley at Enron as a natural gas trader. At Centaurus,
he is in charge of developing new trading strategies, said one former Enron manager in the trading
operation.
 Nancy Temple must have been an almost irresistible hire to Arthur Andersen. At the time
she joined the firm in 2000, it was still dealing with a federal investigation of its audit work
for Waste Management. And Ms. Temple was a litigator who specialized in issues like accounting
liability. The Waste Management investigation led to a $7 million fine against Andersen in 2001,
at the time the biggest penalty ever imposed on an accounting firm but it was the accounting firm's
relationship with Enron that proved far more costly. Early in 2002, shortly after the energy
company collapsed, prosecutors charged Andersen with obstruction of justice for destroying
documents related to its audit work for Enron. The jury hearing the criminal case against Andersen
focused on advice that Ms. Temple gave to David B. Duncan, Andersen's lead partner on the Enron
account, in October 2001. The jurors concluded that she had improperly advised that references to
Andersen's concerns about Enron's accounting be removed from a memorandum. Earlier in the
case, prosecutors focused on another e-mail message that Ms. Temple sent to Andersen employees
that October, this one about the firm's "document retention" policy. Prosecutors contended that the
message was a subtle signal to the staff to destroy Enron-related files. Jurors said after the trial that
the shredding had not been a major factor in their decision. Ms. Temple's lawyer, Mark C. Hansen
of Kellogg, Huber Hansen, Todd Evans, & Figel in Washington, declined to comment on his client.
Ms. Temple, who is married and has an infant son, continues to practice law in Chicago.

Rebecca Mark was Enron's flashy ambassador abroad. A media darling in the late 1990's,
she ran various international business development divisions within the company. Ms. Mark was
twice listed on Fortune's annual index of the 50 most powerful women in business and was widely
reported to have been a rival of Mr. Skilling's to be named chief executive. But she later became
the subject of scorn because of bad bets, like a $3 billion investment in a power plant in India,
which provoked accusations that Enron had negotiated an unfair deal with the local government.
Ms. Mark was forced to resign in August 2000 when she was chief executive of Azurix , a fledgling
and financially shaky Enron water subsidiary. She sold her shares in Enron shortly after she left,
receiving $82.5 million. Ms. Mark agreed to pay $5.2 million, which was her share of a $13 million
settlement with Enron shareholders, although a judge earlier found no impropriety in the millions
from her Enron stock sales. She cooperated with a Senate committee that investigated Enron
improprieties in international deals and it is generally thought that she will be a witness in the trial
of Mr. Lay and Mr. Skilling. But she is not on the government's current witness list, and her lawyer
says she has not been subpoenaed. Now known as Rebecca Mark-Jusbasche, she divides her time
between homes in Houston and Telluride, Colo., as well as a ranch near Taos, N.M. She is married
to Michael Jusbasche, a businessman who was born in Bolivia.

Sherron S. Watkins is remembered for the letter she wrote as a company vice president in
August 2001 to Mr. Lay, describing improper accounting practices at Enron. Months later, Enron
collapsed. Ms. Watkins's prescient letter, made public in the Congressional investigation into the
company's collapse, brought her fame as a corporate whistle-blower. Ms. Watkins still lives in
Southampton, not far from the home of Mr. Fastow. Michael J. Kopper, a former confidant of Mr.
Fastow at Enron, used to live in the same area. She has since written a book with Mimi Swartz, a
Houston journalist, about Enron's fall, and formed a consulting practice, Sherron Watkins &
Company, which advises companies on governance issues. Ms. Watkins also delivers lectures
around the country, including one recent talk at the Pittsburgh Theological Seminary in which she
called for an overhaul of corporate ethics rules and enforcement in the United States. In responding
to a request for an interview, Ms. Watkins, who is on the witness list for the trial of Mr. Skilling
and Mr. Lay, said her lawyer had advised her not to speak with reporters at this time.

For months before Enron's demise, Vincent J. Kaminski warned superiors that the off-the-
books partnerships and side deals engineered by Mr. Fastow were unethical and could bring down
the company. As Enron's managing director for research, Mr. Kaminski was responsible for
quantitative modeling to assist the energy traders and other parts of the business. Mr. Kaminski's
disgust with Mr. Fastow's deals eventually exploded into an internal war with Enron's global
finance department in the fall of 2001. As his anger mounted, he refused to sign off on documents
related to the partnerships known as the Raptors that Mr. Fastow had created, and he instructed his
team of internal Enron consultants to refuse to do any work for the finance department. His efforts
fell on deaf ears. Earlier, in March 2001, he went to Mr. Glisan, the company's treasurer, and
presented a report from a midlevel analyst saying that Mr. Fastow's deals had created a threat to
Enron's survival, in part because of stock price "triggers" that would require bank loans to be repaid
if Enron's credit rating was downgraded and the stock price fell. Afterward, he found many
companies eager to hire him. He remained in the energy industry, working first at the Citadel
Investment Group, a hedge fund based in Chicago, and later at Sempra Energy and Reliant Energy.
Mr. Kaminski landed at Citigroup where he conducts quantitative modeling for the bank's trading
operation based in Houston. He also teaches at the business school of Rice University and has been
a contributing writer and editor of books on energy risk management and energy trading. Mr.
Kaminski is well known in the energy industry for his loyalty to the brainy minds he often recruited
from top universities worldwide. As Enron was collapsing, Mr. Kaminski helped all 50 of his
former research staff members find jobs elsewhere.”

