I believe that Ken Lay had an appeal pending at the time of his death. For this reason I think that he was considered to be not guilty. I remember when Enron was based in Omaha. The locals had a fit when Ken moved headquarters to Texas.Fiascoist wrote: ↑Sun Mar 28, 2021 7:55 am Ken Lay was convicted, but died before sentencing. There were others such as Andrew Fastow, Rick Causey and Michael Kopper, who did prison time. Lots of appeals out of this mess, which, of course, continued the saga for years. Inn the end, it is amazing how long a corporation can be used as a personal piggy bank by SOmany people before there are any consequences.
New York State Investigations of Trump and Related
- zekeb
- Posts: 1098
- Joined: Mon Feb 22, 2021 1:12 pm
- Location: Strawberry Hill
- Occupation: Stable genius. One who tosses horseshit with a pitchfork and never misses the spreader.
- Verified: ✅Of course
Re: New York State Investigations of Trump and Related
Largo al factotum.
Re: New York State Investigations of Trump and Related
Arthur Anderson, a major accounting firm was another causality of that mess.
I had friends who were CPAs there.
One day they had a nice job, working at a prestigious company, the next day, they were scrambling around the office looking for empty cardboard boxes to take their personal stuff home. (The entire staff was let go at once)
I had friends who were CPAs there.
One day they had a nice job, working at a prestigious company, the next day, they were scrambling around the office looking for empty cardboard boxes to take their personal stuff home. (The entire staff was let go at once)
Re: New York State Investigations of Trump and Related
The federal government indicted the accounting firm, not just individual accountants. The indictment functioned as a death penalty because it eliminated the CPA firm’s ability to do audit work. The DOJ knew this would happen.Chilidog wrote: ↑Sun Mar 28, 2021 8:27 am Arthur Anderson, a major accounting firm was another causality of that mess.
I had friends who were CPAs there.
One day they had a nice job, working at a prestigious company, the next day, they were scrambling around the office looking for empty cardboard boxes to take their personal stuff home. (The entire staff was let go at once)
Re: New York State Investigations of Trump and Related
When someone dies before a conviction is final (i.e., exhausted all appeals), the conviction is said to have ‘abated’ and the case is dismissed. From a legal standpoint, it is not like Lay was acquitted; it is more like he was never charged.
Re: New York State Investigations of Trump and Related
Yeah. The couple I knew that worked there were mid level accounting staff. The shenanigans were above their pay grade. They had a rough year afterwards but came out OK in the end.jcolvin2 wrote: ↑Sun Mar 28, 2021 11:14 amThe federal government indicted the accounting firm, not just individual accountants. The indictment functioned as a death penalty because it eliminated the CPA firm’s ability to do audit work. The DOJ knew this would happen.Chilidog wrote: ↑Sun Mar 28, 2021 8:27 am Arthur Anderson, a major accounting firm was another causality of that mess.
I had friends who were CPAs there.
One day they had a nice job, working at a prestigious company, the next day, they were scrambling around the office looking for empty cardboard boxes to take their personal stuff home. (The entire staff was let go at once)
- pipistrelle
- Posts: 7865
- Joined: Mon Feb 22, 2021 11:27 am
Re: New York State Investigations of Trump and Related
A friend was angry about the wrongdoing and glad the firm dissolved. I suggested he remember that there were thousands of staffers who had nothing to do with any of it who were suddenly unemployed for no fault of theirs. It's easy to forget that human element and to sweep a broad brush of blame.Chilidog wrote: ↑Sun Mar 28, 2021 8:27 am Arthur Anderson, a major accounting firm was another causality of that mess.
I had friends who were CPAs there.
One day they had a nice job, working at a prestigious company, the next day, they were scrambling around the office looking for empty cardboard boxes to take their personal stuff home. (The entire staff was let go at once)
- noblepa
- Posts: 2604
- Joined: Mon Feb 22, 2021 2:55 pm
- Location: Bay Village, Ohio
- Occupation: Retired IT Nerd
Re: New York State Investigations of Trump and Related
When the Enron/Arthur Anderson affair happened, I was working for Ernst & Whinney, a competitor of AA.
AA's problem stemmed from the fact that they signed off on the audit of Enron, a publicly traded company.
The AICPA's official position on audits is that the auditor (in this case AA) is not required to root out fraud. They do have an ethical responsibility to report fraud, if they find it. The financial statements that are published in a company's annual report and reported to the SEC, and which are signed off on by the auditors, are prepared by the company management, not the auditors. The auditors simply certify that the reports conform to "Generally Accepted Accounting Principles".
