I read the interview on Sarah Teslik and found out that Enron is an isolated event. You can sue Enron, but no one in the business will give you a check, Eron will. The shareholders of Enron will then take the left over money and pay it to themselves. Also, you will not put anyone in jail by sueing Enron.
Executives can use millions of money from the Enron business in stocks. This was the issue of Expensing Stock Options. The stock option turned Enron into a Ponzi scheme; a fraudelent investment operation that pays returns to seperate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned.
When CEOs sell stock, they are supposed to tell the public right away. But if they know their company is going to go bankrupt, they delay revealing the fact that they are selling stocks. To get around having to tell the public, the CEO gets the company to give them a big loan. To pay it back, they return their stock as a loan repayment. In doing this, they get their cash out of the company and don't have to tell the public for over a year. This is how Enron did it and got in trouble. Enron had many people involved who kept their mouths shut to the public. This is how they got away with hiding things for so long, but in the end, they got caught.
No comments:
Post a Comment