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Corporate Conviction

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Corporate Executive Criminal Conviction

Ricaviannca Weissenberg

ETH/321

July 13,2015
Christine Benway

Corporate Executive Criminal Conviction

Enron, an American energy company based in Texas, was named by Fortune as “America’s Most Innovative Company” for six years in a row, with revenues of approximately $111 billion. However in 2001, Sherron Watkins, Enron’s finance executive, discussed her concerns about the company’s financial and accounting irregularities with its CEO, Kenneth Lay but was later asked to ignore the issue along with its auditor, Arthur Andersen. Andersen, who was later convicted, turned the other cheek while Watkins, “the whistle blower”, did not. In the same year, the “Enron scandal” was born. The scandal was disclosed to the public and has become, since then, the epitome of corruption and corporate fraud. Additionally, Enron was cited as “the biggest audit failure” ever.

The former Enron CEO along with four Merrill Lynch & Corporation directors were convicted by a jury for accounting fraud while Arthur Andersen was found guilty in a U.S. District Court for illegally destroying documents related to the investigation. Moreover, the court found them guilty of hiding billions of dollars in debt from failed projects and deals along with willful fraudulent behaviors.

Ethics Greed is not illegal but it can drive a corporation to commit wrongful doings and eventually crimes. The driving factor in Enron’s case was greed amongst others. Businessmen, regardless of their position in the hierarchy, should not seek for personal gain at the expense of shareholders, as seen on Enron’s case. Because of greed, they were led to manipulate the books and provide false financial information. Such decisions were based on malice and negligence. From a lie, they found themselves having to cover up

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