This case is about the company Enron which grew to become the seventh largest company in the United States. There were many problems in the Enron case. First, when the gas bank was created, they should have thought twice about this since many of the natural gas producers need cash which Enron did not have. This would lead to problems for Enron. Second, Enron created SPEs which caused more problems because they were providing money and keeping the money off the books so that investors could not see what was actually going on. These SPEs only complicated issues for Enron and its investors.
The internal controls that were ignored when LJM1 was created were one, LJMs books were kept separate from Enron's. Arthur Andersen... View More »