Enron

Enron was one of largest the Entreprise S American by its stock exchange Capitalisation . In addition to its own activities in the Natural gas, this company texane had assembled a system of broking by which it bought and resold electricity, in particular with the network of the distributers of current of the State of California. In December 2001, it went bankrupt because of the losses caused by its speculative operations on the market of electricity; they had been masked in benefit via countable handling. This bankruptcy involved in its wake that of Arthur Andersen, which auditait the accounts of Enron.

History

Beginnings

Born in 1985, of the fusion of Houston Natural Gas and Internorth off Omaha, Enron was one of the more world large companies. It was according to the accounts, with the head of a Turnover of 139 billion dollars. When the company started its activities, it was with the head of a network of Gazoduc S completely sizeable. But, at the beginning of the Years 1990, it undertook a diversification in the markets derived from energy, under the benevolence of the senator Texan Phil Gramm - his wife was president de Commodity Futures Trading Commission (Commission of the Transferable securities, CFTC) -. In same time, a vast campaign of communication was launched to persuade the consumers, for example, that a Dérégulation of the market (cf Déréglementation) would make fall their invoice from 43%.

Frauds and handling

In-house, the leaders created more than 3.000 companies offshore oil rigs. While making pass these companies for their suppliers, they could control the prices of energy. These companies, whose head offices were installed in the Cayman Islands, the Bermuda or the Bahamas were used to dissimulate the fraudulent assets and them (important) debts of the head office - information on these subsidiary companies being only indicated in small the appendices at the foot of the page of the documents of financial information, thus allowing to mislead the shareholders, the employees and the authorities. The company continued simultaneously its policy of aggressive communication. Thus, its charismatic chairman Kenneth Lay sent to paid mail announcing to them that the course of the action would gain 800% before the year 2010.

The revelation of the frauds and the collapse of the company

All starts, or finishes, on October 31st, 2001 dates to which the SEC (the gendarme of the American purse) opens an investigation.

December 2nd, 2001, the multinational is declared in bankruptcy; the course of the action falls of 90 dollars with 1 dollar in a few months. Approximately 5.000 paid is immediately laid off, while hundreds of thousands of small savers who had entrusted their pension funds to Enron (approximately two thirds of the stock exchange credits of the firm were held by pension funds or funds of mutual insurance company) lose the essence of their capital-retirement, because this one was made up mainly of shares in the company.

Penal procedures are open against the former leaders of the company: the treasurer, Ben Glisan was condemned to 5 years of prison. The finance manager, Andrew Fastow, at ten years (his wife, Lea, were it also condemned to have helped to mask the accounts).

May 25th, 2006, Kenneth Lay, 64 years, was recognized guilty of 6 counts of indictment, of which fraud and the plot; but he died of an infarction on July 6th before starting to purge his sorrow. Old the no.2 of Enron, Jeffrey Skilling was recognized guilty of 19 of the 28 charges, of which defrauds, plot, false claims and Délit of initiate and was condemned to 24 years and 4 months of prison on October 23rd, 2006.

The former partners of the company are also worried by the legal proceedings, in particular: the cabinet of Arthur Andersen, Citigroup, JP Morgan, Merrill Lynch, Deutsche Bank, CIBC, and the Bank Barclays.

NatWest

David Birmingham, Gilles Darby and Gary Mulgrew (Neil Coulbeck committed suicide), three former British bankers of the NatWest shown by the justice of the United States were extradited of their country on July 13rd, 2006.

See too

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