Related Docuements
En Ron
From SURESHOJHA
Enron Scandal
( from Wikipedia)The
Enron scandal
, revealed in October 2001, involved theenergycompanyEnron and the
accounting,auditing, and consultancy partnershipof Arthur Andersen. Thecorporate scandal
eventually led to Enron's downfall, resulting in the largest bankruptcyin American history at thetime. Arthur Andersen, which was one of thefive largestaccounting firms in the world, wasdissolved.Enron was formed in 1985 byKenneth Lay after mergingHouston Natural GasandInterNorth.
Several years later, when Jeffrey Skillingwas hired, he developed a staff of executives that,
through the use of accounting loopholes,special purpose entities,and poor financial reporting,
were able to hide billions in debt from failed deals and projects. Chief Financial Officer AndrewFastowand other executives were able to mislead Enron's board of directors and audit committeeof high-risk accounting issues as well as pressure Andersen to ignore the issues.Enron'sstock price, which hit a high of US$90 per share in mid-2000, caused shareholders to
lose nearly $11 billion when it plummeted to less than a $1 by the end of November 2001. TheU.S. Securities and Exchange Commission(SEC) began an investigation, andDynegy offered to
purchase the company at afire saleprice. When the deal fell through, Enron filed for bankruptcy
on December 2, 2001 under Chapter 11of theUnited States Bankruptcy Code, and with assets of
$63.4 billion, it was the largest corporate bankruptcy in U.S. history until WorldCom's 2002
bankruptcy.
Many executives at Enron were indicted for a variety of charges and were later sentenced to prison. Enron's auditor, Arthur Andersen, was found guilty in a state court, but by the time theruling was overturned at theU.S. Supreme Court, the firm had lost the majority of its customersand had shut down. Employees and shareholders received limited returns in lawsuits, despitelosing billions in pensions and stock prices. As a consequence of the scandal, new regulationsand legislation were enacted to expand the reliability of financial reporting for public companies.
One piece of legislation, theSarbanes-Oxley Act, expanded repercussions for destroying,altering, or fabricating records in federal investigations or for attempting to defraud shareholders.
The act also increased the accountability of auditing firms to remain objective and independentof their clients.
Timeline of Enron's Collapse
(http://www.washingtonpost.com)
2004
The first criminal trial involving former Enron Corp. executives opens with prosecutorscharging that the defendants conspired with Wall Street bankers to carry out a sham transaction.
Prosecutors argue in court papers that former Enron Corp. chief executives Jeffrey K.Skilling and Kenneth L. Lay should stand trial together because they engaged in a "singleoverarching conspiracy" to enrich themselves by inflating the company's stock price.
A federal judge in Houston agrees to postpone for five months the criminal trial of several former executives in Enron Corp.'s Internet division.
The chief operating officer of Enron Corp.'s failed Internet unit pleads guilty to a singlecriminal conspiracy charge and agrees to cooperate with the government.
Enron Corp.'s former investor relations chief pleads guilty to one count of aiding andabetting securities fraud and agrees to help prosecutors with their ongoing probe.
Lawyers for former Enron Corp. executives Jeffrey K. Skilling and Richard A. Causeyask a judge to separate their clients' trials from the case against Kenneth L. Lay, the company'sonetime chairman.
Lawyers for former Enron Corp. chief Kenneth L. Lay urge a federal judge to cut himloose from a broader fraud case and send him to trial alone within weeks, but the judge deflectsLay's request for a trial to start Sept. 14.
Kenneth D. Rice, former chief executive of Enron Corp.'s Internet broadband unit, pleads guilty to securities fraud and agrees to cooperate with prosecutors.
Federal regulators order Enron Corp. to repay $32.5 million in energy-trading profitsmade before and during the West Coast electricity crisis three years ago.
A federal judge approves Enron Corp.'s bankruptcy plan, under which it would sellmost of its prized assets to repay creditors about 20 cents on the dollar in cash and stock.
Former Enron chief executive Kenneth L. Lay surrenders to federal agents, pleading notguilty to criminal charges. The government unseals 11 criminal charges against Lay of conspiracy, fraud and making false statements.
Lea Fastow is sentenced to one year in prison.
Lea Fastow reaches a new plea deal with prosecutors.
