The Enron Scandal

The Enron scandal involved the energy company Enron using deceptive accounting practices to hide debt and inflate profits, misleading investors and regulators about its financial health. Executives engaged in complex transactions and off-balance-sheet entities to conceal financial problems, leading to an illusion of profitability and stability. When the truth emerged in 2001, Enron’s stock plummeted, and the company filed for bankruptcy, causing significant financial losses for shareholders, employees, and pensioners. The scandal highlighted the importance of transparency and led to regulatory reforms aimed at preventing similar misconduct.