Enron: Implosion in a Wave of Accounting Scandals
He says that Enron was a trading company whose main agenda was to grow stock prices, and keep their investors confident. The best way for this to happen was for Enron to have very little debt. At one point the company had grown to the seventh most succesful companies in America. A company doesn't grow so big and so fast without creating some debt. But Enron's debt meant an unreliable and undependable group of investors, meaning, people didn't want to invest in Enron because of its debt. To lose this debt Enron created new companies called LMJ and LMJ2 which all of the original Enron's debt was dumped into. These new businesses weren't for any sort of success. Their only job was to serve as a kind of pool for Enron's debts. Although this wasn't illegal, it would cause later problems for them.
Another tactic for attracting investors was reports of high profits and trading. Enron blatantly lied to investors in reports by overstating profits by $600 million. This was certainly illegal, and immoral.
To avoid anyone finding out about this, Enron auditor, Arthur Anderson, actually helped Enron by overlooking errors (or lies) and eventually shredding literally tons of documents and reports from Enron's books of profits and losses.
In the end, Enron was found out and their stocks went from almost $90 per share to $0.36. Investors and employees alike lost all they had and the company filed for bankruptcy. Now thousands of its employees are jobless and poor while their leaders, like Ken Lay (CEO), Anderson, and Jeff Skilling (CEO), and Andrew Falstow (CFO) are facing jail time.
I feel sort of glad that these liars who not only exploited their investors, but risked their employees welfare are facing jail time. But I feel bad for those who didn't have any doing in the illegal activities and stil had to lose their jobs.