Question

Share a personal or media-related example related to ethics (i.e., share an accounting fraud/scandal story. Which...

Share a personal or media-related example related to ethics (i.e., share an accounting fraud/scandal story. Which company? Main players? How did they play it? How did they get caught? What were the penalties? What were the impacts on public/investors/employees?)

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Answer #1

ENRON SCANDAL

  • COMPANY:

HOUSTON BASED COMMODITIES,

ENERGY AND SERVICE CORPORATION

  • WHAT HAPPENED:

Shareholders lost $74 billion,thousands of employees and investors lost their retirement accounts, and many employees lost their jobs.

  • MAIN PLAYERS:

CEO JEFF SKILLING AND FORMER CEO KEN LAY

  • PENALITIES:

  Lay died before serving time, Skilling got 24 years in prison. The company filed for bankruptcy. Arthur Andersen was found guilty of fudging Enron's Accounts.

  • HOW THEY DID IT:

​​​​​​​ Kept huge debts off the balance sheet

  • HOW THEY GOT CAUGHT:

​​​​​​​ Turned in by internal whistle-blower Sherron Watkins, High stock prices fueled suspicions

  •   FUN FACT:

​​​​​​​ Fortune Magazine named Enron "America's Most innovative Company" for six years in a row prior to the scandal.

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