Enron, the Smartest Guys in the Room.
Enron, the Smartest Guys in the Room.
Enron was involved in American’s largest corporate bankruptcy. It is a story about people, and in reality it is a tragedy. Enron made their stock sky rocket through unethical means, and in reality this company kept losing money. The primary value operating among the traders was greed, money, and how to make profits under any circumstance. The traders thought that a good trader is a creative trader and the creative trader can find any arbitrage opportunity. Arbitrage opportunity was defined for the trades as the opportunity to make abnormal profits. The traders rocked the prices of electricity over the roof on the consumers’ accounts. Traders discovered that they could create artificial shortages of electrical power so they could push the price of energy higher. With this strategy the west coast traders were able to make almost 2 billion dollars for Enron. The traders never stepped back and asked themselves if what they were doing was ethical; it is in their long term interest; does it help them if they totally defrauded California; does it advanced their goal in nationwide deregulation? Instead, they have pulled from every loop they could have to get the profit from California’s misery. It was released in the court that traders knew they are doing something wrong. The traders that were not comfortable with Enron’s style had only two options. They could have protected themselves from the guild by leaving the company or stay in the game, and blindly follow the orders from the authorities. Those traders would not ask any questions because they were afraid that they would only confirm what they suspected would be true. Therefore, they tried to protect themselves from remorse. We need to ask what the motivation of traders to behave this way was. It was the vision of fat bonuses and Enron’s ability to exploit the darker side of the traders. The traders lost their sense of morality. Once the traders accepted the idea of
Enron was involved in American’s largest corporate bankruptcy. It is a story about people, and in reality it is a tragedy. Enron made their stock sky rocket through unethical means, and in reality this company kept losing money. The primary value operating among the traders was greed, money, and how to make profits under any circumstance. The traders thought that a good trader is a creative trader and the creative trader can find any arbitrage opportunity. Arbitrage opportunity was defined for the trades as the opportunity to make abnormal profits. The traders rocked the prices of electricity over the roof on the consumers’ accounts. Traders discovered that they could create artificial shortages of electrical power so they could push the price of energy higher. With this strategy the west coast traders were able to make almost 2 billion dollars for Enron. The traders never stepped back and asked themselves if what they were doing was ethical; it is in their long term interest; does it help them if they totally defrauded California; does it advanced their goal in nationwide deregulation? Instead, they have pulled from every loop they could have to get the profit from California’s misery. It was released in the court that traders knew they are doing something wrong. The traders that were not comfortable with Enron’s style had only two options. They could have protected themselves from the guild by leaving the company or stay in the game, and blindly follow the orders from the authorities. Those traders would not ask any questions because they were afraid that they would only confirm what they suspected would be true. Therefore, they tried to protect themselves from remorse. We need to ask what the motivation of traders to behave this way was. It was the vision of fat bonuses and Enron’s ability to exploit the darker side of the traders. The traders lost their sense of morality. Once the traders accepted the idea of