ENRON CASE SUMMARY

In 1999, Enron launched its broadband services unit and Enron Online, the
company's website for trading commodities, which soon became the largest
business site in the world. About 90 per cent of its income eventually came
from trades over Enron Online.
Growth for Enron was rapid. In2000, it ranked as the seventh-largest
company on the Fortune 500 and the sixth-largest energy company in the
world. However, cracks began to appear inOctober 2001, Enron reported a
loss of $618 million: its first quarterly loss in four years.
As a response to this problem, Enron' financial statements did not clearly
detail its operations and finances to shareholders and analysts. The
company's CEO used the mark-to-market accounting to misrepresent
earnings and modify the balance sheet to indicate favorable performance.
The U.S. Securities and Exchange commission launched an investigation into
investment partnerships led by Fastow. That investigation would later show
that a complex web of partnerships was designed to hide Enron's debt. On
Dec. 2, 2001, Enron filed for bankruptcy protection in the biggest case of
bankruptcy in the United States up to that point. Almost 5,600 Enron
employees subsequently lost their jobs.