1、,Born April 15, 1942 Tyrone, Missouri, USA Died July 5, 2006 Conviction(s) fraud, false statement Penalty died before sentencing, conviction vacated Status died of a heart attack before his sentencing Occupation businessman,Born November 25, 1953 Conviction(s) conspiracy, securities fraud, false sta
2、tement, insider trading Penalty imprisoned 24 years and 4 months, fined $45 million Status in prison Occupation prisoner/Failed Businessman SpouseRebecca Carter,On October 31, 2002, Fastow was indicted by a federal grand jury in Houston, Texas on 78 counts including fraud, money laundering, and cons
3、piracy. On January 14, 2004, he pled guilty to two counts of wire and securities fraud, and agreed to serve a ten-year prison sentence. He also agreed to become an informant and cooperate with federal authorities in the prosecutions of other former Enron executives in order to receive a reduced sent
4、ence. As of November 2006, Fastow is Inmate #14343-179 at the Federal Detention Center (FDC) in Oakdale, Louisiana, with a projected release date of December 17, 2011,Ben Glisan Jr., a former Enron treasurer, was the first man to be sent to prison in the Enron scandal. He pleaded guilty to one count
5、 of conspiracy to commit security and wire fraud.,John Forney, a former energy trader who invented various strategies such as the “Death Star,“ was indicted in December 2002, on 11 counts of conspiracy and wire fraud. His trial was scheduled for October 12, 2004.,Timothy Belden and Jeffrey Richter,
6、have both pled guilty to conspiring to commit wire fraud and currently are aiding prosecutors in investigating this scandal.,All told, sixteen people pleaded guilty for crimes committed at the company, and five others, including four former Merrill Lynch employees, were found guilty at trial. Eight
7、former Enron executives testified, the star witness being Fastow, against Lay and Skilling, his former bosses. Another was Kenneth Rice, the former chief of Enron Corp.s high-speed Internet unit, who cooperated and whose testimony helped convict Skilling and Lay. In June 2007, he received a 27 month
8、 sentence,Lou Lung Pai (born Nanjing, China 1946) is a Chinese-American businessman and former Enron executive. He was CEO of Enron Energy Services and Enron Xcelerator, a venture capital division of Enron. He left Enron with over $280 million. Pai became the second largest land owner in Colorado wh
9、en he purchased the 77,500 acre Taylor Ranch, though he later sold the property in 2005. He has not been charged with any criminal wrongdoing in the Enron scandal and has exercised his 5th Amendment right in regard to the subsequent Enron class action lawsuit.,On June 15, 2002, Andersen was convicte
10、d of obstruction of justice for shredding documents related to its audit of Enron, resulting in the Enron scandal. Nancy Temple (Andersen Legal Dept.) and David Duncan (Lead Partner for the Enron account) were cited as the responsible managers in this scandal as they had given the order to shred rel
11、evant documents. Since the U.S. Securities and Exchange Commission does not allow convicted felons to audit public companies, the firm agreed to surrender its licenses and its right to practice before the SEC on August 31, 2002. This effectively ended the companys operations.,1996 CFO Andrew Fastow
12、begins committing crimes by creating off-book entities for personal enrichment. 1 1997 Andrew Fastow creates Chewco in an effort to hide debt and inflate profits but Chewco doesnt meet requirements to keep it off Enrons balance sheet. 1998 Enron enters into several capital intensive ventures that tu
13、rn into financial disasters including a water distribution scheme and power plants in Brazil. 1999 Enron board of directors waive conflict of interest rules in order to allow Andrew Fastow to run private companies that do business with Enron. He creates LJM that buys poorly performing Enron assets.
