A U.S. energy-trading and utilities company that housed one of the biggest accounting frauds in history. Enron's executives employed accounting practices that falsely inflated the company's revenues, which, at the height of the scandal, made the firm become the seventh largest corporation in the United States. Once the fraud came to light, the company quickly unraveled and filed for Chapter 11 bankruptcy on Dec. 2, 2001.


Enron shares traded as high as $85 before the fraud was discovered, but plummeted to $0.30 in the sell-off after the fraud was revealed. Shareholders received company payouts as compensation for their losses, but former company executives also settled to pay shareholders out of their own pockets. Enron was the first big-name account scandal, but it was soon followed by the uncovering of frauds at other companies such as WorldCom and Tyco International, and has become a symbol of modern corporate crime.

  1. William Cavanaugh III

    Chairman of the World Association of Nuclear Operators (a nuclear ...
  2. Enroned

    A slang term for having been negatively affected by senior management's ...
  3. Business Ethics

    The study of proper business policies and practices regarding ...
  4. Securities Fraud

    A type of serious white-collar crime in which a person or company, ...
  5. Chapter 11

    Named after the U.S. bankruptcy code 11, Chapter 11 is a form ...
  6. Cook The Books

    A buzzword describing fraudulent activities performed by corporations ...
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  1. What barriers to entry exist in the utilities sector?

    There are significant barriers to entry in the utilities sector, including massive infrastructure requirements and governmental ... Read Full Answer >>
  2. What was the Mahonia company and why did it become the subject of a lawsuit?

    In 1992, J.P.Morgan went into the energy trading business by creating a venture company called Mahonia Limited. At least, ... Read Full Answer >>
  3. Why did Tyco's financial statements attract the SEC's attention in 2002?

    Editor's Note: This information is accurate as of September 2008. Hot on the heels of the Enron bankruptcy, ominous rumblings ... Read Full Answer >>
  4. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  5. Do prepayments provide working capital?

    Prepayments, or prepaid expenses, are typically included in the current assets on a company's balance sheet, as they represent ... Read Full Answer >>
  6. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>

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