Essay on The Enron Disgrace - 2857 Words

The Enron Disgrace: Abstract: Ray Bowen, a Citigroup banker at the time and now Enrons chief financial officer, once asked Mr. [Andrew Fastow] about a batch of complex equations that filled a whiteboard in the conference room next to the Mr. Fastows office. quot;You cant tell me you understand those equations,quot; Mr. Bowen commented to Mr. Fastow. Mr. Fastow replied: quot;I pulled them out of a book to intimidate people.quot; The Fastows headed to Mrs. Fastows native Houston in 1990, both taking jobs at a young company called Enron. Just five years old, Enron was starting to evolve from a natural-gas and pipeline company into a trading firm. Mr. Fastow was one of the first managers hired by Mr. [Jeffrey Skilling], who himself†¦show more content†¦Eventually it led Enron to collapse under the weight of mindbogglingly complex financial dodges. Last week brought the first criminal consequences, as former financial executive Michael Kopper pleaded guilty to charges that he helped build a web of partnerships that disguised Enrons waning fortunes and funneled millions to himself, Mr. Fastow and others. The plea made it clear the federal government is now preparing a case against Mr. Fastow. Finance and accounting remain the core of the Enron story, but the companys cowboy culture -- and the way top bosses such as Mr. Fastow and former Chief Executive Jeffrey Skilling inspired it -- are also key to understanding what happened in this historic business debacle. Only now is the full scope becoming apparent, amid government probes and a growing willingness by some former and current employees to speak about it. Enron executives lived large, beginning with fast cars. Porsches were one favorite. Former Enron Broadband Services Chief Kenneth Rice drove in Ferrari Challenge races, an exclusive series for the rich. quot;They were guys who could afford not only to buy Ferraris, but to wreck them,quot; says Todd Renaud, a former information technology director at the company. Sometimes, employees celebrated their deals or trading wins by heading off to a local strip club. Brittany L. Lucas, a dancer at a club called Treasures, recalls aShow MoreRelatedWhy Enron Collapsed?1143 Words   |  5 PagesWhat are the reasons why Enron collapsed? * Investments Enron dealt in energy. According to Infinite Energy, the first and main cause of Enrons collapse was failed investments. Enron invested money in fiber-optic networks, a power plant in India and water distribution in the United Kingdom, to name a few. 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