Enron: Market Exploitation and Correction

Financial Decisions, No. 1, Spring 2002

16 Pages Posted: 10 Sep 2011

See all articles by Ronnie Clayton

Ronnie Clayton

Jacksonville State University (Florida)

William Scroggins

Jacksonville State University (Florida)

Christopher Westley

Florida Gulf Coast University

Date Written: September 9, 2011

Abstract

This paper chronicles the rise and fall of Enron, Inc., the once powerful energy firm based in Houston, Texas. The history of the firm is reviewed, the November 2001 financial restatement is examined to show the impact of the failure to report the appropriate financial position for the firm, and reasons for the firm’s downfall are considered. While Enron’s decline may currently be considered a market failure, it is likely that the events surrounding the firm in 2001 will ultimately be considered a case in which the market worked to ferret out deception and poor judgment on the part of Enron’s management.

Keywords: Economic History, Enron, Capture Theory, Regulation

JEL Classification: G28

Suggested Citation

Clayton, Ronnie and Scroggins, William and Westley, Christopher, Enron: Market Exploitation and Correction (September 9, 2011). Financial Decisions, No. 1, Spring 2002. Available at SSRN: https://ssrn.com/abstract=1925145

Ronnie Clayton

Jacksonville State University (Florida) ( email )

11901 Beach Blvd.
Jacksonville, FL 32246
United States

William Scroggins

Jacksonville State University (Florida) ( email )

11901 Beach Blvd.
Jacksonville, FL 32246
United States

Christopher Westley (Contact Author)

Florida Gulf Coast University ( email )

Ft. Myers, FL 33965-6565
United States

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