The rise and fall of Enron: May 25, May 25, Enron's origins date back to when it began life as an interstate pipeline company throughthe merger of Houston Natural Gas and Omaha-based InterNorth. From the pipeline sector, Enron began moving into new fields.
Many of the biggest corporate accounting scandals in history happened during that time.
Here's a chronological look back at some of the worst examples. Waste Management Scandal Company: Houston-based publicly traded waste management company What happened: Buntrock and other top executives; Arthur Andersen Company auditors How they did it: The company allegedly falsely increased the depreciation time length for their property, plant and equipment on the balance sheets.
How they got caught: A new CEO and management team went through the books. After the scandal, new CEO A. Maurice Meyers set up an anonymous company hotline where employees could report dishonest or improper behavior.
Enron Scandal Company: Houston-based commodities, energy and service corporation What happened: How they did it: Kept huge debts off balance sheets. Turned in by internal whistleblower Sherron Watkins; high stock prices fueled external suspicions.
Lay died before serving time; Skilling got 24 years in prison. The company filed for bankruptcy. Arthur Andersen was found guilty of fudging Enron's accounts. WorldCom Scandal Company: Telecommunications company; now MCI, Inc.
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Underreported line costs by capitalizing rather than expensing and inflated revenues with fake accounting entries. How he got caught: CFO was fired, controller resigned, and the company filed for bankruptcy.
Ebbers sentenced to 25 years for fraud, conspiracy and filing false documents with regulators. Within weeks of the scandal, Congress passed the Sarbanes-Oxley Act, introducing the most sweeping set of new business regulations since the s.
Tyco Scandal Company: New Jersey-based blue-chip Swiss security systems. Siphoned money through unapproved loans and fraudulent stock sales. Money was smuggled out of company disguised as executive bonuses or benefits. SEC and Manhattan D. Kozlowski and Swartz were sentenced to years in prison.
HealthSouth Scandal Company: Largest publicly traded health care company in the U. How he did it: Allegedly told underlings to make up numbers and transactions from Scrushy was acquitted of all 36 counts of accounting fraud, but convicted of bribing the governor of Alabama, leading to a 7-year prison sentence.
Scrushy now works as a motivational speaker and maintains his innocence.
Freddie Mac Company: Federally backed mortgage-financing giant. Intentionally misstated and understated earnings on the books. Allegedly booked loans as revenue, steered clients to insurers with whom AIG had payoff agreements, and told traders to inflate AIG stock price.Oct 14, · Energy giant Enron collapsed in , in what was then the biggest bankruptcy filing in U.S.
history. The company was brought down by a spectacular accounting fraud scheme, masterminded by its. From Volkswagen, to Martin Shkreli, to Sepp Blatter, here are the most compelling corporate scandals of Jan 16, · Arthur Andersen accounting firm dismisses David B Duncan, partner in charge of auditing Enron Corp, saying he ordered destruction of thousands of documents and e .
Jan 16, · A report in October by Enron's law firm, commissioned by the company to investigate an employee's allegations of improper accounting, concluded that Andersen auditors reviewed and approved of.
The Enron scandal, publicized in October , eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the de facto dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world.
In addition to being the largest bankruptcy reorganization in American history at that time, Enron was.
In addition to Andrew Fastow, a major player in the Enron scandal was Enron's accounting firm Arthur Andersen LLP and partner David B.
Duncan, who oversaw Enron's accounts.