The following excerpts come directly from Wikipedia. Follow the link below for the whole story. This event will go down in history as being an important cautionary tale about ethics, finance, and big business.
The Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an Americanenergy company based in Houston, Texas, and the dissolution of Arthur Andersen, which was one of the five largest auditand accountancy partnerships in the world. In addition to being the largest bankruptcy reorganization in American history at that time, Enron was attributed as the biggest audit failure.[1]
Shareholders lost nearly $11 billion when Enron's stock price, which hit a high of US$90 per share in mid-2000, plummeted to less than $1 by the end of November 2001.
Many executives at Enron were indicted for a variety of charges and were later sentenced to prison. Enron's auditor, Arthur Andersen, was found guilty in a United States District Court, but by the time the ruling was overturned at the U.S. Supreme Court, the firm had lost the majority of its customers and had shut down. Employees and shareholders received limited returns in lawsuits, despite losing billions in pensions and stock prices. As a consequence of the scandal, new regulations and legislation were enacted to expand the accuracy of financial reporting for public companies.[3] One piece of legislation, the Sarbanes-Oxley Act, expanded repercussions for destroying, altering, or fabricating records in federal investigations or for attempting to defraud shareholders.[4] The act also increased the accountability of auditing firms to remain unbiased and independent of their clients.[3]
http://en.wikipedia.org/wiki/Enron_scandal
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