I know its an energy/gas company but what went wrong?
How did they get bankrupt?
What did Ken Lay and Jeff Skilling do?
2007-05-11 07:57:32 · 2 answers · asked by Anonymous in Politics & Government ➔ Law & Ethics
They lied about their earnings & profitibility, which inflated their stock. That's illegal. Lay & Skillings were charged with the lying. Others did too; especially their accounting firm, Arthur Anderson. Once the lie became public their lenders refused to renew their loans which was all that was keeping them in business. It's like continually paying off one credit card with another. If the card companies find out you don't have an income to make the payment & are only borrowing the $$, they'll cut your credit limit & the whole chain will collapse. Anyway, Enron' shares collapsed & all those who invested in them lost their money. Lay & Skillings were held up to especial public opprobrium because they encouraged all their employees to invest their retirement savings in Enron stock -- even when they knew the end was nigh & began selling their own -- or so it is charged. (Lay only sold a relatively small portion of his, so I'm not convinced he really was guilty. I would have probably voted to acquit)
2007-05-11 08:16:59 · answer #1 · answered by Anonymous · 0⤊ 0⤋
google is your friend
http://www.businessweek.com/magazine/content/02_02/c3765063.htm
http://pubs.acs.org/cen/topstory/8005/8005notw3.html
http://en.wikipedia.org/wiki/Enron
http://news.bbc.co.uk/1/hi/business/1780075.stm
http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial&hs=79Z&q=enron+scandal&btnG=Search
2007-05-11 08:02:42 · answer #2 · answered by arus.geo 7 · 0⤊ 0⤋