Major Legal and Ethical Issues in Skilling v. United States Case
The Enron case sets profound lessons on the management of the present day businesses. The scandal was a white-collar crime: a non-violent, financial based criminal activity. Enron organization was formed in 1985 to trade in energy and supply. On the other hand, it participated in trading of securities and had a trading site called Enron Online (EOL). Thus, to have more members participating in EOL, Enron presented its credit and mastery in the energy sector to lure clients. In essence, its national reputation laid on the fast extension of its residential business and its consistently developing income and profit from trading. On the back of this reputation, Skilling was selected chief operating officer by Ken Lay, who then left after changing the entire of Enron to mirror his vision. Enron as a company started out with properly stated moral codes, but later started on getting into the undesirable practises because of its executive managers and their undertakings, which led to its fall. There are legal and ethical facts of Skilling v. …show more content…
For instance, they were credited with the success in the expansion of the company. However, the strategy was beyond the Enron’s ability to maintain and fund the activities and thus resulted in a secret complex problem of off-balance sheet financing. Accordingly, the company had to depend on its rapidly growing share price, which meant less cash flow generation for the company. Rumours spread that Enron’s earnings had been manipulated and it was later found out that the chief financial officer had taken advantage of the off-balance to become rich. The companies ' share prices dropped drastically; thus, Enron’s venture had to be shut down, and the company eventually filed for bankruptcy (Petrick and Scherer 45). Coincidentally, Skilling, the appointed chief executive officer,
The Enron case sets profound lessons on the management of the present day businesses. The scandal was a white-collar crime: a non-violent, financial based criminal activity. Enron organization was formed in 1985 to trade in energy and supply. On the other hand, it participated in trading of securities and had a trading site called Enron Online (EOL). Thus, to have more members participating in EOL, Enron presented its credit and mastery in the energy sector to lure clients. In essence, its national reputation laid on the fast extension of its residential business and its consistently developing income and profit from trading. On the back of this reputation, Skilling was selected chief operating officer by Ken Lay, who then left after changing the entire of Enron to mirror his vision. Enron as a company started out with properly stated moral codes, but later started on getting into the undesirable practises because of its executive managers and their undertakings, which led to its fall. There are legal and ethical facts of Skilling v. …show more content…
For instance, they were credited with the success in the expansion of the company. However, the strategy was beyond the Enron’s ability to maintain and fund the activities and thus resulted in a secret complex problem of off-balance sheet financing. Accordingly, the company had to depend on its rapidly growing share price, which meant less cash flow generation for the company. Rumours spread that Enron’s earnings had been manipulated and it was later found out that the chief financial officer had taken advantage of the off-balance to become rich. The companies ' share prices dropped drastically; thus, Enron’s venture had to be shut down, and the company eventually filed for bankruptcy (Petrick and Scherer 45). Coincidentally, Skilling, the appointed chief executive officer,