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Enron From A Legal Standpoint

Enron
The tragic fall of Enron led to a revolution in the way people think about large corporations. Before the surge of white collar crime in the late 1990s and early 2000s, there were no regulations in place that forced corporations to accurately report their finances. This led to a series of immoral and devious deceptions that caused many people to unfairly lose their life savings without any form of recourse, while a select few were given immense wealth throughout the process. Enron failed to act with any sort of compassion for its employees and investors. It has become the symbolic spokesperson of fiscal liberty in this era.
Enron was able to circumvent the law with their liberal accounting firm Arthur Anderson. This firm acted in bad faith, ignoring the generally accepted accounting principles (GAPP) that were established by the Securities Exchange Committee (SEC), in order to help Enron falsify their financial reports. Arthur Anderson’s failure to act in good faith and maintain their fiduciary duty as an accounting firm has caused them to no longer be a viable company. As far as managing their legal factor I could have given both Enron and Arthur Anderson the same advice. They both should not have engaged in unethical business practices. Enron falsified their financial reports and Arthur Anderson enabled them to do so. These companies can’t manage their legal factors because what they both were doing was illegal in the first place.
However, the real tragedy resulting from this scandal are the poor investors and employees of Enron who had their life savings and pension invested in the company that was secretly robbing them. These people who have become the victim of large losses can most likely sue to get compensated for their investment. Enron can certainly be held responsible for gross negligence, fraud, and failure to act within their fiduciary duty to their investors, as well as failure to act in good faith.
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