The floor of the New York Stock Exchange (NYSE) is usually filled with hundreds of traders using these kiosks to check the fluctuating share prices of hundreds of companies.
Photograph by Kevin Hutchinson, courtesy Wikimedia. This file is licensed under the Creative Commons Attribution 2.0 Generic license.

Download this file

  • On December 2, 2001, the giant energy trader Enron filed for bankruptcy. Although the company was based in Houston, Texas, it filed for bankruptcy in New York City, New York. Enron’s failure, which is also associated with the bankruptcy of the accounting firm Arthur Anderson, was the first financial scandal of the 21st century.
     
    Enron enjoyed enormous success when it was established in the 1980s. However, major declines in value were hidden from shareholders by poor financial reporting. In the days—and sometimes minutes—leading up to the bankruptcy, Enron executives sold their stock. Enron and Anderson were effectively put out of business, and some Enron executives were sentenced to years in prison for fraud and insider trading.
     
    Enron filed for Chapter 11 bankruptcy protection. Under this legal code, Enron was able to maintain control of most of its assets under the oversight of the bankruptcy court. In the end, Enron paid more than $7 billion to its shareholders (mostly the University of California system).
  • Term Part of Speech Definition Encyclopedic Entry
    account Noun

    oral or written description of events.

    asset Noun

    property or another valuable item that is possessed by someone.

    associate Verb

    to connect.

    bankrupt Adjective

    unable to pay debts.

    decline Verb

    to reduce or go down in number.

    effective Adjective

    useful or able to perform a task.

    energy trader Noun

    person who buys and sells units of electricity, usually for a public or private energy company.

    enormous Adjective

    very large.

    establish Verb

    to form or officially organize.

    executive Noun

    person with a high amount of authority and power in a company or business.

    financial Adjective

    having to do with money.

    fraud Noun

    lie, trick, or misrepresentation played to gain goods and services.

    insider trading Noun

    illegal buying and selling of stocks based on secret information.

    oversight Noun

    supervision.

    prison Noun

    buildings that house convicted criminals and people accused of a crime and awaiting trial.

    scandal Noun

    publicly damaging or shameful circumstance or situation.

    shareholder Noun

    part-owner of a company.

    stock Noun

    share in a company or business.