14、In reality, LJM is used to hide debt and inflate profits for Enron in order to prop up its stock price. It is believed that this is the beginning of the complex and questionable accounting practices that lead to Enrons demise,2000 March Enron CEO Kenneth Lay allegedly files fraudulent annual 10-K fo
15、r 1999 March 13 Jeffrey Skilling allegedly signs fraudulent letters to Arthur Andersen LLP about 1999 financial data. August Enron CEO Kenneth Lay allegedly files fraudulent quarterly 10-Q for second quarter 2000 November 1 Enron CEO Kenneth Lay allegedly begins selling Enron shares. November Enron
16、CEO Kenneth Lay allegedly files fraudulent quarterly 10-Q for third quarter 2000,2001 (the year the stuff hit the fan),January 8 California governor Gray Davis calls Enron and other energy companies “out-of-state profiteers“ during the 2000 California energy crisis. January 20 The inauguration of Ge
17、orge W. Bush is attended by Enron CEO Kenneth Lay and president Jeffrey Skilling, who each make $100,000 contributions for the event. January 22 Jeffrey Skilling commits securities fraud by omitting bad news and lying to investors. January 25 Jeffrey Skilling makes false presentation to investors. F
18、ebruary 5 Enron executives get bonus checks for millions of dollars. Arthur Andersen auditors internally question the LJM partnerships. February 6 Enron is named “most innovative company in America“ for the sixth consecutive year by Fortune Magazine. February 12 Skilling is named CEO. Arthur Anderse
19、n tells the Enron board of directors audit committee that they have no concerns. February 22 Lay and other Enron officials go to the White House to meet with the Dick Cheney energy task force.,March 5 Fortune Magazine publishes article, “Is ENRON Overpriced?“ written by Bethany McLean. March 7 Lay a
20、nd other Enron officials meet with the energy task force of Vice President Dick Cheney. March 8 Enron lawyer Jordan Mintz sends a memorandum questioning the LJM partnerships to Enron chief risk officer Richard Buy and chief accounting officer Richard Causey. March 26 To cover problems in the Raptor
21、partnerships, Enron repurchases Chewcos investment in JEDI for $35 million, netting Enron executive Michael Kopper over $10 million. April 17 Enron announces a first quarter profit of $536 million. Lay and other Enron officials meet with Vice President Dick Cheney. May 5 Enrons stock price closes be
22、low $59.78, a critical point for one of the partnerships. May 17 The energy task force issues its report, which endorses some of Enrons proposals. May 18 Chief executive of Enron Xcelerator Lou Pai sells 1.1 million Enron shares over the next 21 days. May 22 Jordan Mintz sends a memorandum to Jeffre
23、y Skilling for his sign-off on LJM paperwork,June 6 Enron general counsel Jim Derrick sells 160,000 Enron shares over the next ten days. June 12 Skilling jokes about the California electricity crisis at a Las Vegas conference. June 21 Skilling is hit in the face with a pie during a visit to Californ
24、ia. July 13 Chief executive of Enron Broadband Services Ken Rice sells 386,000 Enron shares. July 23 Enrons stock price closes below $47, a critical point for the Raptor partnerships. July 27 Director Robert Belfer sells 100,000 Enron shares. August 7 Officials from a German Enron subsidiary meet wi
25、th the Dick Cheney energy task force. August 14 Citing “personal reasons,“ Skilling resigns as CEO. Lay replaces him, stating “Absolutely no accounting issue, no trading issue, no reserve issue, no previously unknown problem issues“ are involved. August 15 Sherron Watkins, a vice president for corpo
26、rate development, puts a one-page letter in Lays suggestion box, questioning Enrons accounting practices.,August 16 Lay discusses Skillings departure with employees. August 20 Watkins phones a former co-worker at Arthur Andersen about her worries. Lay exercises 25,000 share options at $20.78 ($519,0
27、00 total value); the stock closes at $36.25. One of Lays lawyers states later that some of the stock was used to repay an Enron line of credit. August 21 Lay emails employees, stating “one of my highest priorities is to restore investor confidence in Enron. This should result in a significantly high
28、er stock price.“ He exercises 68,620 share options at $21.56 ($1,479,477 total value); the stock closes at $36.88. One of Lays lawyers states later that Lay never sold the shares, which are now practically worthless. David B. Duncan, the lead partner on the Enron account for Arthur Andersen, meets w
