Morality Assignment: Summary of Enron: "Implosion in a Wave of Accounting Scandals" by Andrew Meuth


Andrew Meuth's article traces the rise and fall of Enron as well as shedding some light onto something most people are, for the most part, clueless about: what the scandal was really all about. The article starts by giving a brief overview of Enron. It was founded in 1985. It's business was the purchase and sale of business and commodities. Next, Meuth goes into detail about three of the biggest criminals in the scandal and what they did wrong. Andrew Fastow was Enron's Chief Fincancial Officer (CFO). He dumped Enron's debts into companies created by Enron such as LJM and LJM2, thereby keeping Enron's profits looking high. Ken Lay founded the company and was president and CEO. He turned a blind eye to the faulty accounting going on within the business and failed to report Enron's crimes. Arthur Andersen was the company's auditor, whose job it was to report any illegal activity and enhance the company's earnings. This conflict of intrests led him to neglect his first duty in favor of the second. When SEC started investigating Enron he shredded several tons of Enron related documents. These men in addition to their buisiness partners used false accounting to reap tons of profits without seemingly no expense. However, when people started questioning where the profits came from, shareholders started to worry about the safety of their investments. They quickly started selling and soon the price had plummeted to just pennies a share. When Enron filed for bankruptcy on Dec. 2 2001, many of the employees, including many that weren't nearly high up enough in the system to have any information about, let alone any part in orchestrating the scandal, had retirement plans and much of their income, mostly held in shares of the company, simply dissapear. Thousands of employees lost their jobs and had to start their careers over. Now the executives are undergoing an investigation and awaiting trial.

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