Enron Ten Years Later

It was 10 years ago this month that Enron collapsed in what was the most complex white collar crime ever seen. We weren’t blogging for the Financial Fraud Law Blog back then, but boy oh boy what a story that would have been to write about.

Top officials at the Houston-based company cheated investors and enriched themselves through complex accounting gimmicks like overvaluing assets to boost cash flow and earnings statements, which made the company even more appealing to investors. When the company declared bankruptcy in December 2001, investors lost millions, prompting numerous investigations.

The sheer magnitude of the case led to the creation of the multi-agency Enron Task Force with investigators and analysts from the FBI, the Internal Revenue Service-Criminal Investigation Division, the Securities and Exchange Commission, and prosecutors from the Department of Justice.

Twenty-two people were convicted for their actions related to the massive financial fraud, including Enron’s chief executive officer, president/chief operating officer, chief financial officer, chief accounting officer, and others. Indeed, as recently noted by Michael E. Anderson, assistant special agent in charge of the FBI’s Houston Division, who led the FBI’s Enron Task Force in Houston, “The Enron Task Force’s efforts resulted in the convictions of nearly all of Enron’s executive management team.”

Certainly, Enron did not put an end to white collar crime - see Madoff, Raj Rajaratnam, and any of the thousands of blog posts we have written over the years - but it makes us wonder what potential benefits these criminals seek that can outweigh the risks they are taking to their lives, their reputations, their personal wealth, their families, and their friends.

(The photo shows some of the boxes of evidence collected by federal agents in the weeks after Enron declared bankruptcy Dec. 2, 2001.)