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“POST-ENRON ERA WHERE FAILURE IS A CRIME” The rapid rise to power and precipitous downfall of Enron, a Houston-based energy corporation with assets estimated at $111 billion at its height, represents the most notorious corporate fraud and bankruptcy in United States history. Nonetheless, The Enron scandal acted like a catalyst in incorporation of stricter rules and regulations to be followed by the corporate world. Government regulations on so-called free market corporate business have emerged from the ruins of Enron. The failure of Enron, was the inception of a new era in the corporate world of America. The “post Enron era” is characterized by defined rules and regulations that impact the working of the organizations. Companies today are scrutinized on the basis of stricter laws. Enron was an American energy company based in Houston, Texas set up in 1985 by Kenneth Lay after merging Houston Natural Gas and InterNorth . As a consequence of the deregulated energy market in California, Enron rapidly acquired a large share of the US energy market and hired 21,000 employees at its apex. By 2000, Enron became the world’s premier electricity, natural gas, and communications corporation with assets (falsely) estimated at $111 billion in 2000. Furthermore, Enron was granted the title “America’s Most Innovative Company” six consecutive times by Fortune magazine. Such positive publicity bolstered Enron’s stock price and gave investors confidence in Enron’s financial stability. Such positive publicity boosted the stock prices and Enron rose to power. The company was making huge profits and the stock prices were rising till 2000. In 2000, Enron recorded its highest stock price 90 $. At this time, the company’s insiders started selling their stocks while encouraging employees and people to buy more stocks.
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The company’s plea for bankruptcy came as a bolt for everyone. The sudden bolt attracted government intervention. As it later turned out, the company was “running on empty” for years. As was later discovered, many of Enron's recorded assets and profits were inflated or even wholly fraudulent and nonexistent.
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This note was uploaded on 11/08/2011 for the course PHIL 106 at Penn State.

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