Bigger Than Enron Analysis

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Summary of Bigger than Enron In 2001, the nation was rocked by the collapse of Enron, a multibillion-dollar corporation that employed thousands of people and had affiliations right up to and including The White House itself. With all of the fraud and mismanagement that took place under the gilded roof of Enron, the question arises as to the involvement of others in the scandal, not the least of who is the firm of Arthur Andersen. In the 1990s, more than 700 U.S. companies were forced to correct misleading financial statements as a result of accounting failures, lapses, or outright fraud. Together with Enron -- the largest corporate bankruptcy in U.S. history -- these failures have cost investors an estimated $200 billion. What went wrong?! In "Bigger Than Enron," FRONTLINE correspondent Hedrick Smith…show more content…
With a pay package that included more than seven million shares and options, Dunlap stood to make more than $200 million personally if he could keep Sunbeam's stock price flying. In the spring of 1998, when Dunlap and his team ran out of tricks, Sunbeam corrected its books, declared bankruptcy, and the stock price plunged from $53 at its peak to just pennies today. In an ominous harbinger of the Enron scandal, the SEC discovered that Andersen accounting documents had been destroyed. In the case of Waste Management -- which in 1998 issued the largest corporate restatement before Enron -- the company had exaggerated its earnings by $1.7 billion. The SEC's investigation found a long-running cover-up -- not just by Waste Management, but by Andersen as well. Andersen and Waste Management paid a steep price in stockholder settlements, but no one went to jail. The SEC fined Andersen $7 million in June 2001, and Andersen promised to shore up its internal oversight -- but by then they were already deeply enmeshed in new trouble at

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