I believe that what got Enron caught was actually something that is (or at least was) perfectly legal. If a company has large, long term debts, they can pledge assets to pay those debts and then take both the liability and the asset off of the books. Enron pledged Enron stock to cover some very large debts. The problem was that Enron stock dropped in value significantly, to the point that the stock was no longer worth enough to cover the debts. Suddenly those debts re-appeared on the company's balance sheets. That got investigators looking, and they found the shenanigans of manipulating energy prices that ultimately got them convicted.
As I understand it, AA really did nothing wrong. They were not complicit in the fraud. They just failed to uncover it. Ken Lay, et al were good at covering their tracks until everything started going south. AA could not survive the hit to their reputation and folded.
AA's consulting practice had previously become the semi-autonomous Anderson Consulting. That organization survived, and they are still around today.
AA's problem stemmed from the fact that they signed off on the audit of Enron, a publicly traded company.
The AICPA's official position on audits is that the auditor (in this case AA) is not required to root out fraud. They do have an ethical responsibility to report fraud, if they find it. The financial statements that are published in a company's annual report and reported to the SEC, and which are signed off on by the auditors, are prepared by the company management, not the auditors. The auditors simply certify that the reports conform to "Generally Accepted Accounting Principles".
I believe that what got Enron caught was actually something that is (or at least was) perfectly legal. If a company has large, long term debts, they can pledge assets to pay those debts and then take both the liability and the asset off of the books. Enron pledged Enron stock to cover some very large debts. The problem was that Enron stock dropped in value significantly, to the point that the stock was no longer worth enough to cover the debts. Suddenly those debts re-appeared on the company's balance sheets. That got investigators looking, and they found the shenanigans of manipulating energy prices that ultimately got them convicted.
As I understand it, AA really did nothing wrong. They were not complicit in the fraud. They just failed to uncover it. Ken Lay, et al were good at covering their tracks until everything started going south. AA could not survive the hit to their reputation and folded.
AA's consulting practice had previously become the semi-autonomous Anderson Consulting. That organization survived, and they are still around today.
- Gregg
- Posts: 5502
- Joined: Tue Feb 23, 2021 1:54 am
- Location: Cincinnati, Gettysburg
- Occupation: We build cars
Re: New York State Investigations of Trump and Related
Skilling went to jail, Lay died while appealing, Fastow went to jail (I have always believed that he misled everyone and is the chief villian of the whole thing) and Causey went to jail.
Enron was a very special interest of mine for a time.
I agree, they could have filled another bus full people, but there are some that I can't say they broke the law, but they basically gamed the numbers and built a "legend" about themselves in the company built largely on lies and the infamous "series of accounting scandals". Among these, the first one that comes to mind is Rebecca Mark, who never built a business that made a dime of legitimate profit and never missed a chance to claim credit for someone else's work. My other unlikable person is Sherron Watkins who knew all about the funny accounting and kept her mouth shut until she saw it was inevitable it was coming out, when Cliff Baxter shot himself. Lou Pai probably did something illegal but better people than me have yet to find out what, regardless, he bailed before the scandal to own about half of Colorado and had a fight with an Indian nation over water rights on a mountain they had been drawing for a thousand years until he put up a fence.
Supreme Commander, Imperial Illuminati Air Force
You don't have to consent, but I'm gonna tase you anyway.
You don't have to consent, but I'm gonna tase you anyway.
- Gregg
- Posts: 5502
- Joined: Tue Feb 23, 2021 1:54 am
- Location: Cincinnati, Gettysburg
- Occupation: We build cars
Re: New York State Investigations of Trump and Related
Lou Pai gets extra credit for extreme creative use of the "Hookers and Blow" fund because he actually turned in expense reports that listed hookers and blow.
Supreme Commander, Imperial Illuminati Air Force
You don't have to consent, but I'm gonna tase you anyway.
You don't have to consent, but I'm gonna tase you anyway.
