ENRON Scandal Summary

An ENRON Scandal Summary

The ENRON Scandal is considered to be one of the most notorious within American history; an ENRON scandalsummary of events is considered by many historians and economists alike to have been an unofficial blueprint for a case study on White Collar Crime – White Collar Crime is defined as non-violent, financially-based criminal activity typically undertaken within a setting in which its participants retain advanced education with regard to employment that is considered to be prestigious. The following took place in the midst of the ENRON Scandal:

ENRON Scandal Summary: The Deregulation of ENRON

While the term regulation within a commercial and corporate setting typically applied to the government’s ability to regulate and authorize commercial activity and behavior with regard to individual businesses, the ENRON executives applied for – and were subsequently granted – government deregulation. As a result of this declaration of deregulation, ENRON executives were permitted to maintain agency over the earnings reports that were released to investors and employees alike.

This agency allowed for ENRON’s earning reports to be extremely skewed in nature – losses were not illustrated in their entirety, prompting more and more investments on the part of investors wishing to partake in what seemed like a profitable company

ENRON Scandal Summary: Misrepresentation

By misrepresenting earnings reports while continuing to enjoy the revenue provided by the investors not privy to the true financial condition of ENRON, the executives of ENRON embezzled funds funneling in from investments while reporting fraudulent earnings to those investors; this not only proliferated more investments from current stockholders, but also attracted new investors desiring the enjoy the apparent financial gains enjoyed by the ENRON corporation.

ENRON Scandal Summary: Fraudulent Energy Crisis

In the year 2000, subsequent to the discovery of the crimes listed in the above ENRON Scandal Summary, ENRON had announced that there was a critical circumstance within California with regard to the supply of Natural Gas. Due to the fact the ENRON was a then-widely respected corporation, the general populace were not wary about the validity of these statements.

However, upon retroactive review, many historians and economists suspect that the ENRON executives manufactured this crisis in preparation of the discovery of the fraud they had committed – although the executives of ENRON were enjoying the funds rendered from investments, the corporation itself was approaching bankruptcy.

ENRON Scandal Summary: Embezzlement

An ENRON Scandal Summary of the acts of Embezzlement undertaken by ENRON Executives may be defined as the criminal activity involving the unlawful and unethical attainment of monies and funding by employees; typically, funds that are embezzled are intended for company use in lieu of personal use. While the ENRON executives were pocketing the investment funds from unsuspecting investors, those funds were being stolen from the company, which resulted in the bankruptcy of the company.

ENRON Scandal Summary: Losses and Consequences

Due to the actions of the ENRON executives, the ENRON Company went bankrupt. The loss sustained by investors exceeded $70 billion. Furthermore, these actions cost both trustees and employees upwards of $2 billion; this total is considered to be a result of misappropriated investments, pension funds, stock options, and savings plans – as a result of the government regulation and the limited liability status of the ENRON Corporation, only a small amount of the money lost was ever returned.