V. INDIVIDUALS WHO ARE AFFECTED

They are plenty of individuals who were affected by the Enron Scandal. Here are some of
the victims:

1. Kenneth Lay: (Former Enron Chief Executive, Chairman and Board Member)

Lay took up the reins at Enron in 1986 after it was formed from the merger of two pipeline firms
in Texas and Nebraska. Prior to Enron’s collapse, he was credited with building Enron's success.
Lay resigned as CEO in December 2000, and was replaced by Jeffrey Skilling. In August 2001,
he resumed leadership after Skilling resigned. Lay resigned again in January 2002 after
becoming the focus of the anger of employees, stockholders and pension fund holders who lost
billions of dollars in this disaster.

2. Jeffrey Skilling: (Former Chief Executive, President and Chief Operating Officer)

Skilling joined Enron in 1990 from the consultancy firm McKinsey, where he had developed
financial instruments to trade gas contracts. Prior to becoming Chief Executive in February 2001,
Skilling was President and Chief Operating Officer of the firm. Skilling was also seen as a key
architect of the company’s gas-trading strategy. Skilling resigned his post as Enron’s chief
executive in August 2001 without a pay-off.
 3. Andrew Fastow: (Former Chief Financial Officer)

Fastow was fired in October 2001, when Enron made losses amounting to $ 600 million. Fastow
was allegedly responsible for engineering the off-balance sheet partnerships that allowed Enron
to cover its losses. Fastow was also found by an internal Enron investigation to have secretly
made $30 million from managing one of these partnerships.

4. Clifford Baxter: (Former Chief Strategy Officer and Vice Chairman)

Baxter was known to have been one of the Enron executives, who had opposed its creative
accounting practices. Baxter retired from Enron in May 2001. Baxter committed suicide in
January 2002.

5. Arthur Andersen

Arthur Andersen, one of the world's five leading accounting firms, was Enron’s auditing firm.
This means that Andersen’s job was to check that the company’s accounts were a fair reflection
of what was really going on. As such, Andersen should have been the first line of defense in the
case of any fraud or deception.

When the scandal broke, the US government began to investigate the company’s affairs,
Andersen’s Chief Auditor for Enron, David Duncan, ordered the shredding of thousands of
documents that might prove compromising. That was after the Securities and Exchange
Commission (SEC) had ordered an investigation into the speculative actions of Enron.

While Andersen fired Duncan, its Chief Executive Officer, Joseph Berardino, insisted that the
firm did not act improperly and could not have detected the fraud. Berardino conceded that an
error of judgment was made in shredding documents, but he still protested Andersen’s
innocence.

6. Employees and Pension Fund Holders:

The collapse of Enron has left thousands of people out of work. Thousands lost their personal
investments and pensions after the scandal broke out and Enron's stock plunged.

Many employees had personal pension funds made up of Enron shares - a common situation in
America, where occupational schemes based on final salary payments are increasingly rare and
money purchase schemes, known as 401(K) plans, are the norm. Employees at Enron were
encouraged to do so by the company, which also forbade them from selling their stocks, when
the company share price came down.

7. Investment Banks:
 a. Credit Suisse First Boston (CSFB) - played a central role in creating the
controversial partnerships that Enron used to hold billions of dollars of
unprofitable assets and that eventually contributed to its bankruptcy

b. JP Morgan Chase - was involved in the Enron tragedy. The investment bank was a
major lender to Enron and the bankrupt telecom group Global Crossing. Loan losses
related to Enron contributed to the bank's 2001 fourth- quarter loss around $ 332
million and JP Morgan was forced to put aside another $ 510 million in case of
future loan defaults.

VI. CONCLUSION

Enron was founded in 1985 by Kenneth Lay. In the merger of two natural gas transmission
companies, Houston Natural Gas and InterNorth, Inc. Thus called Enron in 1986. Enron was a
U.S. energy-trading and utilities company that perpetuated one of the biggest accounting frauds
in history. The shares traded as high as $90.56 before the fraud was discovered but plummeted to
below $0.30 in the sell-off after the fraud was revealed. The deal failed, and on December 2,
2001, Enron filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code.
Enron's $63.4 billion in assets made it the largest corporate bankruptcy in U.S. history until
WorldCom's bankruptcy the next year.
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