Enron Scandal: Who Are Responsible for Enron¡¦S Bankruptcy
Enron was once one of the world's leading electricity, natural gas, pulp, paper and communications companies. However, in December 2, 2001, Enron suddenly filed for bankruptcy. During the ten years before Enron¡¦s went bankrupt, Enron¡¦s management had started transferring Enron¡¦s funding to personal accounts and made fake balance sheets, which provided investors information about how this company goes. (Gibney, 2005) These illegal actions, performed by certain individuals, finally led Enron to go bankrupt. These people¡¦s unethical behaviors such as CEO (Chief Executive Officer) of Enron, auditors and journalists caused Enron to go bankrupt, and therefore are responsible for Enron¡¦s bankruptcy. First of all, the hypocrisy and dishonorable actions of Kennie Lay, the former CEO of Enron, led to Enron¡¦s bankruptcy. In August of 2000, when Enron¡¦s stock price reached $90, investors were told to buy the stock because Kennie Lay informed them that it would climb until more than $130. However, at this time, Kennie Lay started selling his stocks because he knew Enron¡¦s financial problems and predicted the stock price would drop off. (Sherman, 2002, p. 22-28) As an Enron executive, all of his concern should be focus on Enron¡¦s profits, but all he cared about was his property. When Kennie Lay noticed Enron¡¦s financial problem, he did not attempt to fix it, but made effort to maintain his own benefit and ignored the whole company¡¦s and investors¡¦ loss. His selfish and unethical behavior not only deceived the investors but also finally resulted in Enron¡¦s bankruptcy. Therefore, Kennie Lay is one of the causes of Enron¡¦s bankruptcy. In addition, auditors also played an important role in Enron¡¦s downfall. Auditors who were negligent of their duties caused Enron¡¦s bankruptcy. Jeffrey Madrick, an editor of Challenge Magazine and a contributing columnist to The New York Times, reported, ¡§most of the earning in three of the last five years were bogus¡Kapparently,