Case Study Of Enron

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Recommended: Nature of issue Enron company faced

Introduction
The Houston based commodities, energy and service corporation Enron was involved in one of the biggest fraud cases in the United States of America. Underlying the fraud was the deception of reports and statements that gave a very inaccurate and misleading view about the company.

The Organisation, Time and Place

Enron Initiated as an interstate pipeline company through the merger of Houston Natural Gas and Omaha-based InterNorth in 1985.(The rise and fall of Enron: a brief history, 2006)
With this merge the previous CEO of Houston Natural Gas, Kenneth Lay, advanced and became the new CEO of Enron. He was very quick to rebrand Enron into an energy trader and supplier. In the year of 1999, Enron began to widen their scope …show more content…

It revealed that the firm’s success was due to an elaborate scam ranging from shady dealings to concealed debts. (Enron scandal at-a-glance, 2002). The year of 2001 was pivotal in revealing the depth of this deception. In August that year the company’s CEO Jeffery Skilling announced his departure, having been CEO for six months. The unexpected resignation was followed by many stakeholders selling large amounts of Enron stocks as the price continuously dropped. It reached a point where it was selling less than a dollar from a peak price of $90 per share. (Folger, 2011) Following the month of October saw Enron report a loss of $618 million, its first quarterly loss in four years. (The rise and fall of Enron: a brief history, 2006. The SEC opens a formal investigation into Enron’s dealings so they can get an insight into the activities that took place that resulted in the company making the abnormal loss. All attempt to sell the shares of the company ceased as there was too much debt in the company that had not been disclosed. in December, Enron filing for bankruptcy protection with $38 million in outstanding debt (Folger,

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