- Frater I*I
- Posts: 3566
- Joined: Mon Feb 22, 2021 10:52 am
- Location: City of Dis, Seventh Circle of Hell
- Occupation: Certificated A&P Mechanic
- Verified: ✅Verified Devilish Hyena
- Contact:
Re: New York State Investigations of Trump and Related
Well, at least he was honest
"He sewed his eyes shut because he is afraid to see, He tries to tell me what I put inside of me
He's got the answers to ease my curiosity, He dreamed a god up and called it Christianity"
Trent Reznor
He's got the answers to ease my curiosity, He dreamed a god up and called it Christianity"
Trent Reznor
- Phoenix520
- Posts: 4151
- Joined: Mon Feb 22, 2021 1:20 pm
- Verified: ✅
Re: New York State Investigations of Trump and Related
AA saved my brother from the Loma Prieta earthquake. He’d just graduated with a degree in accounting, from UCSF, working for AA. An auditor working in Stockton called in sick so they send my bro for two days. If he hadn’t been out of town he’d have been on the Embarcadero Fwy in rush hour traffic when it hit.
That was his wake up call. He didn’t want to die accounting.
The very next day he quite AA, enrolled in a sound engineering course and went to work at Skywalker Ranch, instead.
That was his wake up call. He didn’t want to die accounting.
The very next day he quite AA, enrolled in a sound engineering course and went to work at Skywalker Ranch, instead.
Re: New York State Investigations of Trump and Related
"Assets" is doing a lot of work there.
Knock me over with a feather, who could have anticipated that?Enron pledged Enron stock to cover some very large debts. The problem was that Enron stock dropped in value significantly ...
Disclaimers: (i) I'm not an accountant; (ii) although I once did some deep dives into the Enron/AA scandal, that was nearly two decades ago; (iii) it's been nearly as long since I've had to do any thinking at all about accounting issues.As I understand it, AA really did nothing wrong.
That said, it's my recollection that it was only possible to say that Arthur Andersen did nothing wrong by accepting a smog of limitations, disclaimers and assumptions so dense, intricate, and unrealistic as to render its opinions useless for any purpose other than as a screen for fraud. It's as if an impressive-looking structural engineer's report require minute study to reveal that it had disclaimed any opinion about the safety of a building's major structural members.
I also recall an accounting professor friend calling AA's work indefensible in ways that astonished him.
As for the thousands of innocent professionals and staff, sure, it's extremely unfortunate, but how do you protect them in a way that doesn't render the professional role of an accounting firm illusory?
There doubtless are subtleties I've forgotten or that are outside the realm of my understanding, but that's the big picture as I remember it.
- northland10
- Posts: 6517
- Joined: Mon Feb 22, 2021 6:47 pm
- Location: Northeast Illinois
- Occupation: Organist/Choir Director/Fundraising Data Analyst
- Verified: ✅ I'm me.
Re: New York State Investigations of Trump and Related
Disclaimer: I also am not an accountant, I have never played on on TV, and I would never want to be one. Just ignore the fact that I spent a bunch of last week in GL data of the test environment for our new ERP. That was to understand the structure and be able to identify the differences between Finance and Fundraising (and I will not waste tie explaining them here).chancery wrote: ↑Sun Mar 28, 2021 1:43 pmDisclaimers: (i) I'm not an accountant; (ii) although I once did some deep dives into the Enron/AA scandal, that was nearly two decades ago; (iii) it's been nearly as long since I've had to do any thinking at all about accounting issues.
That said, it's my recollection that it was only possible to say that Arthur Andersen did nothing wrong by accepting a smog of limitations, disclaimers and assumptions so dense, intricate, and unrealistic as to render its opinions useless for any purpose other than as a screen for fraud. It's as if an impressive-looking structural engineer's report require minute study to reveal that it had disclaimed any opinion about the safety of a building's major structural members.
I also recall an accounting professor friend calling AA's work indefensible in ways that astonished him.
As for the thousands of innocent professionals and staff, sure, it's extremely unfortunate, but how do you protect them in a way that doesn't render the professional role of an accounting firm illusory?
I highly suspect AA failed to do their job properly, despite SCOTUS reversal of the conviction for destroying records. Even if they were clean in Enron, they were fined for poor audit practices in regards to Waste Management and Sunbeam, and probably would have been hit for Worldcom had AA not already imploded. Fool me once.
I feel for the thousands of innocent professionals and staff hurt by this, but thousands of staff are hurt by poor, reckless, and sometimes illegal management practices all of the time (Toys R' Us, Sears, WorldCom, Lehman, even Enron).
