Enron: The Smartest Guys in the Room

Enron was one of the biggest corporation in America. The rise, the downfall and the journey of Enron itself can be a big lesson for all the other corporate companies. Big successes usually come from some evil or do bring some evil with it. ‘The Smartest guys in the room’ the title itself clarifies the new and unique strategies brought forward by Enron. People in Enron felt so superior and drunk in the success that they stopped being human and lost humanity. All they could see was money and the…

There’s no known cure for greed. That said, the fall of Enron was inevitable from its inception, for whichever way the head goes, the body follows and with Ken Lay as the head, one could expect nothing less. Can a rotten tree produce good fruit? My initial response to the movie, “The Smartest Guys in the Room”, was to discuss Lay and Skilling. But a more careful consideration of the matter, I had to admit that they really weren’t the problem, even though they were the deed doers. None of…

business world are characterized by rapid expansion and then a following contraction. Enron falsified profits, took extreme risks, and rigged investments, all so that they could increase the size of their bubble. However, the bubble could only grow so large. Some were able to escape the bubble before it popped, but in the end nobody remained unscathed. The Enron bubble is a testament to the need for some regulation. Enron employed many questionable accounting practices to increase profits,…

1. One bad decision was made by Enron CFO Andrew Fastow. In an attempt to boost performance, Fastow created Special Purpose Entities (SPE) underneath Enron. The idea was for the SPEs to secure funds (generally via bank loans) and transfer these funds to Enron. The transfer would generally include an overvalued asset or service. Enron used the SPEs to hide debt and therefore making their financial statements look better. Fastow felt the pressure to meet financial expectations, but that doesn 't…

The book, “The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron” was written by Bethany McLean and Peter Elkind and was published in 2003. It was all about the company of Enron and the downfall of it all and the scandals associated with it. Enron was an American energy, commodities, and services company which was located in Houston, Texas. At one point in time, it was the 7th largest company worth almost about $70 billion. There were many scandals involved in all of this,…

facilitated the white-collar crimes at Enron including collusive networks, political influence and corruption, and the ideology of deregulation. Prior to its demise, Enron, an American energy, commodities, and services company, was one of Wall Street’s highest rated companies. Enron was regarded as one of the most powerful and successful corporations in the world. Unfortunately, as everyone would learn later rather than sooner, their success did not come without a price. Enron Corporation…

Culture of Enron The whole documentary was based on the failing of the ENRON Corporation. Enron was a company that was doing many illegal schemes and also was involved with the California energy crisis just to make the utility costs set out to be what the average American price was. Enron did anything they had to do, no matter if it was killing off the whole world, just to make money and keep themselves rich. People were getting robbed blind. No one could actually see all of the damage that they…

its demise, Enron, an American energy, commodities, and services company, was one of Wall Street’s highest rated conglomerate. Enron was regarded as one of the most powerful and successful corporations in the world. Unfortunately, as America would learn, their success did not come without a consequence. Enron participated in side partnerships with investment banks, and was involved in special purpose entities also known as off-the-books partnerships, in order to hide company losses. Enron also…

derivatives-related assets increased from $2.2 billion to $12 billion. They had deals in areas such as weather derivatives, water services, metal trading, broadband supply and power plant. Soon enough, Enron had more contracts than any of its competitors and could predict future prices with great accuracy. Enron seemed to always have steady, high profits. Behind the scenes, however, there was much more to it. Starting with the Vahalla scandal, the board learned that Louis Borget and Tom…

QUESTION 2 Start the question by defining a Ponzi and a Pyramid scheme; A Ponzi Scheme: "A con artist offers obligations that promise very high returns at seemingly very low risk from a business that does in fact exist or a secret idea that does not work out. The con artist helps himself to the investors' money, and pays a promised high returns to earlier investors from the money handed over by these and later investors. The scheme ends when there is no more money from the new investors"(Frankel…