Case Study: Conceptualizing The Enron Scandal

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Conceptualizing the Enron scandal The financial scandal at Enron has become a case study of how unethical acts might lead to closure of a company. The crime committed by the top management of Enron has been explained by Edwin Sutherland in what is referred to as the theory of white collar crime. This theory refers to “a crime committed by a person of respectability and high social status in the course of his occupation" (Harrison & Wicks, 2013, p. 67). Besides, the Santa Clara University has used the case as part of learning material to help students grasp the effects of real life financial scandal (Harrison & Wicks, 2013). The financial scandal at Enron resulted in loss of more than 474 billion and is the worst scandal in the history of the US financial malpractices. As a result of the scandal, shareholders, employees, and other stakeholders loss their investments, jobs, and other interests as the company’s share value plunged by more than a half within a month. As indicated in the Santa Clara University, the market failure from the scandal was estimated to be over $100 billion (Harrison & Wicks, 2013).
Crimes committed The top management of Enron committed several financial related crimes. They can be categorized into four these are, conspiracy, securities fraud, false statement, insider trading and fraud. Despite the fact that those involved in the scandal were competent, they failed to effectively practice professional due care and trust bestowed upon
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