Enron Research Paper

Enron?! Many, like myself, may ask the question of who or what exactly Enron is. Enron Corporation was a company established around July 1985 after Houston Natural Gas pipelines merged with Omaha-based InterNorth. The company dealt in American Energy, Commodities, and Services based in Houston, Texas. With roughly 20,000 employees and a stock market on the “RISE”, 5 well educated individuals seemed to be the masterminds behind the “FALL” of Enron. That “FALL” would reveal one of the largest scandals amongst corporations in the United States. Kenneth “Ken” Lee Lay, born in Missouri received both his bachelors and master’s degrees in economics from the University of Missouri. An U.S. Navy veteran from 1968 to 1971, eventually earning his Ph.D.

in applied science from Southern Methodist University in 1975 and his MBA from Harvard in 1979. In 1990, Lay hired Skilling who would vastly become the chairman of Enron in 1991. Being promoted to president and chief operating officer in 1997 Jeffrey helped Enron with $27 Billion traded in a quarter. Lou Lung Pai, born in Nanjing, China was immigrated to America as an infant. Gaining both a bachelors and master’s degree in economics from the University of Maryland where his father was a prominent aeronautics professor. Employed for the federal government in the 1970s before joining Enron in 1987. Climbing the ladder to become CEO of EES in March 1997 until 2001 when he resigned. Possibly due to a divorce and his addiction to exotic dancers. It still remains a mystery besides he walked away with nearly $280 million. John Clifford “Cliff” Baxter, born in New York graduated from New York University. Like Kenneth Lay, Baxter was a veteran of the U.S. Air Force from 1980 to 1985. He was discharged from the military holding the rank of Captain. In 1987 from Columbia University he received an MBA. He worked in investment banking briefly before he joined Enron in 1991 where he rose to the executive position of chief strategy officer before his

Shortly after in August 2001, Kenneth Lay would be replaced by Jeffrey Skilling who would only hold the position for a mere 6 months. A memo would be sent out a day later from “Whistleblower” Sherron Watkins concerning the accounting issues (CNN, 2016). In August of 2001 the price of Enron stocks had declined tremendously to an estimated $36/share. Those stocks would continue to deteriorate, within 2 more months the shares were worth a whole $0.69/share. The rapid decline caught the eye of the SEC which began an investigation into Enrons accounting records. The truth was coming to light on how much the assets were being over exaggerated, and most cases ficticious. Investors were blinded and never really knew what the profits were because of all the cover up. Fastow covered an approximate $30 billion in debts. This is a true tragedy for all that were involved. Greed, hunger and manipulation of the traders to continue defrauding the world. It took Enron 24 days to file for bankruptcy. It is America’s largest corporate bankruptcy. 20,000 people left without jobs, $2 billion in pensions lost and years of life