The Enron scandal is the biggest white-collar crime in our era. A white-collar crime is not violent and usually deals with financial motivated situations. In this situation, ENRON officials were completely unethical. One topic that we covered during Case Study number 4 was the “Ponzi scheme” that included Bernie Madoff. This incident can be related to the ENRON scandal because ENRON used the same scheme.
Just like Bernie Madoff, ENRON misrepresented earning reports to get people to invest. The money that was invested was pocketed by ENRON officials and used for their own benefit. With sending out false numbers, this rapidly increased the number of investors that wanted to …show more content…
Embezzlement is defined by the attainment of monies and funding by employees and typically funds embezzled are intended for company use. Under the circumstances of the ENRON scandal, executives were essentially stealing money from their company by pocketing the investments. By doing this, ENRON ultimately went bankrupt. The lost amounted to 70 billion dollars.
Another situation that involved ENRON was when they bought shares of National Westminster Bank. ENRON was allegedly supposed to pay 20 million dollars in a limited partnership but NatWest only received 1 million. The rest of the money went to executives of ENRON and some employees of NatWest that were in on the deal. Many executives were charged with fraud, money laundering, securities fraud, mail fraud and conspiracy.
One term we learned this quarter was the “Sarbanes Oxely Act” in 2002. This act was created in response to the ENRON scandal “to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise.” This act is a direct term connected to the ENRON scandal and the unethical acts of the executives of the