Corporate Fraud

Evern seen the film The Smartest Guys in the Room? The story details the amazing rise and fall of energy giant Enron. The company’s epic collapse helped create new accounting standards, and led to the passage of the Sarbanes-Oxley Act of 2002.

What fueled the downfall?

Just a lil' bit o' corporate fraud.

Corporate fraud is a broad term that defines illegal or dishonest activities meant to benefit certain individuals, or the company at large. Enron engaged in accounting fraud, a scheme that cost its investors $74 billion, bankrupted the firm, and led to extensive job and retirement pension losses for the company's employees. Executives like CEO Jeff Skilling pocketed millions of dollars from off-balance-sheet schemes and reported inflated profits.

Skilling received 18 years in prison for his crimes. So now he's the smartest guy in his cell.