As many of you are already familiarize with Enron corporation, I will not spend too much time introducing this blog. The fall of Enron is considered to be the largest bankruptcy in American economic history. Swift collapse revealed a trail of enormous efforts to hide losses and a number of fraudulent activities*. The link below is the short scene from the video “The Smartest Guy in the Room”, and it describes how Enron used Californian power grid to cause artificial demand for electricity and sell it back to desperate consumers under astronomical price. In addition, the video reveals audio transcripts of conversation between Enron’s traders that will undoubtably raise ethical questions among listeners.
* While watching this video keep in mind a series of legislative reforms enacted in the period 1978-1992, that liberated utilities (including electricity) to be bought and re-sold at whatever prices traders saw fit. Although some actions in the video might look like fraudulent activities, in the eyes of the Supreme Court were classified only as unethical business conduct.