Enron: The Smartest Guys In The Room
The documentary Enron: The Smartest Guys in the room is a film that is based on a book written by two reporters Bethany Mclean and Peter Elkind who reported on the largest business scandal in America. Because of this scandal many employers were fined and went to prison for different accounts of fraud. The scandal was the company Enron using accounting loop holes to show a forecast on profits for the upcoming year and was recorded in the books for traders to sell in the stock market. The problem was that if the profits were less than what was forecasted the number that was predicted would be the one that will be used in the books. For example the company Enron decided to do business in India, and spent billions of dollars building a factory. …show more content…
When the board came together to decide on what to do with the two criminals, the CEO Jeffery Skilling decided not to do anything because they made the company so much money. Skilling took a risk doing this, and it ended up having both traders gambling all of Enron’s reserves, which if the company did not fluff their books the company had the possibility of failing. This is when the market-to-market accounting came into place to save the company by forecasting what Enron would make for the year and have traders sell that for …show more content…
(Enron scandal. (n.d.).) Andrew Fastow and his wife were charged with securities fraud, wire fraud, mail fraud, money laundering and conspiracy. Fastow was sentenced to ten years with no parole, and his wife was sentenced for one year for assisting her husband. (Enron Fast Facts. (2016, April 17).) Kenneth Lay was convicted for forty-five years for securities and wire fraud but died July 5th, 2006. (Enron scandal. (n.d.).) Another person who was guilty was John Clifford Baxter who was a trader for Enron, but sadly committed suicide because he felt terrible for his
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