LOCAL LAWSUIT

Local Lawsuit



Local Lawsuit

Introduction

Corporate crimes not only have financial and physical consequences, but they also have heavy social consequences. These violations of trust hinder people's quality of life and perpetuate further feelings of victimization. Corporations are in a unique position to victimize people and society on numerous levels. Due to the nature of the offense, the number of people often involved, and the complexities of the actions, corporate crimes may be punished rather leniently if they are punished at all. In addition, many victims do not even know they have been victimized.

Enron Company was founded in 1985 and over 6 years become one of the biggest traders in energy resources in the United States. Its success is largely facilitated by the fact that the leadership of Enron led bookkeeping, overstating income data, allowing the company share prices on stock exchanges increased. In 2001, information about the machinations became known and Enron went bankrupt, resulting in tens of thousands of employees lost their jobs, and shareholders lost their investment (Swartz, 2003).

ENRON was emerging as one of the most prominent companies in economic, of the United States, reaching trading on the stock exchange above $84 a share, with the introduction of profit of very high in the published financial statements. They invested in several companies, including the broadband business (Telecom), which allowed them to raise more benefits and ensure the company's confidence to investors and bankers, who invested their capital in the company. Executives of the company were encouraging employees to invest their retirement funds and retired in joint actions with the guarantee that would double their investment.

Through accounting maneuvers, this company could divert funds to personal accounts and investments which were not profitable for the company's financial situation. The company's financial statements presented false profit figures, bringing the company into bankruptcy and so thousands of people and employees who had their investment in this company, lose their money. Among the factors that led to the collapse of Enron, were the lacks of integrity on the part of chief executive Kenneth Lay, which allowed the submission of false financial information to manipulate the energy market of California. Executives left the company dominated by greed, exceeding federal guidelines that should be respected. The thirst for money led them to defraud thousands of invaders and employees by relying on false liquidity presented publicly.

The external auditors, according to statements relied on the information supplied by the company. We can also note that the auditors did not comply with the independence they should conduct in their audit activities.

Discussion

Former Enron CEO Jeffrey Skilling Corporation (Jeffrey Skilling) filed a U.S. Supreme Court appeal against the decision of the court, which sentenced him to 292 months in prison (more than 24 years) for fraud in a large scale. The Supreme Court of the United States on rejected the appeal of Enron Corp investors who sought to advance a collective action against the investment banks that closed financing plans for the energy company which went bankrupt in ...