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The enron scandal and the fall of one of americas largest companies

Many of the biggest corporate accounting scandals in history happened during that time. Here's a chronological look back at some of the worst examples. Waste Management Scandal 1998 Company: Houston-based publicly traded waste management company What happened: Buntrock and other top executives; Arthur Andersen Company auditors How they did it: The company allegedly falsely increased the depreciation time length for their property, plant and equipment on the balance sheets.

How they got caught: A new CEO and management team went through the books. After the scandal, new CEO A. Maurice Meyers set up an anonymous company hotline where employees could report dishonest or improper behavior. Enron Scandal 2001 Company: Houston-based commodities, energy and service corporation What happened: How they did it: Kept huge debts off balance sheets. Turned in by internal whistleblower Sherron Watkins; high stock prices fueled external suspicions.

Lay died before serving time; Skilling got 24 years in prison.

  1. There were deals to be made everywhere, and the company was ready to create a market for anything that anyone was willing to trade. Freddie Mac 2003 Company.
  2. SEC didn't prosecute due to lack of evidence. Buntrock and other top executives; Arthur Andersen Company auditors How they did it.
  3. He was arrested the next day.
  4. Satyam Scandal 2009 Company.
  5. Released after the Central Bureau of Investigation failed to file charges on time. HealthSouth Scandal 2003 Company.

The company filed for bankruptcy. Arthur Andersen was found guilty of fudging Enron's accounts.

The 10 Worst Corporate Accounting Scandals of All Time

WorldCom Scandal 2002 Company: Telecommunications company; now MCI, Inc. Underreported line costs by capitalizing rather than expensing and inflated revenues with fake accounting entries.

  • Many of the biggest corporate accounting scandals in history happened during that time;
  • Siphoned money through unapproved loans and fraudulent stock sales;
  • Satyam Scandal 2009 Company:

How he got caught: CFO was fired, controller resigned, and the company filed for bankruptcy. Ebbers sentenced to 25 years for fraud, conspiracy and filing false documents with regulators. Within weeks of the scandal, Congress passed the Sarbanes-Oxley Act, introducing the most sweeping set of new business regulations since the 1930s. Tyco Scandal 2002 Company: New Jersey-based blue-chip Swiss security systems. Siphoned money through unapproved loans and fraudulent stock sales.

Money was smuggled out of company disguised as executive bonuses or benefits. SEC and Manhattan D. Kozlowski and Swartz were sentenced to 8-25 years in prison. HealthSouth Scandal 2003 Company: Largest publicly traded health care company in the U.

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How he did it: Allegedly told underlings to make up numbers and transactions from 1996-2003. Scrushy was acquitted of all 36 counts of accounting fraud, but convicted of bribing the governor of Alabama, leading to a 7-year prison sentence. Scrushy now works as a motivational speaker and maintains his innocence.

Freddie Mac 2003 Company: Federally backed mortgage-financing giant. Intentionally misstated and understated earnings on the books. Allegedly booked loans as revenue, steered clients to insurers with whom AIG had payoff agreements, and told traders to inflate AIG stock price. SEC regulator investigations, possibly tipped off by a whistleblower.

Enron scandal

Greenberg was fired, but has faced no criminal charges. Lehman Brothers Scandal 2008 Company: Global financial services firm.

  • New Jersey-based blue-chip Swiss security systems;
  • Kept huge debts off balance sheets;
  • Houston-based publicly traded waste management company What happened;
  • SEC didn't prosecute due to lack of evidence;
  • Freddie Mac 2003 Company;
  • Arthur Andersen came under intense scrutiny and eventually lost a majority of its clients.

Allegedly sold toxic assets to Cayman Island banks with the understanding that they would be bought back eventually. Forced into the largest bankruptcy in U. SEC didn't prosecute due to lack of evidence. Bernie Madoff Scandal 2008 Company: Investors were paid returns out of their own money or that of other investors rather than from profits.

Madoff told his sons about his scheme and they reported him to the SEC. He was arrested the next day. Prison time for Friehling and DiPascalli. Madoff's fraud was revealed just months after the 2008 U. Satyam Scandal 2009 Company: Indian IT services and back-office accounting firm. Falsified revenues, margins and cash balances to the tune of 50 billion rupees.

Admitted the fraud in a letter to the company's board of directors.

  • Mark-to-market accounting allowed the company to write unrealized future gains from some trading contracts into current income statements, thus giving the illusion of higher current profits;
  • Underreported line costs by capitalizing rather than expensing and inflated revenues with fake accounting entries;
  • How he got caught;
  • Turned in by internal whistleblower Sherron Watkins; high stock prices fueled external suspicions;
  • Furthermore, the troubled operations of the company were transferred to so-called special purpose entities SPEs , which are essentially limited partnerships created with outside parties.

Raju and his brother charged with breach of trust, conspiracy, cheating and falsification of records. Released after the Central Bureau of Investigation failed to file charges on time.

  1. The company filed for bankruptcy. New Jersey-based blue-chip Swiss security systems.
  2. Intentionally misstated and understated earnings on the books. On December 2, 2001, Enron filed for Chapter 11 bankruptcy protection.
  3. Underreported line costs by capitalizing rather than expensing and inflated revenues with fake accounting entries. Kozlowski and Swartz were sentenced to 8-25 years in prison.
  4. He was arrested the next day. How they got caught.

In 2011 Ramalinga Raju's wife published a book of his existentialist, free-verse poetry.