Inside Information: The Enron scandal in 2001

In the United States, it is illegal to use insider information. Insider information is stock related information and there are many ways to get huge and unusual revenue in the stock market. The general way to collect insider information is from the company's direct employees. Information on shares may be illegal or legal. This is not illegal if the information is open to all current or future investors. Illegal information becomes illegal if illegal information is privatized from the public and used only by stock market investors.

The Enron scandal was announced in October 2001 and eventually leads to bankruptcy of American energy company Enron based in Houston, Texas, and indeed Andersen, one of the top five largest partners in auditing and accounting, It broke up. . It is the world. At that time, in addition to being the biggest bankruptcy restructuring in the history of the United States, Enron was regarded as the largest audit failure. Enron was founded in 1985 by Kenneth Lay after the merger of Houston Gas and InterNorth. A few years later, when Jeffrey Skilling was hired, he hid billions of dollars of debt from failed transactions and projects using accounting vulnerabilities, special purpose entities, and poor financial reports We have developed a series of executable executives. Chief Financial Officer Andrew Fastow and other executives not only misunderstood Enron 's Board of Directors and Audit Committee on high risk accounting practices, but also pressured Arthur Andersen to ignore them.

In the Enron case, Enron (trading of natural gas and electricity) and its accounting firm Arthur Andersen (published at the end of 2001) were involved in fiscal scandal. Enron entered bankruptcy of Enron in November 2001 after a series of disclosure on informal accounting treatment was done through the 1990s. Enron filed bankruptcy on December 2, 2001. As the scandal approached, Enron's stock price fell from less than 50 cents to 50 dollars. Enron's plunge occurred after most revenue and revenue disclosures were the result of a transaction with a special purpose entity (the limited partnership it controls). As a result, many of the debts of Enron and the losses they incurred were not reported in the financial statements. In addition, the scandal caused confusion