Enron was an American energy, commodities, and service company based in Houston, Texas which was formed in 1985. Enron employed approximately 20,000 staff and was one of the world's major electricity, natural gas, communications, and pulp and paper companies, with claimed revenues of nearly $111 billion during 2000. Enron was named "America's Most Innovative Company" for six consecutive years by Fortune.
In December 2001, Enron files for Chapter 11 protection, becoming the largest bankruptcy in the U.S. history at that time leaving thousand of workers with worthless stocks and pensions.
Enron company is a perfect example of fraud, greed and misrepresentation. Enron Executives only thought of themselves when they embezzle the funds that was intended for company use and for its employees. I would agree with the movie title the smartest man in the room since they've thought of market to market accounting scheme. The said scheme was used to trading securities, when you determine the actual value of the securities at that moment. They cheated their accounting books that they are not reporting any losses but would transfer them to off-the-books corporation.
The collapse of giant corporation is devastating as it affected million of lives, specially those workers who left clueless what had happen to their retirement benefits. As an MBA student it is very important for us to understand why this happened and we can avoid it in the future. Like the old saying goes, greed is the root of all evil, and that's clearly pictured in Enron's case.
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