Conspiracy of Fools

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“Conspiracy of fools” book report 1. Discuss how the top leadership, specifically Ken Lay, Jeff Skilling, and Andy Fastow, contributed to the collapse of Enron. The executive leadership was the main cause for Enron’s collapse. Their dishonesty, greedy and selfishness made them do things that changed Corporate America forever. Kay Lay was the CEO for many years. The number one mistake he made was to hire Jeffrey Skilling. Although he was brilliant at his field, Skilling was unqualified for the job. Ken Lay also let everything slip through. I do not consider him being the master mind of all the dishonest moves but he hired the people to do it for him. He was aware of everything that went on in almost every deal. Jeff Skilling the then Chief Operating Officer (COO) particularly contributed to the whole mess with a very creative idea. Looking for a way to profit at all cost, he came up with the idea of Mark to Market accounting. While the accounting was marked to market, it wasn’t being handle the traditional fashion way with trading prices dictating its value. Instead Enron used its own projections to account in the first year anticipated income from contracts that were a decade or more long. This caused the increase of the stock price without a solid base to justify its true value. This action set up the course for them to lie on every subsequent year to cover up the lies from the prior year. It became such a big snow ball of lies that it took down one of the biggest corporations in American history. Andrew Fastow made the company look it was in a great position beside the fact that Enron and its subsidiaries were loosing money left and right. His idea was to hide the assets that were creating losses by creating the Special Purpose Entities (SPE). The SPE were used to keep the assets off the books making the company look in a lot better shape than it
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