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Non-Tech : The ENRON Scandal
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To: Mephisto who wrote (4238)7/7/2002 9:34:32 PM
From: TigerPaw  Read Replies (1) of 5185
 
Bush wasn't duped by Kenney Boy, Bush taught Kenney Boy!
nytimes.com

Harken did badly. But for a time it concealed its failure — sustaining its stock price, as it turned out, just long enough for Mr. Bush to sell most of his stake at a large profit — with an accounting trick identical to one of the main ploys used by Enron a decade later. (Yes, Arthur Andersen was the accountant.) As I explained in my previous column, the ploy works as follows: corporate insiders create a front organization that seems independent but is really under their control. This front buys some of the firm's assets at unrealistically high prices, creating a phantom profit that inflates the stock price, allowing the executives to cash in their stock.

That's exactly what happened at Harken.
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