Famous case of Enron company.

INDEPTH: ENRON
From collapse to convictions: a timeline
 The World
famous logo
among the
best 10
corporate
company’s
in the world
at that time.
 Structure of company……..

 1985: Enron began in 1985, it

started operations as an interstate
pipeline company. Enron is formed
by the merging of Houston Natural
Gas and Omaha-based InterNorth
 Enron’s CEO

Former Enron CEO Enron founder Ken Lay

Jeff Skilling
 Expansion of company…….
 1988: Enron opens offices in the U.K.
after the country's privatizes its
power industry.
1989: Enron opens its Gas Bank,
where consumers can buy long-
term supplies of natural gas at a
fixed price, even as the real
price fluctuates.
 1990-1998: Enron expands
its holdings in the U.K.,
Europe, South America and
India. It moves away from natural
gas and pipeline operations to
marketing in other energy-related
commodities
 Enron entered into world market..

 1999: Enron launches its broadband

services unit and Enron Online, the
company's website for trading
commodities, which soon becomes
the largest business site in the world.
About 90 per cent of its income
would eventually come from trades
over Enron Online.
 Best achievement of company…
…..
 August 2000: Enron's shares hit an
all-time high of more than $90 US.
Annual revenues reach $100 billion
US. It is ranked the sixth-largest
energy company in the world.
Ups &Downs Of company……..
 October 2001: Enron reports its first
quarterly loss in four years, $618 million
US, and a reduction in shareholder equity
of over $1 billion. CFO Andrew Fastow is
replaced. The Securities and Exchange
Commission begins an investigation
related to investment partnerships led by
Fastow. Their investigation would later
show that the complex web of
partnerships was designed to hide Enron's
debt.
 Enron shares plunge; Dynegy
abandons takeover
 November 2001: Enron announces
it had overstated its earnings back to
1997 by about $600 million. Its
shares plunge to "junk" status by the
end of the month. The SEC adds
accountancy firm Arthur Andersen,
the auditor for Enron, to its
investigation.
 Enron files for Chapter 11; lawsuits loom

 Dec. 2, 2001: Enron files for

bankruptcy protection, the largest
bankruptcy in U.S. history at the
time. (The dubious title would later
go to WorldCom in July 2002.)
Thousands of workers would be laid
off.
 Lay’s Decisions……….
 January 2002: The U.S. Justice
Department begins its investigation
of Enron. Lay resigns as chairman
and chief executive.
Enron documents destroyed: auditor
 Jan. 10, 2002: Arthur Andersen says
its employees destroyed a
"significant but undetermined"
number of Enron documents.
Fired auditor refuses to answer Enron questions

 Jan. 24, 2002: David Duncan, a

former Arthur Andersen auditor who
handled the Enron bankruptcy,
invokes his Fifth Amendment right
not to incriminate himself and
refuses to testify before Congress.
 Former Enron executive found dead

 Jan. 25, 2002: John Clifford Baxter,

former Enron vice-president, is found
dead in his car. He was shot once in
the head, and authorities treat his
death as a suicide. Baxter resigned
as vice-president in May 2001.
 Lay resigns from Enron board ahead of subpoena &
U.S. Senators subpoena Enron's Lay poena

 Feb. 4, 2002: Ken Lay resigns from

Enron's board of directors.

Feb. 5, 2002: The U.S. Senate

Commerce Committee subpoenas former
Enron CEO Ken Lay.
Former Enron CEO says was 'not aware' of finan

 Feb. 7, 2002: Former Enron CEO

Jeffrey Skilling denies any knowledge
of financial or accounting
irregularities. At the same hearing
before Congress, four Enron
executives, including former CFO
Andrew Fastow, invoke their Fifth
Amendment right against self-
incrimination and decline to testify.
 Enron's Lay refuses to testify

 Feb. 12, 2002: Former CEO Lay

declines to testify before Congress,
citing his Fifth Amendment right
against self-incrimination.
Arthur Andersen charged with obstruction in Enr

 March 14, 2002: Arthur Andersen is

charged with obstruction of justice
for destroying paper and computer
documents related to Enron as the
SEC investigation started.
 Michael Kopper
becomes first ex-Enron exec to plead guilty

 Aug. 21, 2002: Former Enron

executive Michael Kopper pleads
guilty to money laundering
conspiracy and conspiracy to commit
wire fraud. He becomes the first
former Enron executive to plead
guilty to criminal charges. Kopper
agrees to co-operate with federal
investigators.
Former Enron CFO charged with fraud, money l

 Oct. 2, 2002: Former Enron CFO

Andrew Fastow is arrested on
charges of fraud and money
laundering. He would eventually face
98 charges.
Arthur Andersen fined, given probation over Enr

 Oct. 16, 2002: Accountancy firm Arthur

Andersen is given the maximum sentence for
obstruction of justice after shredding Enron
documents: five years' probation and a $500,000
fine.

