He became an economics major due to an economic class taught by his fromer professor Pinkey Walker. He attended the University of Missouri on a scholarship. It tells the story of how Enron rose to become the seventh largest corporation in America with what was essentially a Ponzi scheme, and in its last days looted the retirement funds of its employees to buy a little more time.Meticulously researched and character driven, Smartest Guys in the Room takes the reader deep into Enrons past-and behind the closed doors of private meetings.Lay was always a good student. No matter what your politics, 'Enron: The Smartest Guys in the Room' will make you mad.
He was also military drafted and later went on to Navy officers candidate school. The emphasis is on human drama, from suicide to 20,000 people sacked: the personalities of Ken Lay (with Falwellesque rectitude), Jeff Skilling (he of big ideas), Lou Pai (gone with 250 M), and Andy Fastow (the dark prince) dominate.He received his bachelor and masters degrees in economics from the University of Missouri. Enron dives from the seventh largest US company to bankruptcy in less than a year in this tale told chronologically.
He held many other job titles in his life span. From 1971-1972 he worked in the Federal Power commission as commissioners assistant. Form 1969-1973 he worked as a lecturer and an assistant professor.
Horatio Alger Award, Horatio Award, & Association of Distinguished Americans.Enron stemmed from a small company by the name of Houston Natural Gas, joined by a former Exxon employee, Kenneth Lay, in 1984. He won a Leadership Award, Private Sector Concil, Business Hall of Fame in Texas, 1997. Despite controversy the CEO of Enron won many awards. It wasn’t until the fall of Enron where his world came crashing down. He was naturally a nice person, very few people resented him.
At this time Enron was both a natural gas and oil company. In 1986, after many changes and more growth, the firm changes its name to Enron and relocated to Lay’s hometown of Houston, Texas. However, with Lay in charge, the company was able to fend off any buyouts, as well as expand twofold.
In fact, Fastow was said to have “created and served as director of some of the companies involved” (Probert) in this illusive financial strategy. The purpose of this tactic was to form an illusion of stable revenue for the firm, as previously mentioned. Enron’s CFO, Andrew Fastow, had applied a tactic where monetary values which stemmed from a compound system of commercial bodies were manipulated in the company’s favor. In 1987, for example, the company reported a loss of “$85 million” with a “true loss of $142 – 190 million” Of course this instant, as well as many others, was quickly covered up, thus creating the illusion that such losses were not as extreme as they actually were. However, throughout the rather ample gross earnings and overall success, the company still experienced financial struggle. Market-to-market accounting is a method that “rather than accounts reflecting actual profit, mark-to-market accounting allows for accounts to reflect estimated future profits” which would provide explanation for the corporation’s amazingly precise calculations of future earnings.
It was testified that the firm had an in-house system in which personnel “attempted to crush not just outsiders but each other” in order to climb the ranks. As well as a rather questionable means of gaining income, Enron also had a reputation for candid brutality. Come 2001, the formerly monumental enterprise would find its integrity being questioned, in such a way that its stock had begun falling immensely, having ascended from “$80 at the beginning of the year to the low 40s” (Helyar) by mid-august. After all, it was only a matter of time before the reality of Enron’s unethical conduct would backfire in such an immensely damaging way. So much so, that many employees inside the firm had nary a clue to the true nature of the circumstances.In a turn of events that would send shockwaves throughout the industry, the mega-enterprise would find itself exposing its own fraudulence for the entire world to witness.
Both Skilling and Lay, however, refused to admit to any wrongdoing on their parts. Andrew Fastow was sentenced to six years on criminal charges after testifying against Kenneth Lay and Jeffery Skilling, in 2006. Along with this, Enron’s entire workforce had lost their jobs many of them were ultimately taken to court on the same charges as other big name offenders in the scandal. Soon after, Enron had officially declared bankruptcy, provoking the revelation of the largest scandal in the modern business world.In the succeeding years, the entireties of Enron’s effects would be sold in an attempt to pay off its massive debts, which would include an “estimated $67 billion” to the “company’s 20,000 creditors However, it was estimated that those debt holders only received “20% to 40%” (Helyar) of the money due to them.
Lastly, Arthur Anderson itself was disbanded, along with all of Enron’s other auditors, and though it tried again, it never was fully able to rebuild its reputation as a result of its involvement in the scandal. Lay was also sentenced to prison time, but had passed away before any time could be served. Skilling was “sentenced to 24 years… on 19 counts”. In the end, however, such endeavors demonstrated even more failure for the mega-corporation. At first, this seemed like a long shot for the prosecutors, because Enron had their auditor, Arthur Anderson, approving every financially motivated decision and action. These cases had called for the parties involved having “knowing, willful, intentional misconduct”.
For example, when Jeffery Skilling attended Harvard Business School, ethics was not a normal part of the core curriculum. However, it would seem that certain moral standings were still undefined in the typical set of courses. In order to be right and just in the business world, especially as an accountant or manager, one must not only learn ethical behavior, but also be able to relate such behavior accordingly.
Nevertheless, nowadays moral behavior, as well as simple ethics, are being pushed in business schools, as supported by many studies, including that performed by “Penn and Collier (1985)” (Cox 4) and “Early and Kelley (2004)” (Cox 5). Evidence for this notion comes from the media’s interpretation of ethical scandals, such as Enron, showing that “business schools ha not sufficiently revised their curricula to cover ethic teaching business ethics” (Cox 1).
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