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 Enron - Houston, Texas Posted by:  JimmyEv
N 29° 45.337 W 095° 22.283
15R E 270693 N 3294062
Quick Description: It’s difficult to decipher the crimes that occurred inside the glass walls of this 691-foot tower, but the crimes that did occur shook America’s financial markets to the core.
Location: Texas, United States
Date Posted: 8/9/2007 7:18:08 PM
Waymark Code: WM1ZHW
Views: 136
Long Description:
| Enron was once an energy company,
running pipelines and selling natural gas. With deregulation of the
utility markets, the company diversified. It turned from an energy
producer to an on-line energy trader. No one could quite figure out
exactly what an ‘on-line energy trading company’ did, but it
seemed to produce loads of cash, making it a darling of Wall
Street. |
| Money would come in, money would be
shifted around; profits would be recorded on the financial
statement. Offshore partnerships named ‘Death Star’ and ‘Jedi’ were
set-up in the Carribean by the company’s Chief Financial Officer,
Andrew Fastow. Money was shifted to the partnerships and shifted
back; profits were recorded on the financial statement. Enron sold
products to the partnerships, and bought the products back; profits
were recorded on the financial statement. The stock price of the
company soared. At its apex, the company’s CEO, Jeffrey Skilling,
abruptly resigned and dumped at least $33 million of Enron stock.
Ken Lay came in to fill Skilling’s shoes, assuring everyone that
nothing was amiss. The stock price of the company began sinking.
The SEC opened criminal investigations. A month later, Enron wrote
off $1 billion of bad investments. A few weeks later, the company
adjusted its previous earnings down $600 million. Dynegy attempted
to buy the company, but it was too poisoned. By December, with $23
billion of debt, Enron declared bankruptcy and was liquidated.
The SEC investigation shed light on what was happening behind
the glass walls. The executives of Enron had used smoke and mirrors
– vague numbers, fake companies, nonsense language – to make it
look like the company was making money. This pumped up the stock
price. At its peak, the executives sold their stock holdings,
making millions before the price plummeted to nothing. |
 |
After the SEC investigation, at least
eight people, in addition to Lay, Skilling and Fastow, ended up in
jail. Ken Lay was found guilty on six counts of securities and wire
fraud. He died before sentencing. Jeffrey Skilling was found guilty
on 19 counts of securities and wire fraud. He was sentenced to 24
years in prison. And Andy Fastow, the master mind financial officer
behind the offshore partnerships, made a plea bargain. He was
sentenced to 10 years in prison and fined $24 million. The shock
waves of the scandal went past Enron, bringing about the
destruction of Arthur Anderson, the accounting firm that made the
sham possible. How much money Lay, Fastow and Skilling actually
made off of their stock dumping was never revealed.
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Louisiana |
Date of crime: 08/15/2001
Web site: [Web Link]
Public access allowed: Not Listed
Fee required: Not Listed
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