Known as the greatest fraud in American history, the Enron scandal has been the subject of many books and documentaries. According to Enron: The Rise and Fall by Loren Fox, the name Enron became synonymous with fraudulent accounting practices and "everything that's wrong with corporate America." Although hard to understand how a $100 billion energy, commodities and services company with 22,000 employees could collapse during a period of weeks, when Enron plunged into bankruptcy it also ruined the reputation of Arthur Anderson, one of the country's top five accounting firms, causing its dissolution.

Beginning in 1985, Enron expanded from a large, natural-gas pipeline firm into an energy-trading company that purchased and sold electricity, as well as gas. Enron's extensive network of pipelines sprawled across the country, from the Atlantic to the Pacific and from Canada to Mexico. By the late 1990s, Enron was also dealing in financial contracts, broadband, metals, paper and other commodities, as well as occupying the position of the largest trader in natural gas in America. Although Enron management was very knowledgeable regarding energy projects, the expansion into other areas resulted in many poor decisions, leading to the company's desperate use of "creative accounting" to cause the company to appear in better condition than it actually was.

At the time that Enron declared bankruptcy, it owned or operated 38 electric power plants throughout the globe, including in Argentina, Brazil, China, Guam, Guatemala, India, Italy, Nicaragua, Panama, Poland, Puerto Rico, the Dominican Republic, the Philippines, the United Kingdom, Turkey and the United States (in California, Iowa, Minnesota, Montana, Oregon, Pennsylvania, Texas and Wisconsin). In addition, it owned natural gas businesses operating in Brazil, Jamaica, Puerto Rico, South Korea and Venezuela.

Six months after the merging of the Northern Natural Gas Company, a subsidiary of IntraNorth, with Houston Natural Gas, Kenneth Lay, chief executive officer of Houston Natural Gas, became CEO of the merged firm, which he named Enron. In 1988, the company chose to pursue unregulated markets, and in 1990, Jeffrey Skilling joined Enron to lead the company's trading and finance operations. Named as "America's Most Innovative Company" by Fortune six years in a row, as well as one of the "100 Best Companies to Work for in America," Enron succeeded in keeping its stock artificially high through inflating its profits and concealing its losses.

Some profits were revealed as being due to deals with special purpose entities (SPEs) in order for Enron to avoid reporting its losses in its financial statements. Enron created thousands of offshore entities to avoid paying taxes, increasing the company's profitability and the ability to hide losses. Each quarter, the corporate officers had to engage in more complicated financial deceptions in order to make it appear as if the firm were raking in billions of dollars in profits while it was actually losing money. During August 2000, Enron's stock reached its peak price of $90, and Enron executives starting selling off their stock while encouraging investors and the general public to buy Enron stock. By October, the stock had dropped to $15, but Lay kept encouraging investors that the stock price would soon rebound. When Enron's millions of dollars in losses became public knowledge, the stock price fell to less than a dollar per share, and many people lost their life savings.

In May 2006, Kenneth Lay was found guilty of 10 counts of securities fraud, but he died of a heart attack before he could be sentenced to jail. Jeffrey Skilling, the president and chief operating officer of Enron, was sentenced to 24 years in prison and a fine of $45 million. Andrew Fastow, the chief financial officer of Enron, was sentenced to six years in jail and two years probation. Lou Pai, the chief executive officer of Enron Energy Services, sold off between $250 and $300 million worth of his Enron stock just before the company collapsed and refused to admit or deny claims that he sold millions of dollars of Enron stock because of non-public financial company information. J. Clifford Baxter, the chief executive officer of Enron North America, committed suicide in 2002.

After one of the most complicated bankruptcy cases in American history, Enron was reorganized in 2007 into the Enron Creditors Recovery Corp., whose purpose was to reorganize and liquidate Enron's assets and operations to pay off its creditors.

Enron: Selected full-text books and articles

Risk and Ruin: Enron and the Culture of American Capitalism By Gavin Benke University of Pennsylvania Press, 2018
Enron: The Rise and Fall By Loren Fox John Wiley & Sons, 2003
The Rise and Fall of Enron; When a Company Looks Too Good to Be True, It Usually Is By Thomas, C. William Journal of Accountancy, Vol. 193, No. 4, April 2002
Pump and Dump: The Rancid Rules of the New Economy By Robert H. Tillman; Michael L. Indergaard Rutgers University Press, 2005
Ethics and Corporate Social Responsibility: Why Giants Fall By Ronald R. Sims Praeger, 2003
Librarian's tip: Chap. 7 "Enron: How a Failure of Leadership, Culture, and Unethical Behavior Brought a Giant to Its Knees"
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