Word: enronization
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...Buell, an early member of the Enron Task Force, remembers how difficult it was to assemble a case back in January 2002--a month after the company's bankruptcy and with the suicide of Enron's vice chairman Cliff Baxter seared into everyone's conscience. "Enron was the 9/11 of the financial markets," says Buell, now a visiting law professor at the University of Texas, "but nobody wanted to be a witness." Slowly, the task force's prosecutors turned the screws on the bad guys. But it was early 2004 before they had enough "serious momentum" to indict Skilling...
...Enron joins WorldCom, Adelphia and Tyco among the big companies busted by President Bush's Corporate Fraud Task Force, which has won 1,063 convictions, including guilty verdicts against 36 chief financial officers and 167 corporate CEOs and presidents. "Behavior has clearly changed since the Enron crisis," says Roman Weil, a professor of accounting at the University of Chicago. Part of that is a result of the Sarbanes-Oxley bill, which holds bosses criminally responsible if their company's accounting is faulty. So CEOs are paying closer attention to financial statements--and passing that responsibility down the line. "The criminalization...
...Enron's greatest failure may have been asserting that it could offset major risks by buying assets like utilities and then developing and trading complex financial instruments around them. The company's energy-trading imitators paid a dear price: the Williams Co., based in Oklahoma, and Dynegy, based in Texas, saw their stock prices drop from the $45 range to less than $1 before rebounding slightly...
...more than $100 billion at work in the energy sector, says tracker Peter Fusaro, head of Energy and Environmental Capital Management. "We're in the middle of the vortex," he says, pointing to hot economies in Houston and Calgary, Canada. "The bigger issue is--get to know your risks. Enron was the dumbest energy company in the world...
Attorneys for Skilling and Lay plan to appeal, possibly using the argument that got Enron accountant Arthur Andersen off the hook--the fine points of jury instructions. Like most appeals, that's a long shot. Sentencing for Lay and Skilling is set for September, but with the trial over, 16 other Enron employees who turned state's witness can also be sentenced...