Enron

What was 'Enron'

Enron was 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.

BREAKING DOWN 'Enron'

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.

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RELATED FAQS
  1. When is a bond's coupon rate and yield to maturity the same?

    Read about some of the major business risks assumed by Enron and Arthur Andersen, its accounting partner, before its infamous ... Read Answer >>
  2. What are some high profile cases of companies who failed to be socially responsible?

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  3. How did Enron use off-balance-sheet items to hide huge debts and toxic assets?

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  4. Do common stock owners have any protections against bankruptcy or fraud?

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  5. After Enron, are SPVs / SPEs considered good business practice?

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