What happened at Enron?

Everyone knows at least a little of the history of Enron and the devastation it has created in the lives of employees is. It is a story that belongs in any discussion of ethical accounting processes and what happens when accounting standards and ethics are discarded for personal greed.Enron began in 1985 to sell natural gas to gas companies and businesses. In 1996, energy markets were changed so that the energy prices could now be decided by competition among energy companies instead of being fixed by government regulation. With this change, Enron began to function more as a means of a traditional energy supplier, negotiating energy contracts instead of buying and selling natural gas. The rapid growth of Enron has created excitement among investors and drove the share price. Enron grew, it spread to other sectors, such as Internet services and financial contracts are complex.To continue to grow at this rate, Enron began to borrow money to invest in new projects. However, because of this debt would make their earnings look less impressive, Enron began to create partnerships that keep debt from their books. A partnership created by Enron, Chewco Investments (the name of the character Star Wars Chewbacca) allowed Enron to keep $ 600 million of debt in the books showing the government and the people who own Enron stock. When the debt was not included in the reports of Enron, who made Enron seem much more successful than it actually was. In December 2000, Enron claimed to have tripled its profits in two years.In August 2001, the vice president Sherron Watkins of Enron an anonymous letter sent to the CEO of Enron, Kenneth Lay, describing accounting methods that she felt could lead Enron to "implode in a wave of accounting scandals." Also in August, CEO Kenneth Lay sent emails to its employees saying it should during the Enron share climbing. Meanwhile, he sold his shares to Enron.On October 22, the Securities and Exchange Commission (SEC) announced that Enron was under investigation. November 8, Enron said he overestimated earnings for the past four years by $ 586 million and debt was more than $ 6 billion next year.With these announcements, the price of Enron stock collapsed. This drop triggered certain agreements with investors that made it necessary for Enron to repay their money immediately. When Enron could not come up with the money to pay its creditors, said Chapter 11 bankruptcy.