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•In 1989, the firm business focuses from the regulated transportation of
natural gas to the unregulated energy trading market
•It has started the trading in energy sector and it was first time in the
world and due to that they gain the trust of customers
Turning Point
•In 1990, Jeffery Skilling is appointed as a consultant for the Enron
Finance Corp.
•He has started hiring of new skilled person and energy consultant
to grow their finance in trading of energy
•In NYSE the share revenue price was jumping very high and
customer had start to invest blindly
What went wrong ?
•Mark to Market method of accounting and Revenue
recognition
They ignore the accounting issue because they were taking the
fees $52 million per year
Jeffrey Skilling: Hide accountants to do poor financial reporting to
hide debt
Andrew Fastow: Mislead the Board of Director and auditing
committee on financial issues
•Aug 14, 2001, Skilling resign suddenly and Lay takes over
once again
They had lost their all client due to this case only
Jan 23, 2002: Lay resign as CEO. He later steps down from the
board of director