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Unethical Practices Essay

1077 words - 5 pages

In just 15 years, Enron grew from nowhere to be America's seventh largest company, employing 21,000 staff in more than 40 countries. But 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 so they didn't show up in the company's accounts. As the depth of the deception unfolded, investors and creditors retreated, forcing the firm into Chapter 11 bankruptcy in December. More than six months after a criminal inquiry was announced, the guilty parties have still not been brought to justice. The Enron scandal has far-reaching political and financial implications.
A chorus of ...view middle of the document...

She claimed that Ken Lay was 'duped' and placed the blame on Jeffrey Skilling and Andrew Fastow.

While investigations continue, Enron has sought to salvage its business by spinning off various assets. It has filed for bankruptcy, allowing it to reorganize while protected from creditors. Former chief executive and Chairman Kenneth Lay have resigned, and restructuring expert Stephen Cooper has been brought in as interim chief executive. Enron's core business, the energy trading arm, has been tied up in a complex deal with UBS Warburg. The bank has not paid for the trading unit, but will share some of the profits with Enron. Centrica, part of the former British Gas, has bought Enron's European retail arm for £96.4m. Dynegy, a smaller rival, has won a key pipeline in the US after merger talks fell through. The pipeline was then resold to Warren Buffet. The power project in India's Maharashtra state - the biggest foreign investment project in India - is still for sale.
So the executives of the company knew that the company was going under. They lied to all of their employees and encouraged them to buy more Enron stock. As a result, a huge number of families had their life savings in Enron stocks. The executives SOLD their stock just before the stock price crashed because they sold the stock when the value was high, made billions collectively. After they sold their stock, the price crashed, and the families lost out. They could not have told the families that the company was going bankrupt, or the stock would have crashed sooner, and the executives would have lost their money but they didn’t. The price of the stock went from 90.00 a share, to about .02 cents a share that means that if you had $90,000 in Enron stocks “for example” before the crash, you would end up with just $20.00 after the crash. People who worked for Enron lost everything, including their homes. The Enron executives who knew the crash was coming and sold their stock quickly and quietly, stayed rich.
Enron's false accounting was not spotted sooner has prompted the accounting industry to take a hard look at itself. Hundreds of US firms...

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