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Scandals: Enron and Fun Fact

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Scandals: Enron and Fun Fact
The 10 Worst Corporate Accounting Scandals of All Time
If there is one theme to rival terrorism for defining the last decade-and-a-half, it would have to be corporate greed and malfeasance. Many of the biggest corporate accounting scandals in history happened during that time. Here's a chronological look back at some of the worst examples.
Waste Management Scandal (1998)
Company: Houston-based publicly traded waste management company
What happened: Reported $1.7 billion in fake earnings.
Main players: Founder/CEO/Chairman Dean L. Buntrock and other top executives; Arthur Andersen Company (auditors)
How they did it: The company allegedly falsely increased the depreciation time length for their property, plant and equipment on the balance sheets.
How they got caught: A new CEO and management team went through the books.
Penalties: Settled a shareholder class-action suit for $457 million. SEC fined ArthurAndersen $7 million.
Fun fact: After the scandal, new CEO A. Maurice Meyers set up an anonymous company hotline where employees could report dishonest or improper behavior.
Enron Scandal (2001)
Company: Houston-based commodities, energy and service corporation
What happened: Shareholders lost $74 billion, thousands of employees and investors lost their retirement accounts, and many employees lost their jobs.
Main players: CEO Jeff Skilling and former CEO Ken Lay.
How they did it: Kept huge debts off balance sheets.
How they got caught: Turned in by internal whistleblower Sherron Watkins; high stock prices fueled external suspicions.
Penalties: Lay died before serving time; Skilling got 24 years in prison. The company filed for bankruptcy. Arthur Andersen was found guilty of fudging Enron's accounts.
Fun fact: Fortune Magazine named Enron "America's Most Innovative Company" 6 years in a row prior to the scandal.
WorldCom Scandal (2002)
Company: Telecommunications company; now MCI, Inc.
What happened: Inflated assets by as much as $11 billion, leading to 30,000 lost
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