Home Finance Easy Guide to Understanding ENRON Scandal Summary

Easy Guide to Understanding ENRON Scandal Summary

Easy Guide to Understanding ENRON Scandal Summary

An ENRON Scandal
Summary

The ENRON Scandal is considered to be one of the most
notorious within American history; an ENRON scandalsummary of events is
considered by many historians and economists alike to have been an unofficial
blueprint for a case study on White Collar Crime – White Collar Crime is
defined as non-violent, financially-based criminal activity typically
undertaken within a setting in which its participants retain advanced education
with regard to employment that is considered to be prestigious. The following took
place in the midst of the ENRON Scandal:

ENRON Scandal Summary: The Deregulation of ENRON

While the term regulation within a commercial and corporate
setting typically applied to the government’s ability to regulate and authorize
commercial activity and behavior with regard to individual businesses, the
ENRON executives applied for – and were subsequently granted – government deregulation.
As a result of this declaration of deregulation, ENRON executives were
permitted to maintain agency over the earnings reports that were released to
investors and employees alike.

This agency allowed for ENRON’s earning reports
to be extremely skewed in nature – losses were not illustrated in their
entirety, prompting more and more investments on the part of investors wishing
to partake in what seemed like a profitable company

ENRON Scandal Summary: Misrepresentation

By misrepresenting earnings reports while continuing to
enjoy the revenue provided by the investors not privy to the true financial
condition of ENRON, the executives of ENRON embezzled funds funneling in from
investments while reporting fraudulent earnings to those investors; this not
only proliferated more investments from current stockholders, but also
attracted new investors desiring the enjoy the apparent financial gains enjoyed
by the ENRON corporation.

ENRON Scandal Summary: Fraudulent Energy Crisis

In the year 2000, subsequent to the discovery of the crimes
listed in the above ENRON Scandal Summary, ENRON had announced that there was a
critical circumstance within California with regard to the supply of Natural
Gas. Due to the fact the ENRON was a then-widely respected corporation, the
general populace were not wary about the validity of these statements.

However,
upon retroactive review, many historians and economists suspect that the ENRON
executives manufactured this crisis in preparation of the discovery of the
fraud they had committed – although the executives of ENRON were enjoying the
funds rendered from investments, the corporation itself was approaching
bankruptcy.

ENRON Scandal Summary: Embezzlement

An ENRON Scandal Summary of
the acts of Embezzlement undertaken by ENRON Executives may be defined as the
criminal activity involving the unlawful and unethical attainment of monies and
funding by employees; typically, funds that are embezzled are intended for
company use in lieu of personal use. While the ENRON executives were pocketing
the investment funds from unsuspecting investors, those funds were being stolen
from the company, which resulted in the bankruptcy of the company.

ENRON Scandal Summary: Losses and Consequences

Due to the actions of the ENRON executives, the ENRON
Company went bankrupt. The loss sustained by investors exceeded $70 billion.
Furthermore, these actions cost both trustees and employees upwards of $2
billion; this total is considered to be a result of misappropriated
investments, pension funds, stock options, and savings plans – as a result of
the government regulation and the limited liability status of the ENRON
Corporation, only a small amount of the money lost was ever returned.

Comments

comments

<