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Scandals - Essay Example

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Summary
An allegation or a set of allegations which is widely publicized and damages the reputation of an institution, creed or an individual is termed as a scandal. Recently, the world has witnessed some major scandals and scams with reference to many organizations, individuals and…
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Scandals

Download file to see previous pages... Although the firm stuck to its original produce of operating gas lines and building power plants, it gained reputation due to its distinctive trading business. The organization also started opening businesses in many domains like weather futures, advertiser’s broadcast time and Internet bandwidth.
However the company spent a sizeable amount on lobbying to get help for advancing projects in other nations and furthering the deregulation of energy. In order to display high stock prices and sustain growth, the firm hid its losses by means of complex accounting practices. However the stock prices of Enron Corporation tumbled and the scam was exposed (Li 2010).
The Enron Scam is one of the worst examples of ethical failure. Top executives working with Enron provided biased and false information about the company which led the stock prices to rise. They were able to earn millions and were fully aware that they were driving the company to ruin. While the top executives earned money, ordinary people like workers lost their jobs and sizeable retirement earnings. Also ordinary shareholders lost a lump sum amount due to the scam.
Enron permitted insider trading. Hence a lot of top executives were well aware of the manipulation of financial accounts conducted in Enron. Hence, these people took advantage of the situation and sold their stocks at inflated prices. Enron failure can be attributed to leadership issued wherein three top executives, namely, Kenneth Lay, Andrew Fastow and Jeffrey Skilling knowingly engaged in ethical misconduct. Moreover the board of directors of this organization never carried out their responsibilities seriously. The company’s chairman was also not very interested in the matters of the firm (Culpan and Trussel 2005). The financial and accounting malpractices spurred the wave of a number of stringent laws and regulations which were enforced by the American government post Enron.
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