(1) Enron was formed by a merger between Houston Natural Gas and Omaha-based InterNorth under the guidance of Kenneth Lay. Kenneth, the CEO of Houston Natural Gas assumes the CEO position for enron.
(2) In 1990, Lay hires Jeffry Skilling who is soon after named CEO and managing director of Enron Capital & Trade Resources, the subsidiary responsible for energy trading and marketing. He was promoted to president and chief operating officer (CEO) of Enron during 1997, second only to Lay, while remaining the manager of Enron Capital & Trade Resources. During 1999, Enron initiated EnronOnline, an Internet-based trading operation, which was used by virtually every energy company in the United States.
In 1997 Enron acquired electric utility company Portland General Electric Corp. for about $2 billion. By the end of that year, Skilling had developed the division by then known as Enron Capital and Trade Resources into the nation’s largest wholesale buyer and seller of natural gas and electricity. Revenue grew to $7 billion from $2 billion, and the number of employees in the division skyrocketed to more than 2,000 from 200. Using the same concept that had been so successful with the gas bank, they were ready to create a market for anything that anyone was willing to trade: futures contracts in coal, paper, steel, water and even weather.
Eventually, the company diversified its trading activities to more than 1,800 products or contracts and thirteen currencies. Enron’s stock increased dramatically at the beginning of the new millennia, eventually peaking at $90.56 in August of 2000.
(3) Sound’s great, but most of this success was smoke and mirrors.
Several examples of Enron’s Unethical Practices Follow:
In 2001 Enron exploited loopholes created in the deregulation of the Californian Energy Market. As such, California experienced an Energy Crisis resulting from two rolling blackouts.
First, Enron traders created artificial electricity shortages by shutting...