Enron

About Enron

Enron filed for bankruptcy on December 2, 2001, with 63.4 billion in assets, then the largest bankruptcy in US history. Enron used special purpose entities to hide debt and inflate profits. CEO Jeffrey Skilling resigned abruptly in August 2001. Whistleblower Sherron Watkins warned CEO Ken Lay of accounting irregularities. The SEC investigation revealed massive fraud. Arthur Andersen, one of the Big Five accounting firms, was destroyed for its role in auditing Enron. Ken Lay died before sentencing. Skilling was sentenced to 24 years, later reduced to 14. The Sarbanes-Oxley Act of 2002 was passed in response. Enron shareholders lost approximately 74 billion in the four years before bankruptcy. Employees lost 2 billion in pension value.