WhereIsAtlas · Energy

Enron

The Wall Street darling that collapsed in weeks — one of the largest corporate frauds in history

Defunct — Once America's seventh-largest company and a Wall Street darling, Enron collapsed in 2001 after its fraudulent accounting practices were exposed — becoming a byword for corporate greed and one of the largest bankruptcies in US history.

Enron was formed in 1985 and grew into one of America's largest companies, a darling of Wall Street celebrated for its innovation in the energy trading business. To the outside world, it was a model of success, with soaring stock and leaders hailed as visionaries.

But the success was an illusion. Enron was using complex and fraudulent accounting practices to hide billions of dollars in debt from its investors. When a reporter began asking how the company actually made its money, the house of cards collapsed. In late 2001, Enron filed for bankruptcy — one of the largest in American history.

The scandal destroyed Enron's accounting firm, Arthur Andersen, one of the "Big Five" at the time. It also led to new legislation, the Sarbanes-Oxley Act, which imposed stricter rules on corporate accounting and governance. The company's top executives, including CEO Jeffrey Skilling and Chairman Kenneth Lay, were convicted of fraud.

Quick facts

Founded
1985
Peak
One of America's largest companies (7th largest)
The fraud
Complex accounting hid billions in debt
Bankruptcy
Late 2001
Fallout
Destroyed Arthur Andersen
New law
Sarbanes-Oxley Act (2002)
Executives
Skilling + Lay convicted of fraud

Sources

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