101010
- MN-Skeptic
- Posts: 3872
- Joined: Mon Feb 22, 2021 1:03 pm
- Location: Twin Cities
Re: New York State Investigations of Trump and Related
Off Topic
And Enron is the poster child for why you do not heavily invest in employer stock. A lot of Enron employees owned a lot of Enron stock in their 401(k)s so not only did they lose their jobs they also lost their retirement savings.
Tim Walz’ Golden Rule: Mind your own damn business!
Re: New York State Investigations of Trump and Related
During the rah rah days of Enron here in Houston I kept asking people who worked there what the company actually did.. It was always followed by obtuse monologues with lots of corporate speak. No one ever explained it to me. When I asked again what they actually did, invariably I was told if I couldn't understand I just wasn't very smart.
That's a boatload of red flags for any company.
God only knows what the folks at AA thought they were doing, but I'm guessing they had the same kind of dialogs, and just billed their hours and got paid.
That's a boatload of red flags for any company.
God only knows what the folks at AA thought they were doing, but I'm guessing they had the same kind of dialogs, and just billed their hours and got paid.
- fierceredpanda
- Posts: 590
- Joined: Mon Mar 01, 2021 12:11 pm
- Location: BAR Headquarters - Turn left at the portrait of George III
- Occupation: Criminal defense attorney. I am not your lawyer. My posts != legal advice.
Re: New York State Investigations of Trump and Related
MN-Skeptic wrote: ↑Sun Mar 28, 2021 2:22 pmOff TopicAnd Enron is the poster child for why you do not heavily invest in employer stock. A lot of Enron employees owned a lot of Enron stock in their 401(k)s so not only did they lose their jobs they also lost their retirement savings.
Off Topic
They were being told to do that by the company's executives. The top echelon people obsessed over the stock price, even though most of them didn't know that Andy Fastow's machinations essentially meant that the company had bet its existence that it's price would never go down. There are videos readily available from corporate meetings where executives specifically tell their employees to put 100% of their 401(k) in Enron stock.
I suggest reading the book The Smartest Guys in the Room or watching the terrific documentary film of the same title. Bethany McLean (one of the authors) is simply fantastic at telling stories of corporate malfeasance in a way that laypeople can understand.
I suggest reading the book The Smartest Guys in the Room or watching the terrific documentary film of the same title. Bethany McLean (one of the authors) is simply fantastic at telling stories of corporate malfeasance in a way that laypeople can understand.
"There's no play here. There's no angle. There's no champagne room. I'm not a miracle worker, I'm a janitor. The math on this is simple. The smaller the mess, the easier it is for me to clean up." -Michael Clayton
Re: New York State Investigations of Trump and Related
Wow! What a cool story. I am so glad for you and your brother that he was called away. And how inspiring to hear about his career change - taking his happiness and personal fulfillment into his own hands and making a brave decision to leave a job that was already in hand for the unknown. Thanks for sharing that!Kate520 wrote: ↑Sun Mar 28, 2021 1:31 pm AA saved my brother from the Loma Prieta earthquake. He’d just graduated with a degree in accounting, from UCSF, working for AA. An auditor working in Stockton called in sick so they send my bro for two days. If he hadn’t been out of town he’d have been on the Embarcadero Fwy in rush hour traffic when it hit.
That was his wake up call. He didn’t want to die accounting.
The very next day he quite AA, enrolled in a sound engineering course and went to work at Skywalker Ranch, instead.
"It actually doesn't take much to be considered a difficult woman. That's why there are so many of us."
--Jane Goodall
--Jane Goodall
- Gregg
- Posts: 5502
- Joined: Tue Feb 23, 2021 1:54 am
- Location: Cincinnati, Gettysburg
- Occupation: We build cars
Re: New York State Investigations of Trump and Related
When you talked to Enron people, you got a word salad loop of all the trendy phrases about creating synergies to generate ideas to create markets where risk could be valued and traded ad infinitum.filly wrote: ↑Sun Mar 28, 2021 3:04 pm During the rah rah days of Enron here in Houston I kept asking people who worked there what the company actually did.. It was always followed by obtuse monologues with lots of corporate speak. No one ever explained it to me. When I asked again what they actually did, invariably I was told if I couldn't understand I just wasn't very smart.
That's a boatload of red flags for any company.
God only knows what the folks at AA thought they were doing, but I'm guessing they had the same kind of dialogs, and just billed their hours and got paid.
