Ok Ok, if you don’t know about this then you need to. Watch this unbelievable documentary called “The Smartest Guys In The Room” about the Enron Scandal from 2001.
Enron was an American company based in Houston, Texas, founded by Kenneth Lay, and traded in energy. The company performed all manner of dubious activities, and artificially drove up the price of energy, capped the retail price for electricity and even caused region wide blackouts, dubbed the Californian Electricity Crisis.
The company performed large scale accounting fraud, hiding billions of USDs of debt, with Arthur Anderson and thus provided vastly inflated share prices at the time. The scandal was revealed in October and as you can see from the graph the share price plummeted (even though it had been decreasing for a while).
All this criminal activity eventually led to the largest bankruptcy reorganisation in history (a USD40 billion claim from shareholders) of the whole Enron Corporation alongside the dissolution of Arthur Anderson which was the largest audit failure ever. Just a side note, this was the largest bankruptcy in history until that of WorldCom the next year.
This documentary will illustrate all the key points, and is certainly worth a watch if you have about 1.5 hours (109 minutes to be exact). So go get a cuppa and sit back to learn about one the largest corporate frauds in human history.
The Smartest Guys in the Room (well not that smart…) – this is only the trailer as the whole video has been removed from Youtube 😦 But i strongly advise you to do some digging so you can watch.