May 1, 2003: Lea Fastow, Enron's former

assistant treasurer and wife of former CFO
Andrew Fastow, is charged with conspiracy and
filing false tax forms for her role in some of her
husband's deals to hide Enron's debt.
 Enron unveils restructuring plan

 July 11, 2003: Enron unveils a

bankruptcy restructuring plan that
would see most of Enron's 20,000
creditors receive about 20 per cent
of the $63 billion US they are owed.
 First Enron executive goes to prison

 Sept. 10, 2003: Ben Glisan, a

former Enron treasurer, pleads guilty
to a charge of conspiracy. He is
sentenced to five years in prison,
making him the first former Enron
executive to go to jail.
 Andrew Fastow
agrees to plea deal; will cooperate in Enron cas

 Jan. 14, 2004: Former Enron CFO Andrew

Fastow agrees to a plea agreement and a
10-year prison sentence. He pleads guilty
to one count of conspiracy to commit wire
fraud and one count of conspiracy to
commit securities fraud. He also agrees to
co-operate with federal prosecutors. His
wife, Lea Fastow, also pleads guilty, but
would later withdraw the plea.
Former Enron chief faces 40 federal charges

 Feb. 19, 2004: Former Enron CEO

Jeffrey Skilling pleads not guilty to 40
federal charges, from insider trading
to making false statements to
auditors. He posts a $5-million bond.
 Lea Fastow
pleads guilty to tax charge, gets 12-month sente

 May 6, 2004: Lea Fastow, Enron's

former assistant treasurer and wife
of former CFO Andrew Fastow,
agrees to a plea agreement and a
one-year prison term. She pleads
guilty to filing false tax forms.
Enron's Kenneth Lay pleads not guilty on 11 cou

 July 7, 2004: Former Enron founder and

CEO Kenneth Lay turns himself in to the
Houston office of the Federal Bureau of
Investigation. He is led in handcuffs to a
courthouse, where he is charged with 11
criminal charges, including securities and
wire fraud, and making false statements.
He pleads not guilty to all of them. The
U.S. Securities and Exchange Commission
also files civil charges of insider trading
against Lay.
Enron approved to emerge from bankruptcy prot
pro

 July 15, 2004: A New York judge

gives his approval for Enron's plan to
emerge from bankruptcy protection,
which will see the company pay $12
billion US of the $63 billion US it
owes to about 20,000 creditors.
Arthur Andersen's Enron conviction overturned

 May 31, 2005:The U.S. Supreme Court

unanimously overturns the 2002
conviction of Arthur Andersen for
destroying documents in the Enron case.
The decision says instructions to the jury
were too broad.
July 15, 2005:Enron agrees to a $1.5
billion US settlement to end claims that it
manipulated the electricity market during
the California energy crisis of 2000 and
2001.
Enron settles California price-gouging claim

 July 15, 2005: Enron agrees to a

$1.5-billion US settlement to end
claims that it manipulated.
Enron exec pleads guilty to securities fraud

 Dec. 28, 2005: Richard Causey,

former chief accountant at Enron
Corp., pleads guilty to a single count
of securities fraud as part of a deal
with prosecutors. Causey originally
pleaded not guilty to 34 counts in
early 2004. The other charges were
dropped, and Causey will be
sentenced to seven years in prison.
Jury selection underway for trial of former Enron

 Jan. 30, 2006: Jury selection in the

trial of Enron Corp. founder Ken Lay
and former CEO Jeffrey Skilling
begins in Houston. The trial is
expected to last about four months.
Prosecution rests in Enron trial as some charges

 March 28, 2006: The prosecution rests in

the trial of Enron Corp. founder Ken Lay
and former chief executive officer Jeffrey
Skilling. Three charges against Skilling and
one charge against Lay are dropped after
the prosecution doesn't present evidence
to support them. Skilling still faces 28
counts of conspiracy, fraud and insider
trading. Lay faces six counts of conspiracy
and fraud.
'Absolutely innocent,' ex-CEO tells Enron trial

 April 10, 2006: Former Enron chief

executive Jeffrey Skilling testifies in
his own defence on 28 charges
relating to the company's
bankruptcy, telling a Houston court
that he is "absolutely innocent" and
he would "fight these charges until
the day I die.
Enron's Lay found guilty on all counts, Skilling on
o

 May 25, 2006: In the sixth day of deliberations, a jury

finds Enron founder Kenneth Lay guilty of all six counts
against him, including conspiracy to commit securities and
wire fraud. As well, former Enron chief executive Jeffrey
Skilling is convicted of one count of conspiracy, 17 counts
of fraud and making false statements and one count of
insider trading.
Lay and Skilling had blamed the collapse of what was once
the seventh-largest company in the United States on bad
publicity and lost market confidence. Prosecutors had a
different theory: they accused the two men of repeatedly
lying to investors and employees about Enron's financial
health and of running an elaborate fraud that gave the
company the illusion of success as it was hurtling toward
bankruptcy.
Both men face lengthy prison sentences – but are expected
to appeal. A total of 19 former Enron executives have either
pleaded guilty or been convicted for their part in the
company's failure.
Disgraced Enron founder Lay dead

 July 5, 2006: Ken Lay, 64, dies of a

heart attack at a family home in
Aspen, Colo.
 Ex-Enron executive Fastow
gets 6-year sentence

 Sept. 26, 2006: Andrew Fastow,

Enron's former chief financial officer,
is sentenced to six years in prison.
He could have been given up to 10
years, but the judge notes his guilty
plea and his co-operation with
authorities, saying "These factors call
for mercy."
Judge vacates criminal convictions of Enron's Ke
K

 Oct. 17, 2006: A U.S. judge throws

out the criminal convictions of
Kenneth Lay because he died before
he could appeal his case.
 Enron's Skilling jailed for years

 Oct. 23, 2006:Former Enron chief

executive officer Jeffrey Skilling is
sentenced to 24 years, four months
in jail for his role in the collapse.