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Jeffrey Skilling and the Enron Debacle: Part 10
The Impact Crater: Employees & Investors Lose Big on Enron’s Collapse There were several entities scarred by this massive corporate scandal. Perhaps the largest and most affected group of individuals from the Enron debacle were the Enron employees and investors....
Jeffrey Skilling and the Enron Debacle: Part 9
Bad Analysis: How Corporate Banking Culture Prevented Earlier Detection of The Fraud There were also some analysts who refused to put out bad advice by praising Enron to their clients. One of the most famous is John Olson, an energy analyst at Merrill Lynch who...
Jeffrey Skilling and the Enron Debacle: Part 8
Sherron Watkins: Suspicions Arise Within Enron’s Own Ranks Even though McLean was the first to publicly analyze Enron’s lack of transparency, it wasn’t until Sherron Watkins (VP of Corporate Development) began to inquire about Enron’s creative accounting methods that...
Jeffrey Skilling and the Enron Debacle: Part 7
Fortune’s Bethany McLean Pulls the First Thread on Enron’s Frauds Although Enron had been “cooking the books” for quite some time, it wasn’t until a columnist for Fortune magazine, Bethany McLean, wrote an article in the March 5, 2001 issue of Fortune entitled, "Is...
Jeffrey Skilling and the Enron Debacle: Part 6
Mixed Signals: Cheering & Jeering from Fortune and Others In the wake of the largest corporate bankruptcy the world had ever known, Enron ultimately became a tale of human tragedy forged from financial loss. There was also a great dichotomy in their downfall: The...
Jeffrey Skilling and the Enron Debacle: Part 5
The Nature of the Enron Scandal: Special Purpose Entities (SPE) A Special Purpose Entity, or “SPE/SPV”, is also referred to as a "bankruptcy-remote entity" whose operations are limited to the acquisition and financing of specific assets. The SPV is usually a...
Jeffrey Skilling and the Enron Debacle: Part 4
The Nature of the Enron Scandal: Mark-to-Market Accounting When Skilling joined Enron, he immediately called for change in the accounting method from the traditional “historical cost” to “mark-to-market cost”. This innovative change is so inherently tied to Skilling...
Jeffrey Skilling and the Enron Debacle: Part 3
The Nature of the Enron Scandal: Revenue Recognition The Enron scandal cannot be attributed to just one type of financial scheme or even just one person. Rather, it was an amalgam of complex events that contributed to the company’s eventual collapse. So complex, in...
Jeffrey Skilling and the Enron Debacle: Part 2
The Writing on the Wall: Early Enron Scandals Financial scandals ensued almost immediately at the newly dubbed Enron Corp. In 1987, two oil traders at the subsidiary Enron Oil Corp. were found to be diverting company profits to a Channel Islands account for personal...
Jeffrey Skilling and the Enron Debacle: Part 1
In 2006, Jeffrey Skilling was sentenced to 24 years in federal prison for his role in the historic 2001 collapse of energy giant, Enron. In 2013, the United States Department of Justice reduced Skilling’s sentence by a full ten years, and he is now eligible for...