Can someone please explain ENRON SCANDAL. Why was it one of the biggest scandal? What banks...

Can someone please explain ENRON SCANDAL. Why was it one of the biggest scandal? What banks were involved and what happened in this scandal? What fraud was committed and what was the motivation for bank managers to commit this scandal.

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Expert Solution

The ENRON SCANDAl is one of the biggest scandal as ENRON is made up by the merger of very big two companies that areHouston Natural GAs Co. and another is Inter North Inc. It is also very big scandal as ENRON was considered in the Fortune Companies of the america It is regularly for 6 years in the Fortune Companies.

In this Scandal it was happened that the CFO of the Enron named Andrew Fastow creates a ver large network of companies for hiding the loss of the Enron. At that time the share price of the Enron was at all time high at a price of 90.56$ . After sometime the CFO of the Enron named Andrew Fastow was replaced by the person named Jeffray skilling. Then suddenly the Skilling resigns from his job and Lay becomes the CFO once again and then reports suddenly a loss of $137 millions. and then the shareprice of the Enron was at 52 week low at a price of near about 40$. And after that some years time to time losses are found and the shareprice reduces and its stock closes at $0.26 and then after the justice deoartment can launches a criminal investigation on it. The Banks involved in this scandal are Credit Suisse Group AG, Deutsche Bank AG and Bank of America's Merrill Lynch .

jeff jeffy answered 1 year ago

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