Formed in 1985 from a merger of Houston Natural Gas and Internorth, Enron Corp.

was the first nationwide natural gas pipeline network. Over time, the firms business focus shifted from the regulated transportation of natural gas to unregulated energy trading markets. The guiding principle seems to have been that there was more money to be made in buying and selling financial contracts linked to the value of energy assets (and to other economic variables) than in actual ownership of physical assets. 2001, all observers including Wall Street professional this transformation outstanding success. Enrons reported annual revenues grew from under $10 billion in the early 1990s to $139 billion in 2001, placing it fifth on the Fortune 500. Enrons problems did not arise in its core energy operations, but in other ventures, particularly dot com investments in Internet and high-tech communications businesses.

The ENRON Scandal is considered to be one of the most famous within American history; The following took place in the midst of the ENRON Scandal: ENRON: The Deregulation of ENRON While the term regulation within a commercial and corporate setting typically applied to the governments ability to regulate and authorize commercial activity and behavior with regard to individual businesses, the ENRON executives applied for and were subsequently granted government deregulation. As a result of this declaration of deregulation, ENRON executives were permitted to maintain agency over the earnings reports that were released to investors and employees alike. This agency allowed for ENRONs earning reports to be extremely skewed in nature losses were not illustrated in their entirety, prompting more and more investments on the part of investors wishing to partake in what seemed like a profitable company ENRON: Misrepresentation By misrepresenting earnings reports while continuing to enjoy the revenue provided by the investors not privy to the true financial condition of ENRON, the executives of ENRON embezzled funds funneling in from investments while reporting fraudulent earnings to those investors; this not only proliferated more investments from current stockholders, but also attracted new investors desiring the enjoy the apparent financial gains enjoyed by the ENRON corporation. ENRON: Fraudulent Energy Crisis In the year 2000, subsequent to the discovery of the crimes listed in the above ENRON Scandal Summary, ENRON had announced that there was a critical circumstance within California with

regard to the supply of Natural Gas. Due to the fact the ENRON was a then-widely respected corporation, the general populaces were not wary about the validity of these statements. However, upon retroactive review, many historians and economists suspect that the ENRON executives manufactured this crisis in preparation of the discovery of the fraud they had committed although the executives of ENRON were enjoying the funds rendered from investments, the corporation itself was approaching bankruptcy. ENRON: Misappropriation An ENRON the acts of misappropriation undertaken by ENRON Executives may be defined as the criminal activity involving the unlawful and unethical attainment of monies and funding by employees; typically, funds that are embezzled are intended for company use in lieu of personal use. While the ENRON executives were pocketing the investment funds from unsuspecting investors, those funds were being stolen from the company, which resulted in the bankruptcy of the company. ENRON: Losses and Consequences Due to the actions of the ENRON executives, the ENRON Company went bankrupt. The loss sustained by investors exceeded $70 billion. Furthermore, these actions cost both trustees and employees upwards of $2 billion; this total is considered to be a result of misappropriated investments, pension funds, stock options, and savings plans as a result of the government regulation and the limited liability status of the ENRON Corporation, only a small amount of the money lost was ever returned.