Enron

Páginas: 4 (908 palabras) Publicado: 11 de abril de 2011
THE ENRON CASE
Enron Corporation was created in 1985 with the merger of Internorth, a succesful energy company, with the smaller company Houston Natural Gas. This merger was an attempt developed byInternorthʼs management to form a system for pipeline gas on a national level. Enron transmitted and distributed natural gas and electricity through the United States. From the beggining the companyintended to expand from just the sell and trasportation of natural gas. The year after the merger, Enronʼs Chief Executive Officer, who was Internorthʼs former CEO, was replaced by Kenneth (Ken) Lay,former Houston Natural Gas CEO, who also became a chairman. In 1989, Dr. Wendy Gramm sworn in as chairwoman of the Commodity Futures Trading Commission. That same year, Enron began trading natural gascommodities Jeffrey (Jeff) Skilling, a consultant, was hired by Enron in 1990 to lead a new division, Enron Finance Corporation, by 1997 he was the Chief Operating Officer and President of Enron.Shortly after his arrival at Enron, Skilling hired Andrew (Andy) Fastow, who was familiar with deregulated markets, which were the ones Skilling intended to exploit, as Enronʼs Chief Financial Officer. Inthe mid-late 80ʼs oil prices radically fell, leading gas consumer to switch to these cheaper alternatives, such as fuel oil. Enron put a lot of pressure on the government for gas prices to bederegulated. They achieved and gas prices, which were stable until then began to radically and irregularly rise and fall, creating uncertainity among buyers. Thatʼs when Enron began marketing “futurecontracts”, they were guaranteeing the price and the supply of gas and charging fees for the transactions and for assuming the risks associated with gas.

This worked fine for Enron and so they lobbied thegovernment once again, this time they intended to deregulate the electricity markets, and, some years later, they achieved to do so. Enron began to buy and sell gas and electricity futures. Enronʼs...
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