The Enron Bankruptcy Scandal

America is famous for three things: beautiful mountains, sweeping prairies, and corporate buyouts. 

Enron was formed in 1985 when two gas companies, Houston Natural Gas and Internorth, merged. 

Within its first few years of existence under CEO chairman Kenneth Lay, Enron took the number seven slot on Fortune magazine's list of the top 500 US companies. 

In 2000, the company employed 21,000 people and raised its annual revenue to $111 billion. 

However, within the next year, Enron's stock price took a wild nosedive, dropping from $90.75 in August of 2020 to just under $0.26 by the time it closed on November 30, 2001. 

As the stock price of Enron collapsed, Kenneth Lay sold huge amounts of his Enron stock while encouraging Enron employees to buy more shares while assuring them that the company was going to come back from the downturn. 

Employees watched in horror as their retirement, savings, and tax-sheltered accounts dried up as Enron's stock price crashed. 

 By the end of the year, Enron filed for bankruptcy, cost investors billions of dollars, lost 5,600 jobs, and crushed nearly $2.1 billion in company pension plans. 

However, CEO Kenneth Lay and his crony Jeffery K. Skilling walked away pretty much unscathed. It was later revealed that they had been destroying massive amounts of financial information that showed that the company was going under just so they could pad their pockets. 

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Post originally appeared on History Obsessed.