Legal and Privacy Issues in Information Security, 3rd Edition

The Enron Scandal and Securities-Law Reform

Enron. WorldCom. Tyco. Adelphia. These companies have come to represent a wave of corporate scandal that plagued America in the early 2000s. Each company engaged in varying levels of mismanagement, questionable financial deals, and accounting fraud. The activities at these companies shook investor confidence in U.S. corporations. They also tarnished the reputations of financial services professionals such as analysts, accountants, and auditors. Consider the following:

• Once called the “Most Innovative Company in America,” energy company Enron filed for bankruptcy in December 2001. It used several different fraudulent accounting methods to hide billions of dollars of debt from its investors and lenders. ...