lecture 7, soc 149

lecture 7, soc 149 - ENRON: Rise towards disaster Who were...

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ENRON: Rise towards disaster Who were the players? What were the structural economic issues How do the theories of white collar crime explain what happened? What was learned from the disaster?
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The players Ken Lay Trained economist Son of a minister, had faith in deregulation A political operator Depended on cronies for success Huge sense of entitlement Wanted to avoid gritty details
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Ken Lay: early signs of trouble at ENRON Oil traders made lots of money for ENRON after first formed Lay payed little attention to details Managers used accounting tricks and dummy companies to inflate profits, skim money into personal accounts Bet on continued decline oil prices, but they went up during the mid 1980s To fix this, Lay allowed tricks
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Jeff Skilling Comes to ENRON from Consultant’s world Consultants ride in, are brilliant, collect money, leave No resposibility for long term Skilling hired to trade natural gas Gas Bank: Enron loans money to gas exploration; agrees to buy long term output; sells that to gas users
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This note was uploaded on 10/16/2010 for the course SOC 149 taught by Professor Parker during the Spring '10 term at UC Riverside.

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lecture 7, soc 149 - ENRON: Rise towards disaster Who were...

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