Enron:What Really Happened? Essay

814 words - 3 pages

Enron was born on July 1985, when Houston Natural Gas merged with InterNorth natural gas Company based on Omaha, Neb, and Kenneth Lay who became Enron's CEO in February 1986. In 1989, Enron began trading natural gas commodities. The company eventually became the largest merchant in North America. Enron had 21 thousand employees, operated a 25 thousand-mile gas pipeline system. It was listed as the seventh-largest company in the U.S, with a revenue of nearly 101 billion of dollars. Its bankruptcy occurred on December 2, where Enron had listed 24.7 billion dollars in assets.The collapse of energy giant Enron is the largest bankruptcy and one of the most shocking failures in United States corporate history. It embraced new technologies, established new methods of trading in energy and seamed to be a shining example of successful corporate America. But the company's success, were based on artificial inflated profits, dubious accounting practices, and some say fraud. The firm's success turned out to have involved an elaborate scam. Enron lied about its profits and stands accused of a range of shady dealings, including concealing debts. The profits eventually did not show up in the company's accounts.As the depth of deception unfolded investors and creditors retreated, forcing the firm into bankruptcy in DecemberFor Enron employees and retirees themselves, the consequences were crystal clear from the day the company crumbled. To put it simple, they lost their savings. They watched their nest eggs evaporate. They lost trust in both the personal and fiscal sense of the word in the system. Millions of other workers around the country who have been following the sad stories of Enron's employees have grown anxious about their own accounts and their own retirement security. Most Americans used to count on traditional defined benefit pension plans in addition to their Social Security benefits, to support them in retirementHow did it all happen? First of all, Enron matched employee contributions with substantial amounts of its stock and prohibited employees from shifting that company contributed stock to a different investment until the age of fifty. Second of all, the company's culture actively encouraged accumulation of Enron stock. Enron's top management repeatedly promoted its stock through internal publications and communications. Leaving the question of legality aside for now, it is wrong for executives to enthusiastically recommend their company's stock into their savings. It is wrong for management...

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