Thousand interviews of hundreds of people 10s of 1000s review of government & confidential papers. It's a story of biggest corporate scandal of America
In the beginning and in the closing time period of 2002 and 2001 respectively. It was happened that America's largest company which deals in energy went bankrupt.
This bankruptcy introduced a new term in the history which is ENRONIZATION.
Its bankruptcy has brought down the main accounting firm named as Arthur Andersen and some top executives related to these two firms were involved to create this scandal.
Before Enron's scandal history has made these main scandals
- Global Crossing
All this scandals are involved criminality activities.
In this flow of scandals, all the criminal activities were made as the epidemic disease.
In the case of Enron it became an attractive quality to be shown as greedy management. This greed has created the interest conflicts in management and the investors who have invested their money considering it a very attractive investment and which were not mentioned. In the study of California, electric power was denied by the whole citizenry.
It looked to more important that the above reaches of American Corporate were involved in speculation and to one-minded goal to take up the stock prices, it doesn't the issue to what extent. Because some principals are involved to enjoy the access towards the highest level of political powers, the up and down suggests a component of crony capitalism. Eventually, which was in reality happened that was entirely incomprehensible towards the average mortal. The accounting and financial shenanigans were so complicated that just trying to create sense of them that was a little bit like probing the hidden objects of the quantum theory. And by this Enronization happened very sad happening in the history of American's corporate.
This book is purely shows the story of Enron scandal. It tries to clear the complexities and to make it large at the same point in time. The writer, Kurt Eichenwald didn't get success even one object of this writing that doesn't mean that this book doesn't have worth reading it is. The writer, a correspondent for journal, The New York Times, he has completed a prodigious achiever of reporting. He was seen to have ability to explore every surviving memo (except the celebrations of document into narrow pieces and removing of electronic-mail messages which went on towards the both Arthur Andersen firm and Enron corporate in the final days). He also succeeded in collecting information from many accountants, front-line executives, investigators, lawyers, a success that in itself contains commands admiration. Moreover, the papers he writes are reader-friendly. He knows how to manage to transfer a sense of giddy and confusion and nerve-neglected the tension that is incorporated in the company since many years before it fell. The writing is broken up into brief and short, narrow striped takes, each the study in the corporate stress, macho preening envy and humiliation. All this always help to make its, after all, a creative story about accounting which goes down easily.
Yet, the Enron main executives and Andersen's' accountants were doing what, remains unclear which was not transparent. The writer's decision is to atomize this story into hundreds or thousands of fragments leave it up to the person who is the reader to make them together, an activity that would not be easy if one has some advantage like advanced degree or knowhow about accounting.
Enron was at some time just an unknown pipeline company. After small span of time this firm started doing dealings at international level. This organization was more involved in the trades of power plants, water, and telecommunication and likewise in investments and in many more. These dealings and the involved accounting gyrations which accompanied these appearances and reappearances in the writer's vignettes, but this person don't build enough distance and even doesn't take enough time which was compulsory to explain how they make these things interconnect.
This book begins with making a promise that this is going to inform the reader something's which are fundamental about the current moment in the business history of America, but the main theme is soon released. Implicitly, the writer argues that the story of Enron is less means not a high account of doing criminality than of its gross incompetence, the book ''conspiracy of fools'' in a business environment risen in so complexity and hence given to the understood imperative risen the share values that no any person could really understand that what's going on. And in this story, the complexity of this raised in share prices itself became exculpatory. So, Kenneth Lay, who was chief executive officer of Enron, and Lay's handpicked successor named, Jeffrey Skilling, both of these persons are involved in all this situation Andrew Fastow,chief financial officer of the company was also involved in it. Yet the writer diligently recorded all the many early shown warning signs which were coming from different echelons of Enron's bureaucracy which are something was amiss; no doubt that is the most important strength of this book. So many warning bells were going on but it was difficult to take them seriously, it was Eichenwald's picture of neglecting and ignorance. All Directors of the firms are known for calling board meetings to make them awaked, but the people who were actually engaged with running and to keep it going on the company had succumbed to the Rip van Winkle dozes lasting years, strains credulity.
Whether they are involved or not, surely there are more to be helped in made of ''Enronization'' than was found in all these pages. Criminality, Incompetence, and greed are new characteristics on to the business landscape. What's new, when measured against 2 hundred years of the economic history, this is the world in which trade dealings are considered very attractive while investing activities are considered so boring, the mentality driven of Wall Street in which the value which is important is shareholder value. This firm was a classic situation of a business which has floating free of the firm's homely origins(initiation) to become a vertiginous, the virtualÂÂ high structure of paper entrepreneurialism, the dabbling in the businesses it didn't know next to do nothing about.
Here the dangers are clear, it's the time to find at what point of ignorance itself would be considered criminal activity, not just for the top level management but also for of many times all-too-clubby groups of directors of the corporation who are considered to be evaluated that what's the management is doing. The stakes, after all are enormous. Like, corporate insiders of some leading bankrupted firms have made off 3.3 billion dollars in stock sales, bonuses and all the other types of compensation means their firms was gone belly up. And with the same passage of time, these managers and executives colluded with the firms of Wall Street which collected a huge amount in the condition of underwriting charges, and recommending the companies with stocks they should be known to be in the condition of financial trouble.
However personal liability only enhances the term of ''Enronization.'' This phenomenon has to force other people to reckon with this larger issue: that's any economy singularly driven by provided finance and may be speculative trading generates overwhelming pressures which systematically cook the books in order to be or to sustain the artificial values on the capital (equity) market. ''Enronization'' should be the reason for us to re-examine the firms as public institution, every person that have to be subject to not less but more, regulation. Traditional wisdom to the opposite, shareholders is by not all the ways are the only constituency which counts. The power of companies and the economic reach like Enron which affects everyone -- suppliers, customers, employees, whole communities and regions. ''Enronization'' recommends that beyond the limitations of the matter which determine personal responsibility lays with the trickier terrain of the policing institutional behavior. Otherwise, we can be certainly more Enron's are headed in our way.
For writer the Enron's story is a strong association of the free market as the firm was in the last driven under by its worst business decisions. With that logic, Great Depression was the ultimate vindication of free market orthodoxy.