Part 10/12:
The final chapter in our exploration is Enron, a company once heralded as America’s seventh-largest corporation and a leader in energy innovation. Founded in 1985 by Kenneth Lay, Enron expanded aggressively, and with the hiring of Jeffrey Skilling in 1990, a controversial accounting method known as "Mark to Market" transformed the company’s earnings reports.
This accounting trick allowed Enron to book potential future profits as real revenue, leading to inflated stock prices and a false sense of security among investors. The company encouraged employees to invest in its stock while secretly liquidating their shares. When journalists began asking questions in 2001, the financial house of cards collapsed, resulting in Enron's bankruptcy, which was the largest in U.S. history at that time.