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In just 15 years Enron grew from nowhere to be Americas seventh largest company employing 21000 staff in more than 40 countries But the firms success turned out to have involved an elaborate scam Enron had lied about profits and stands accused of a range of shady dealings including concealing debts so they didnt show up in the companys accounts A chorus of outraged investors employees pension holders and politicians are demanding to know why Enrons failings were not spotted earlier Enron is a new-economy company which was a market maker for energy trading It ranked as the most innovative company in America four years in a row as judged by envious corporate peers in the annual Fortune magazine poll When Enron got started natural gas and electricity were produced transmitted and sold by state-regulated monopolies They were often inefficient Enron used Wall Street magic to transform energy supplies into financial instruments that could be traded online like stocks and bonds These contracts guaranteed customers a steady supply at a predictable price By bringing the laws of supply and demand into the energy system it provided a new way of doing business for energy customers Problems started when Enron figured if it could trade energy it could trade anything anywhere in the new virtual marketplace Newsprint Television advertising time Insurance risk High-speed data transmission All of these were converted into contracts called derivatives that were sold to investors Enron poured billions into these trading ventures and some failed The Timess Kurt Eichenwald uncovered some of Enrons failures and how they created hiding places for it To keep its mystique alive and its stock price growing it set up partnerships where it could bury its losses or generate imaginary revenues Heres one of the more audacious examples pieced together by The Wall Street Journal Enron invested a bunch of money in a joint venture with Blockbuster to rent out movies online The deal
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