Enron Corporate Fraud
A
CASE STUDY
ON
ENRON
CORPORATE FRAUD (2001)
Submitted by:
AMIT SHARMA
PGDM (016)/09-11
What is FRAUD?
In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and is also a civil law violation. Many hoaxes are fraudulent, although those not made for personal gain are not technically frauds. Defrauding people of money is presumably the most common type of fraud, but there have also been many fraudulent "discoveries" in art, archaeology, and science.
Types of FRAUD: * Fraud as a criminal act * Fraud for profit * Marriage fraud * Academic fraud * Fraud as tort
Elements of fraud:
Common law fraud has nine elements: 1. a representation of an existing fact; 2. its materiality; 3. its falsity; 4. the speaker's knowledge of its falsity; 5. the speaker's intent that it shall be acted upon by the plaintiff; 6. plaintiff's ignorance of its falsity; 7. plaintiff's reliance on the truth of the representation; 8. plaintiff's right to rely upon it; and 9. consequent damages suffered by plaintiff.
CORPORATE CRIME:
In criminology, corporate crime refers to crimes committed either by a corporation (i.e., a business entity having a separate legal personality from the natural persons that manage its activities), or by individuals that may be identified with a corporation or other business entity (see vicarious liability and corporate liability). Note that some forms of corporate corruption may not actually be criminal if they are not specifically illegal under a given system of laws.
ENRON CASE:
On October 16, 2001, Enron, the seventh largest corporation in the U.S., announced a $638 million loss in third-quarter earnings. On November 8, 2001, the company publicly admitted to having overstated earnings for four years by $586 million and to having created limited
CASE STUDY
ON
ENRON
CORPORATE FRAUD (2001)
Submitted by:
AMIT SHARMA
PGDM (016)/09-11
What is FRAUD?
In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and is also a civil law violation. Many hoaxes are fraudulent, although those not made for personal gain are not technically frauds. Defrauding people of money is presumably the most common type of fraud, but there have also been many fraudulent "discoveries" in art, archaeology, and science.
Types of FRAUD: * Fraud as a criminal act * Fraud for profit * Marriage fraud * Academic fraud * Fraud as tort
Elements of fraud:
Common law fraud has nine elements: 1. a representation of an existing fact; 2. its materiality; 3. its falsity; 4. the speaker's knowledge of its falsity; 5. the speaker's intent that it shall be acted upon by the plaintiff; 6. plaintiff's ignorance of its falsity; 7. plaintiff's reliance on the truth of the representation; 8. plaintiff's right to rely upon it; and 9. consequent damages suffered by plaintiff.
CORPORATE CRIME:
In criminology, corporate crime refers to crimes committed either by a corporation (i.e., a business entity having a separate legal personality from the natural persons that manage its activities), or by individuals that may be identified with a corporation or other business entity (see vicarious liability and corporate liability). Note that some forms of corporate corruption may not actually be criminal if they are not specifically illegal under a given system of laws.
ENRON CASE:
On October 16, 2001, Enron, the seventh largest corporation in the U.S., announced a $638 million loss in third-quarter earnings. On November 8, 2001, the company publicly admitted to having overstated earnings for four years by $586 million and to having created limited