Enron Disaster Essay

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Running head: THE ENRON DISASTER Case Assignment Business Ethics The Enron Disaster Introduction Enron was one of many companies that were created in the wake of the US government's energy initiatives that began in the late 1970s. In 1985 Houston Natural Gas merged with InterNorth and the two become known as Enron. Within a year Kenneth Lay, the former Houston Natural Gas CEO, become the CEO of Enron (Baker & Hayes, 2005). In 1990 Lay hired Jeffery Skilling. Mr. Skilling would later serve as the CEO of Enron. However, he would resign from that position in 2001. Kenneth Lay returned to the CEO position when Skilling resigned. One of the first people hired by Skilling was Andrew Fastow. Mr. Fastow generated companies that were designed to absorb any of Enron’s financial losses. This allowed Enron to appear to be doing much better financially than it really was (Madsen & Vance, 2009). By August of 2000 Enron’s stock was trading at $90.00 per share. This was an all time high for the company. However, by November of 2001 Enron’s stock had plunged to $1.00 per share. On December 2nd of that year Enron claimed bankruptcy and laid off thousands of employees. Not only did the company claim bankruptcy, but Lay, Skilling, and Fastow were facing numerous legal charges. Ultimately, Lay would die of a heart attack prior to being sentenced and Skilling would be sentenced to serve more than 20 years in prison. Fastow ended up serving as a witness for the prosecutor in the case against Enron and received a reduced sentence of only ten years. Mr. Fastow’s wife was also charged in the case and had to serve one year in prison. The collapse of Enron forced senators and even a U.S. President to get involved in the creation of a task force whose purpose is to identify methods what will strengthen the American's workers retirement

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