Enron Corporation was an American energy, commodities, and services company based in Houston, Texas.
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Enron has become synonymous with willful corporate fraud and corruption.
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Enron, seeing an opportunity with rising prices, was eager to jump into the market.
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Investors quickly bought Enron stock following the announcement "as they did with most things Internet-related at the time", with stock prices rising from $40 per share in January 2000 to $70 per share in March, peaking at $90 in the summer of 2000.
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Enron executives obtained windfall gains from the rising stock prices, with a total of $924 million of stocks sold by high-level Enron employees between 2000 and 2001.
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However, Enron's accounting would use estimates to determine how much their dark fiber would be worth when "lit" and apply those estimates to their current income, adding exaggerated revenue to their accounts since transactions were not yet made and it was not known if the cables would ever be active.
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Enron, seeing stability after the merger, began to look overseas for new possible energy opportunities in 1991.
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Enron's first such opportunity was a natural gas power plant utilizing cogeneration that the company built near Middlesbrough, UK.
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In 1990, Enron's Chief Operating Officer Jeffrey Skilling hired Andrew Fastow, who was well acquainted with the burgeoning deregulated energy market that Skilling wanted to exploit.
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Enron was originally involved in transmitting and distributing electricity and natural gas throughout the US.
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Enron developed, built, and operated power plants and pipelines while dealing with rules of law and other infrastructures worldwide.
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Enron grew wealthy due largely to marketing, promoting power, and having a high stock price.
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Enron was named "America's Most Innovative Company" by Fortune for six consecutive years, from 1996 to 2001.
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Enron was hailed by many, including labor and the workforce, as an overall great company, praised for its large long-term pensions, benefits for its workers, and extremely effective management until the exposure of its corporate fraud.
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The first analyst to question the company's success story was Daniel Scotto, an energy market expert at BNP Paribas, who issued a note in August 2001 entitled Enron: All stressed up and no place to go which encouraged investors to sell Enron stocks, although he only changed his recommendation on the stock from "buy" to "neutral".
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One example was during 1999 when Enron promised to repay Merrill Lynch's investment with interest in order to show a profit on its books.
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Debts and losses were put into entities formed offshore that were not included in the company's financial statements; other sophisticated and arcane financial transactions between Enron and related companies were used to eliminate unprofitable entities from the company's books.
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Enron's demise occurred after the revelation that much of its profit and revenue were the result of deals with special-purpose entities .
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Enron was found guilty of obstruction of justice during 2002 for destroying documents related to the Enron audit.
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Enron withdrew a naming-rights deal with the Houston Astros Major League Baseball club for its new stadium, which was known formerly as Enron Field .
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Enron used a variety of deceptive and fraudulent tactics and accounting practices to cover its fraud in reporting Enron's financial information.
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The executives and insiders at Enron knew about the offshore accounts that were hiding losses for the company; the investors did not.
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Under Skilling, Enron adopted mark-to-market accounting, in which anticipated future profits from any deal were tabulated as if currently real.
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Enron initially planned to retain its three domestic pipeline companies as well as most of its overseas assets.
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However, before emerging from bankruptcy, Enron sold its domestic pipeline companies as CrossCountry Energy for $2.
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Enron sold its last business, Prisma Energy, during 2006, leaving Enron asset-less.
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Enron has been featured since its bankruptcy in popular culture, including in The Simpsons episodes That '90s Show and Special Edna, which features a scene of an Enron-themed amusement park ride.
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Enron sold another $29 million worth of stock in the open market.
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News of Enron's problems, including the millions of dollars in losses they hid, became public about 10:30 that morning, and the stock price soon decreased to less than one dollar.
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Subsequently, Enron traders were revealed as intentionally encouraging the removal of power from the market during California's energy crisis by encouraging suppliers to shut down plants to perform unnecessary maintenance, as documented in recordings made at the time.
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Enron was an extensive futures trader, including sugar, coffee, grains, hogs, and other meat futures.
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Enron owned three paper and pulp products companies: Garden State Paper, a newsprint mill; as well as Papiers Stadacona and St Aurelie Timberlands.
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Enron had a controlling stake in the Louisiana-based petroleum exploration and production company Mariner Energy.
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Enron International was Enron's wholesale asset development and asset management business.
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Unlike other business units of Enron, Enron International had a strong cash flow on bankruptcy filing.
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Enron International consisted of all of Enron's foreign power projects, including ones in Europe.
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Enron owned half of the plant's equity, with the remaining 50 percent split between four regional electricity companies.
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Enron International constructed power plants and pipelines across the globe.
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The public and media believed it was unknown why Enron wanted to sell these assets, suspecting it was because Enron was in need of cash.
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The situation was further complicated because a few days earlier, Enron had filed paperwork admitting it had falsified financial statements for five years.
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