Thursday, December 29, 2005

Enron - The Smartest Guys in the Room

So I watched the Enron movie last night. Definetly a must see for documentry fans. I can't think of a bigger scandle in American history in terms of corporate crime nor one that ruined so many lives. The above diagram shows how the scam worked in a nutshell.

There was one interview where a man's 401K went from $360,000 to $1,200 and you know he wasn't alone. How on earth does someone at the age of 55 recover from something like this.

It just baffled me that no one caught on to their scam earlier than the eventual wistle blower, but when you take a step back you realize this isn't just any ordinary company. Enron had virtually everyone in their pocket, from all the major investment houses to the Bush administration. It was absolutely unreal how much power they had. When one investment banker downgraded the stock, Enron would flex their muscle and have the bank fire him, when the California government got tired of being raped and stood up to the corporate giant, Enron launched a smear campaign and it's widely thought that the company is largely responsible for Arnold Schwarzenegger being elected.

The trial of Kenneth Lay and Jeffrey Skilling is sheduled for January 2006. Contrarty to the norm of most corporate criminals I think these two are going to have the book thrown at them, America needs to make an example. Saying that however, jail is just too good for these guys. I hope they both share a cell with Bubba and learn the new meaning of "playing house".

A few points of interest:
  • 20,000 people lost their jobs and medical insurance
  • Average severance pay: $4,500
  • Top executives were paid bonuses totaling $55 million
  • Employees lost $1.2 billion in retirement funds
  • Retirees lost $2 billion in pension funds
  • Enron execs cashed in $116 million in stock
  • 15 Guilty Please, 6 Cconvictions, 1 Acquittal, 11 Pending Cases
  • Three California Traders pled guilty to wire fraud
  • Four Merrill Lynch execs convicted of fraud in the Nigerian Barge Case

Way too much info to cover - go see the movie.


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At 2:47 PM, Anonymous The man said...

god damn it anyways. I hope they all rot in prison

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At 4:15 PM, Anonymous Anonymous said...

whats with these other people saying to read their blogs haha. Whose the park ranger guy.
Anyways - the usual poitns to be made.
James = idiot
burn me a copy already

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