Custom essays on The Enron Company

The name of the Enron Company is often associated with the notion of fraud. The fact that for several years it was one of the richest companies of the USA, a “promising new American industry” (Dennis J. Buckley) in the electric generation sector also made its contribution to the scandal. Actually the company deserved much of its blame for the collapse of the merchant energy sector. Today the company still exists and even tries to confirm that it is on the up and up. The representatives of Enron describe that the company holds a portfolio of assets (including Florida Gas Transmission, Transwestern pipeline, Portland General Electric, Northern Border Partners, L. P.). But actually now the company is far from being that strong as it was ten years ago. The numerous websites are filled with desperate messages of those people who hold almost valueless stock of the Enron Company. The office of the company moved from the respectable and prosperous Houston high-rise and settled in an office that is situated near the former baseball field of the Enron Company. Besides the company symbol of prosperity (the crooked E) was sold long time ago. It seems that nothing from the former greatness and glitter of success is left.
Besides not only the fate of the company is sad, but the fate of the Enron’s management is also not very good. Andy Fastow was pleaded guilty for conspiracy. His sentence is ten years of imprisonment with the following three years of the supervised release. In addition, Andy Fastow agreed to collaborate with the government of the country and give evidence that will help in criminal investigation of the reasons and the attending circumstances of the collapse of the Enron Company. He claimed himself guilty in manipulating with financial operations the company had, besides he misreported the financial results of various operations that were under his supervision.

He admitted that he took the opportunity to enrich himself and the company with the help of some shareholders who were not very competent in financial questions, processes and operations. That happened during the Southampton transaction (it involved $30 million). Not only had this man contributed to the Enron Company’s fame as a fraud. The elaborate schemes of many members of the Enron’s management caused the huge losses in shareholder value. And that particularly led to the company’s bankruptcy.
The Enron Company showed the whole world the example that should be taken as a lesson to make conclusions of (Bednall T.): a careful review is really needed to be done on the structure and wording of relevant D&O cover. The Enron’s mistake was that there were a lot of uncertainties about the availability of the insurance of D&O and indemnity arrangements that were made for the directors of the company.

 
Works cited:
Stephen J. Weiss. Lessons of Enron: what the Enron bankruptcy means for your D&O insurance coverage