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KF5JRV > TODAY 02.12.18 15:09l 56 Lines 2996 Bytes #999 (0) @ WW
BID : 26157_KF5JRV
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Subj: Today in History - Dec 02
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Sent: 181202/1403Z 26157@KF5JRV.#NWAR.AR.USA.NA BPQ6.0.17
On this day in 2001, the Enron Corporation files for Chapter 11
bankruptcy protection in a New York court, sparking one of the largest
corporate scandals in U.S. history.
An energy-trading company based in Houston, Texas, Enron was formed in
1985 as the merger of two gas companies, Houston Natural Gas and
Internorth. Under chairman and CEO Kenneth Lay, Enron rose as high as
number seven on Fortune magazine’s list of the top 500 U.S. companies.
In 2000, the company employed 21,000 people and posted revenue of $111
billion. Over the next year, however, Enron’s stock price began a
dramatic slide, dropping from $90.75 in August 2000 to $0.26 by closing
on November 30, 2001.
As prices fell, Lay sold large amounts of his Enron stock, while
simultaneously encouraging Enron employees to buy more shares and
assuring them that the company was on the rebound. Employees saw their
retirement savings accounts wiped out as Enron’s stock price continued
to plummet. After another energy company, Dynegy, canceled a planned
$8.4 billion buy-out in late November, Enron filed for bankruptcy. By
the end of the year, Enron’s collapse had cost investors billions of
dollars, wiped out some 5,600 jobs and liquidated almost $2.1 billion in
pension plans.
Over the next several years, the name “Enronö became synonymous with
large-scale corporate fraud and corruption, as an investigation by the
Securities and Exchange Commission and the U.S. Justice Department
revealed that Enron had inflated its earnings by hiding debts and losses
in subsidiary partnerships. The government subsequently accused Lay and
Jeffrey K. Skilling, who served as Enron’s CEO from February to August
2001, of conspiring to cover up their company’s financial weaknesses
from investors. The investigation also brought down accounting giant
Arthur Andersen, whose auditors were found guilty of deliberately
destroying documents incriminating to Enron.
In July 2004, a Houston court indicted Skilling on 35 counts including
fraud, conspiracy and insider trading. Lay was charged with 11 similar
crimes. The trial began on January 30, 2006, in Houston. A number of
former Enron employees appeared on the stand, including Andrew Fastow,
Enron’s ex-CFO, who early on pleaded guilty to two counts of conspiracy
and agreed to testify against his former bosses. Over the course of the
trial, the defiant Skilling–who unloaded almost $60 million worth of
Enron stock shortly after his resignation but refused to admit he knew
of the company’s impending collapse–emerged as the figure many
identified most personally with the scandal. In May 2006, Skilling was
convicted of 19 of 35 counts, while Lay was found guilty on 10 counts of
fraud and conspiracy. When Lay died from heart disease just two months
later, a Houston judge vacated the counts against him. That October, the
52-year-old Skilling was sentenced to more than 24 years in prison.
73 de Scott KF5JRV
Pmail: KF5JRV@KF5JRV.#NWAR.AR.USA.NA
email: KF5JRV@ICLOUD.COM
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