29、ith three other AA officials to discuss the Watkins call. A memo states they “agreed to consult our firms legal adviser about what actions to take.“ August 22 Watkins meets with Lay, giving him a seven-page letter stating that Enron may be an “elaborate accounting hoax,“ and advises him not to invol
30、ve Vinson & Elkins, Enrons law firm, because of potential conflicts of interest. V&E is asked if an inquiry is necessary, but told not to bother “second-guessing the accounting advice and treatment.“,September 17 Jeffrey Skilling sells 500,000 Enron shares. September 21 Director Robert Belfer sells
31、109,000 Enron shares. September 26 Lay tells employees that Enrons accounting practices are “legal and totally appropriate,“ that Enron stock is “an incredible bargain,“ that he and other executives have bought Enron stock in the last two months, and that “the third quarter is looking great“ in an o
32、nline forum. October 9 Arthur Andersen hires the Davis Polk & Wardwell law firm to prepare a defense for the company. October 10 Enron officials discuss energy policy with staff of Vice President Dick Cheney. October 12 An Arthur Andersen lawyer in Chicago, Nancy Temple, emails an Andersen partner i
33、n Houston, Texas, Michael Odom, reminding him of the Andersen document retention and destruction policy. He forwards the email to a co-worker. October 15 Vinson & Elkins deliver a report which states that Arthur Andersen approved of Enrons accounting procedures, and that Enron did nothing wrong.,Oct
34、ober 16 Enron announces a third quarter loss of $618 million. October 17 To correct an accounting error on the Raptor partnerships devised by CFO Andrew Fastow, Enrons assets (shareholder equity) are reduced by $1.01 billion. The Enron 401(k) retirement plan is frozen for administrative changes. Oct
35、ober 22 Enron announces that the U.S. Securities and Exchange Commission (SEC) has begun an inquiry into Enrons accounting practices with its partnerships. The Arthur Andersen partner in charge of the Enron account, David B. Duncan tells the audit managers to comply with the Andersen document retent
36、ion policy, and observes them doing so by shredding documents. October 23 Lay reassures investors in a conference call, asserting there was no conflict of interest with the Raptor partnerships and that the directors on the board “continue to have the highest faith and confidence“ in Fastow. David B.
37、 Duncan organizes a meeting of the Enron account group to speed up the document destruction, according to testimony by Arthur Andersen managing director Dorsey Lee Baskin Jr,October 24 Andrew Fastow is forced to leave Enron. October 25 Enron sends an email to all employees and to Arthur Andersen sta
38、ting that all pertinent documents should be preserved. October 26 Lay makes phone call to Alan Greenspan, chairman of the Federal Reserve, about Enron. Lay meets with Dynegy chairman Chuck Watson. October 28 Lay talks to Paul H. ONeill, Secretary of the Treasury. ONeill tells Peter Fisher, Treasury
39、Under-secretary to look into Enron. Fisher talks with Enron president Greg Whalley repeatedly over the next few days. Whalley, according to Fisher, implies that he would like Fisher to ask Enrons creditors to extend its credit. Fisher doesnt. October 29 Lay asks Donald L. Evans, Secretary of Commerc
40、e, for help with an upcoming credit rating review by Moodys Investors Service. Evans does nothing, and Moodys downgrades Enrons rating. October 31 Enron announces that the SEC inquiry is now a formal investigation.,November 8 Enron announces it overstated profits by $586 million over five years. Lay
41、 calls ONeill again, comparing Enron to Long-Term Capital Management. The SEC subpoenas Arthur Andersen officials. November 9 Dynegy announces it will acquire Enron for $9 billion. Nancy Temple leaves a voice message for David B. Duncan ordering the preservation of all Enron documents. His assistant
42、 sends an email to other assistants to “stop the shredding“. November 19 Enron announces the payment of a $690 million note is nearly due as a result of the descent of its credit rating. November 28 Dynegy retracts its acquisition offer. November 29 The SEC begins investigating Arthur Andersen. December 2 Enron files for bankruptcy. December 3 Enron lays off 4,000 in Houston. December 12 In testimony before Congress, Arthur Andersen CEO Joseph Berardino states that Enron might have violated securities laws.,Lessons Learned?,
