Enron
Business Ethics
Enron Case
1. Using the options market more for gambling purposes to cover loss rather than insurance. The culture was if one of their employees was making a lot of money they didn't ask questions they didn't look too deep into where the money was going they eventually gave these people more money to spend and use, what they realized later on was that that employee wasn't very good. They were just lucky one time. They made some losses and had to get that loss back so they put more money in gambling trying to cover those losses and nobody checked what the employee was doing, and it caused the collapse.
2. Enrons bankers, auditors, attorneys did contribute to enrons demise, and their contribution was ignoring the obvious. Enron's bankers, auditors, and attorneys were some of the main people involved, and believed Enron's top executives. None of the bankers, auditors, or attorneys served time in prison or were convicted of crimes, but for such enormous corruption it seems impossible that no one had a clue.
3. In order to prevent the losses from appearing on its financial statements, Enron used questionable accounting practices. To misrepresent its true financial condition, Andrew Fastow, the Enron’s CFO, takes his role involving unconsolidated partnerships and special purpose entities. Taking advantage from the SPEs’s main purpose, which provided the companies with a specific way to raise money for various needs without having to report the debt in their balance sheets, Enron’s CFO directly ran these partnerships and designed them to purchase the underperforming assets.
4. There are many stakeholders invoved in the situation Enron created. Employees lost jobs, and all of their retirement funds. Enrons retirement funds were given in stock, and when the company went bankrupt, the stock was virtually worthless. Customers were involved, government, lawyers, bankers, prisons, court systems, and many others were involved.
Enron Case
1. Using the options market more for gambling purposes to cover loss rather than insurance. The culture was if one of their employees was making a lot of money they didn't ask questions they didn't look too deep into where the money was going they eventually gave these people more money to spend and use, what they realized later on was that that employee wasn't very good. They were just lucky one time. They made some losses and had to get that loss back so they put more money in gambling trying to cover those losses and nobody checked what the employee was doing, and it caused the collapse.
2. Enrons bankers, auditors, attorneys did contribute to enrons demise, and their contribution was ignoring the obvious. Enron's bankers, auditors, and attorneys were some of the main people involved, and believed Enron's top executives. None of the bankers, auditors, or attorneys served time in prison or were convicted of crimes, but for such enormous corruption it seems impossible that no one had a clue.
3. In order to prevent the losses from appearing on its financial statements, Enron used questionable accounting practices. To misrepresent its true financial condition, Andrew Fastow, the Enron’s CFO, takes his role involving unconsolidated partnerships and special purpose entities. Taking advantage from the SPEs’s main purpose, which provided the companies with a specific way to raise money for various needs without having to report the debt in their balance sheets, Enron’s CFO directly ran these partnerships and designed them to purchase the underperforming assets.
4. There are many stakeholders invoved in the situation Enron created. Employees lost jobs, and all of their retirement funds. Enrons retirement funds were given in stock, and when the company went bankrupt, the stock was virtually worthless. Customers were involved, government, lawyers, bankers, prisons, court systems, and many others were involved.