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Unformatted text preview: such as Arthur Anderson or the banks. But then again the auditors and the bankers did act unethically and did not need to be paid off. I did not know that Enron was part of the black outs in California, which was extremely profitable for them. I agree that the board of directors did not fulfill their fiduciary duties to shareholders. Towards the time when Enron was increasing its stock at extreme rates, they were making tons of money themselves and of course became greedy. But I wonder why they didn't take any action in the beginning. I don't think that the board gave the correct executive incentives. If they wanted to pay give out bonuses, they should have put caps on it. Since there wasn't a cap the top managers found loop holes to get more money for the company, which lead to infinitely higher bonuses....
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This note was uploaded on 06/07/2011 for the course ECON 101 taught by Professor Baker during the Spring '11 term at CUNY York.
- Spring '11