Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : The ENRON Scandal -- Ignore unavailable to you. Want to Upgrade?

To: Baldur Fjvlnisson who wrote (2327)	2/4/2002 5:24:06 PM
From: The Duke of URL©	Read Replies (1) \| Respond to of 5185

The problem with you and your Black Helicopter Buddies is that you have no clue as to how to read a balance sheet or what really happened to Enron. Because of that, you wish to spread as much FUD, Fear, Uncertainty and Doubt as you can to cover up your own ignorance. It is what we call, non-operative. It doesn't give us away to solve the problem, but is more like a vent. Even though it does set the Olympic record for the Cut and Paste. But I mean that in the nicest possible way.

To: Baldur Fjvlnisson who wrote (2327)	2/4/2002 6:45:02 PM
From: Smart_Money	Read Replies (1) \| Respond to of 5185

Don't feel too bad Baldur. Duke and I have had our run ins and after a few swipes we walked away friends. Now I have great respect for Duke.

To: Baldur Fjvlnisson who wrote (2327)	2/4/2002 10:16:39 PM
From: Mephisto	Read Replies (1) \| Respond to of 5185

Internal probe finds massive failures at Enron Deals for insiders generated millions By Peter Behr a Nd David S. Hilzenrath, Washington Post, 2/3/2002 Enron Corp.'s collapse last fall was caused by massive failures by its management, board, and outside advisers as well as self-enrichment by some employees ''in a culture that appears to have encouraged pushing the limits,'' according to a report by a special investigating committee of the company's board of directors. The 218-page report, filed with a federal bankruptcy court in New York yesterday, described a corporation whose senior officers and board of directors made a ''fundamentally flawed'' decision that ultimately led to the collapse of the company, once ranked as the nation's seventh-largest. The board, on the recommendation of its chairman, Kenneth Lay, and chief executive Jeffrey Skilling, waived ethics rules in 1999 and allowed Enron's chief financial officer, Andrew Fastow, to head private partnerships that would buy and sell assets with the company, while keeping his Enron position. The board and top executives then neglected to monitor Fastow's activities, or even ask how much money he made - $30 million - until last October, after media reports. Fastow, who was ousted last October, and a few other employees ''were enriched by tens of millions of dollars they never should have received'' and created a web of partnerships that facilitated the ''manipulation of Enron's financial statements,'' the report said. In one transaction in 2000, Fastow turned one partnership investment of $25,000 into a personal $4.5 million profit in two months. He also brought two other employees into the deal, each of whom made $1 million off a $5,800 investment in the same period. The report said some of the partnership transactions were designed to hide huge Enron losses from the investing public and resulted in nearly $1 billion in overstated profits in just the 12 months that ended last fall. That was much more than the $586 million cut in profit over five years that the once high-flying energy trader reported last November after revealing accounting errors related to some of the partnerships. That announcement triggered a dive in Enron's stock price, costing shareholders and employees billions of dollars and prompting a dozen congressional and federal investigations of the Houston company's demise. The report released yesterday was prepared under the direction of William Powers Jr., dean of the University of Texas School of Law, who joined the board Oct. 31 after Enron first reported its third-quarter loss and appointed a special investigating committee. The report cited ''a flawed idea, self-enrichment by employees, inadequately-designed controls, poor implementation, inattentive oversight, simple (and not so simple) accounting mistakes, and overreaching in a culture that appears to have encouraged pushing the limits.'' It read: ''The tragic consequences'' of mishandling the partnerships ''were the result of failures at many levels and by many people: Enron founder and longtime chief executive Lay was ''the captain of the ship,'' but did not ensure that those who reported to him were performing their oversight duties properly. Lay resigned last month at the insistence of Enron's creditors. Skilling urged the board to approve the arrangement with Fastow, the report said. Other Enron employees accuse Skilling of approving a partnership transaction in March last year that was designed to conceal large operating losses from the board. Skilling denies that charge. The board of directors waived Enron's conflict of interest rules to allow Fastow to run the partnerships and set up procedures to monitor's Fastow's compensation, but never followed up. Enron's outside auditor, Arthur Andersen LLP, ''did not fulfill its professional responsibilities'' in its auditing work, the report said. The company's outside law firm, Vinson & Elkins, ''should have brought a stronger, more objective and more critical voice'' to its review of Enron's required disclosures to investors about the convoluted partnership transactions and Fastow's role in them. This story ran on page A10 of the Boston Globe on 2/3/2002. © Copyright 2002 Globe Newspaper Company. [ Send this story to a friend