Enron was a multinational company that specialized in marketing electricity, natural gas, energy, and other physical commodities. Enron initiated the wholesale natural gas and electricity markets in the United Stases. It was officially formed in 1985 as a result of the merger of Houston Natural Gas and Inter north of Omaha, Nebraska. In 2000, Enron reported revenues of $101 billion, supposedly making it the seventh largest U.S. company in terms of revenue. In 2000, Enron employed 21, 000 employed 21, 000 employees and operated in over 40 countries.
In October 2001, it was determined that a large financial statement fraud had been occurring at Enron and that revenues, income, and assets had been significantly overstated. Its stock price which reached a high $90 earlier in the year, dropped to less then $1 in a matter of days. In December 2001, Enron declared of one the largest corporate bankruptcies in U.S history. Once the scandal was discovered numerous Enron officers. Both Jeff Skilling and Kenneth Lay (former CEO and current CEO) were charged with numerous incidences of fraud. Before his trial, Kenneth Lay died of heart disease and Jeff Skilling was found guilty and sentenced to 24 years in prison. Arthur Andersen, Enron`s auditor was convicted of obstruction of justice largely because of destruction of evidence charges brought against it by the U.S. government. Enron citing accounting errors, had to restate its financial statements cutting profits for the three years 1999-2001 by autos 20 percent or around $586 million. Many of the lawsuits that were filed against Enron and partied alleged that executives reaped personal gains from “of-the-book“ partnerships while the energy giant violated basic rules of accounting and ethics. As the accounting discrepancies became public knowledge, Enron investors lost billions of dollars, shattering their retirement plans. The Enron and WorldCom frauds were there main impetus for the passing of the Sarbanes-Oxley Corporate Governance Act in 2002 and are, without doubt the two must well know frauds in the history of The United Stases.