Lea Fastow, wife Enron's onetime finance chief, withdraws guilty plea after a judgerefused a deal that called for her to serve five months in prison.
Jeffrey K. Skilling, Enron's former chief executive officer, surrenders to authorities toface nearly three dozen fraud, conspiracy and insider trading charges related to the company'scollapse.
Former Enron chief accountant surrenders to authorities to face federal criminal chargesthat he served as an "architect" of a wide-ranging scheme to manipulate the company's earningsand improperly boost its stock price.
Former Enron chief financial officer Andrew Fastow and his wife, Lea Fastow pleadguilty to charges related to accounting fraud. Andrew Fastow is the highest ranking Enronexecutive to admit to wrongdoing. The guilty pleas will help prosecutors in the ongoinginvestigation against other top executives.
2003
Lawyers for former Enron chairman Kenneth L. Lay agree to turn over documentssought by the Securities and Exchange Commission, averting a courtroom fight.
Former Enron senior accountant Wesley H. Colwell agrees to pay a $500,000 fine tosettle government charges that he and other executives fraudulently manipulated the company'searnings, shifting energy-trading profits in California and other states to hide more than $1 billion in losses in 2000 and 2001.
Former Enron treasurer Ben F. Glisan Jr. pleads guilty to conspiracy to commitsecurities fraud, becoming the first executive at the scandal-ridden firm to go to prison. Glisanalso will forfeit $1.3 million in profits and penalties from a transaction that allegedly swindledhis own company.
JP Morgan Chase and Citigroup agree to pay for their roles in Enron's manipulation of its financial statements.
Judges order Enron and its lenders and creditors to attempt to negotiate a settlementwith shareholders.
Nine additional former Enron employees are indicted on various charges, includingAndrew Fastow's wife.
2002
Andrew Fastow pleads not guilty after being indicted on 78 counts of conspiracy.
A federal grand jury indicts Andrew Fastow on 78 counts of fraud and conspiracy, four weeks after he surrendered to the FBI and was released on $5 million bond.
Former chief financial officer Andrew S. Fastow is charged with securities, wire and mailfraud, money laundering and conspiring to inflate Enron's profit. Fastow is the highest-rankingEnron officer to face criminal charges for his alleged role in the company's collapse into bankruptcy last year.
Three British bankers are indicted on wire-fraud charges related to the Enron case.
Millions of dollars in assets held by Andrew Fastow and his family are frozen.
Michael Kopper, a former Enron executive, pleaded guilty to money laundering andwire fraud, becoming the first Enron official to be convicted.
A Senate committee, spurred by accusations from Sen. Joseph I. Lieberman (D-Conn.)that the White House was stalling to hand over Enron records, issued the first congressionalsubpoenas on the Bush administration.
David Duncan says he kept several potentially embarrassing Enron-related documents.
David Duncan, former Andersen auditor of Enron, tells a federal jury that he knew hehad committed a crime when he instructed his colleagues to destroy documents.
Several current and former Enron board members appear before a Senate subcommittee.
Internal Enron documents show that the company had a hand in manipulatingCalifornia's energy market with such maneuvers as transferring energy outside the state to evade price caps and creating phony "congestion" on power lines.
The House passes accounting reform package, calling for stricter oversight and stricter disclosure policies in wake of the Enron scandal.
Enron's post-collapse CEO Jeffrey MacMahon resigns, calling for outside leadership of the company.
Arthur Anderson breaks settlement talks with the Justice department in the matter of thedestruction of Enron related documents.
A House committee approves legislation passing a new auditor oversight board.
The Securities and Exchange Commission rejects Enron's bonus and severance plan,saying the firm did not reveal enough information about recipients of the proposed package.
Accounting firm Arthur Anderson continues to seek deferred prosecution in exchangefor an admission of wrongdoing in the destruction of Enron related documents.
Suicide note left by John Clifford Baxter, former Enron vice chairman, is released.
David Duncan, Arthur Anderson's lead Enron auditor, pleads guilty to obstruction of justice in destroying Enron-related documents.
of 00
En Ron
851 Reads
Info and Rating
| Category: | Uncategorized. |
| Rating: | |
| Upload Date: | 11/19/2009 |
| Copyright: | Attribution Non-commercial |
| Tags: |
Leave a Comment