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Even in the midst of Enron rising so fast, there were a ton of people who knew something wasn't right and none of them did anything about it. And why was that?

Even in the midst of Enron rising so fast, there were a ton of people who knew something wasn't right and none of them did anything about it. And why was that? Money and a LOT of it. Management didn't want to do anything because of they were getting rewarded for how well the company was doing. Why kill your own gravy train? Why would the auditors stop it? The same reason, they were making millions in consulting fees and had no reason to stop the train. Congress could have done something, but thwarted Arthur Levitt's proposed new rule barring accountants acting as consultants. The rule was shot down and the SEC was threatened with losing their funding if they did this by some 50 senators. So even if this software predicts rouge traders, it can only alert the right people to do something about it. And even if it does, what are the odds those people have the morale compass to make the right decision? Probably less than 50/50 because of the money involved. Having the software is only the first step in a long chain of decisions which are made by the weakest link in the chain, the human being.

ConfuciusSay 11y ago
If anyone cared to look, the troubles with Enron's accounting were right there in their SEC filings - long before the shit hit the fan. In fact the reporter who broke the story did it by simply analyzing the SEC filings, as opposed to getting some insider information, or talking to a whistleblower.
- pyvpx 11y ago
  can you recommend any resources to read more about this? I wasn't aware and it sounds incredibly interesting to me.
  - ethanbond 11y ago
    "The Smartest Guys in the Room" is a fantastic documentary about the whole ordeal. It's not too information dense so you probably want other resources. It's a very good low-effort primer that will leave you with a "what the f*?!" look on your face for the rest of the week.
  - tedunangst 11y ago
    http://money.cnn.com/2006/01/13/news/companies/enronoriginal_fortune/index.htm http://money.cnn.com/2006/01/13/news/companies/enronoriginal...
  - ConfuciusSay 11y ago
    http://www.newyorker.com/magazine/2007/01/08/open-secrets-3 http://www.newyorker.com/magazine/2007/01/08/open-secrets-3

ConfuciusSay 11y ago

If anyone cared to look, the troubles with Enron's accounting were right there in their SEC filings - long before the shit hit the fan. In fact the reporter who broke the story did it by simply analyzing the SEC filings, as opposed to getting some insider information, or talking to a whistleblower.

pyvpx 11y ago
can you recommend any resources to read more about this? I wasn't aware and it sounds incredibly interesting to me.
- ethanbond 11y ago
  "The Smartest Guys in the Room" is a fantastic documentary about the whole ordeal. It's not too information dense so you probably want other resources. It's a very good low-effort primer that will leave you with a "what the f*?!" look on your face for the rest of the week.
- tedunangst 11y ago
  http://money.cnn.com/2006/01/13/news/companies/enronoriginal_fortune/index.htm http://money.cnn.com/2006/01/13/news/companies/enronoriginal...
- ConfuciusSay 11y ago
  http://www.newyorker.com/magazine/2007/01/08/open-secrets-3 http://www.newyorker.com/magazine/2007/01/08/open-secrets-3