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.
property or another valuable item that is possessed by someone.
unable to pay debts.
to reduce or go down in number.
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.
to form or officially organize.
person with a high amount of authority and power in a company or business.
having to do with money.
lie, trick, or misrepresentation played to gain goods and services.
insider trading Noun
illegal buying and selling of stocks based on secret information.
buildings that house convicted criminals and people accused of a crime and awaiting trial.
publicly damaging or shameful circumstance or situation.
part-owner of a company.
share in a company or business.