Enron: The Smartest Guys in the Room

Enron: The Smartest Guys in the Room is a documentary about the rise and fall of Enron, one of the biggest business scandals in American history. At its peak, the company was the 7th largest company in America with 20,000 employees all with their pensions made up with company shares. However, behind the scenes, CEO Ken Lay and COO Jeffrey Skilling were busy inflating the balance sheet, including mark-to-market profits by which projected earnings are put down as the company's profits which didn't exist. Then there's CFO Andy Fastow. Fastow invented companies and suceeded in pulling the wool over major banks to contribute money to them which went straight to Enron. Meanwhile Enron traders practically took over the company and ran amok which culminated in them making huge profits from the Californian Electric fiasco which they instigated. They told power plants to shut down citing technical problems which meant that the cost of energy increased and they made increasing profits from California residents misery.

By the time anyone realised what was going on, Lay, Skilling and Fastow and fellow executives had sold over a billion dollars of shares creating tens of millions in personal wealth as the company crumbled, 20,000 employees lost their job and their pension savings were lost. The documentary shows personal phonecalls between meetings held by Skilling and daming phonecalls between traders admitting their part in the energy crisis and how smug they thought they were being. So far Fastow has got 10 years in prison and Lay and Skilling are due in court this month so I would recommend checking out the documentary and following it up in the news. It is both entertaining and fascinating that a company could get away with fraud for so long and dupe the entire country into believing they had huge profits when they had nothing but debt.

I would give this 4 CEOs out of 5