ENRON
PROJECT

Gilbert Canda
Strayer University
LEG100 – Business Law I
Professor: Gloria Sodaro

Enron began as a domestic natural gas pipeline company which was established in Houston, Texas during 1930. After operating for thirty years, during the 1960s; Enron decided to expand its corporation into different segments in order to invest in the diverse levels of the energy market. In the late 1980s and early 1990s, Enron established a major change in the company’s operations by making the “move from being a domestic company to a global provider of energy products.” (History of the Workplace, 2003)
This will only create more opportunity for Enron to develop and in the mid and late 1990s, “further expansion of Enron’s activities continued, including a shift from a company based in physical energy assets to a provider of broader services, such as risk management, communications, and financial services.” (History of the Workplace, 2003)
The three men associated with the downfall of Enron include Kenneth Lay, Jeffrey K. Skilling, and Andrew S. Fastow. Kenneth Lay was the founder, and chief executive officer of Enron Corporation. Jeffrey K. Skilling was hired by Kenneth Lay as the replacement CEO, however, Skilling shortly resigned after “Enron shattered into scandal” (CBS News, 2006). Andrew Fastow was the chief financial officer for Enron. “Fastow was the chief financial officer who, according to documents, engineered many partnerships that eventually landed Enron in trouble” (CBS News, 2006).
Enron violated General Accepted Accounting Principles (GAAP), through misrepresented accounting information for Special Purpose Entities. This included, “failure to consolidate, selective use of the equity method of accounting, and failure to eliminate the impact of transactions among entities, failure to provide complete disclosure, and unfair financial reporting”