Every time one of the geniuses I work with try to either explain Bitcoin to me or get me to trade it I remember Enron. Sure, you trade it, you bet on it going up and down. How do you evaluate WHY it goes up or down? What economic contribution does its underlying base make? Further, those "Etoro" commercials where the smug technical analysis quant guy doesn't do any better than the hippie stoner who researches D&D levels because the hippie can see the math major and just mimics his trades are gonna be the reason I grab a real brick instead of the nerf balls and kill my beautiful 80 in TV. That, kids, is the modern day doorman telling Joe Kennedy he has a stock tip moment to say you need to sell it all.
I better quit....
Supreme Commander, Imperial Illuminati Air Force
You don't have to consent, but I'm gonna tase you anyway.
You don't have to consent, but I'm gonna tase you anyway.
- Gregg
- Posts: 5502
- Joined: Tue Feb 23, 2021 1:54 am
- Location: Cincinnati, Gettysburg
- Occupation: We build cars
Re: New York State Investigations of Trump and Related
fierceredpanda wrote: ↑Sun Mar 28, 2021 3:55 pmMN-Skeptic wrote: ↑Sun Mar 28, 2021 2:22 pmOff TopicAnd Enron is the poster child for why you do not heavily invest in employer stock. A lot of Enron employees owned a lot of Enron stock in their 401(k)s so not only did they lose their jobs they also lost their retirement savings.Off TopicThey were being told to do that by the company's executives. The top echelon people obsessed over the stock price, even though most of them didn't know that Andy Fastow's machinations essentially meant that the company had bet its existence that it's price would never go down. There are videos readily available from corporate meetings where executives specifically tell their employees to put 100% of their 401(k) in Enron stock.
I suggest reading the book The Smartest Guys in the Room or watching the terrific documentary film of the same title. Bethany McLean (one of the authors) is simply fantastic at telling stories of corporate malfeasance in a way that laypeople can understand.
The Smartest Guys in the Room
Best book of many about Enron. Bethany McLean is now reporting on the gamestop and memestock thing. I don't remember what network I saw her on but good as always.
Supreme Commander, Imperial Illuminati Air Force
You don't have to consent, but I'm gonna tase you anyway.
You don't have to consent, but I'm gonna tase you anyway.
- northland10
- Posts: 6517
- Joined: Mon Feb 22, 2021 6:47 pm
- Location: Northeast Illinois
- Occupation: Organist/Choir Director/Fundraising Data Analyst
- Verified: ✅ I'm me.
Re: New York State Investigations of Trump and Related
You broke my buzzword meter.
Fabulized Phrases to Maximize Value, aka, Making shit up to artificially boost stock value.
101010
- keith
- Posts: 4343
- Joined: Mon Feb 22, 2021 10:23 pm
- Location: The Swamp in Victorian Oz
- Occupation: Retired Computer Systems Analyst Project Manager Super Coder
- Verified: ✅lunatic
Re: New York State Investigations of Trump and Related
I absolutly believe that is what on in the AA IT Consultancy practice hereafter known as 'Androids'. I worked on several projects where they were the main contractor. Their best skill appeared to be alienating the non contracting staff and getting them to actively fight the project. One of these projects ended in a rather messy $300+million lawsuit - and accelerated the practice being renamed 'Accenture' (but we all knew it was the same ol' Androids.
Be assured that a walk through the ocean of most souls Would scarcely get your feet wet
- Gregg
- Posts: 5502
- Joined: Tue Feb 23, 2021 1:54 am
- Location: Cincinnati, Gettysburg
- Occupation: We build cars
Re: New York State Investigations of Trump and Related
I once came damn near feeding a McKinsey consultant into a machine for cutting metal, just to see if the arrogant little prick would tell me how he could have done it better.keith wrote: ↑Tue Mar 30, 2021 7:10 pmI absolutly believe that is what on in the AA IT Consultancy practice hereafter known as 'Androids'. I worked on several projects where they were the main contractor. Their best skill appeared to be alienating the non contracting staff and getting them to actively fight the project. One of these projects ended in a rather messy $300+million lawsuit - and accelerated the practice being renamed 'Accenture' (but we all knew it was the same ol' Androids.
I've found that upper management types, especially those that haven't spent 20 or 30 years to get where they are but got hired as part of the new wave when they make changes at the top, love to bring in consultants who don't know anything about the actual business, to teach them about the business they are supposed to be running. These "experts" come in and try to teach those of us who have been building cars since they were 6 how to build cars.
I've had a smug little asshole tell me he had an MBA so he knew how to run any business (I think someone told him I had an MBA too, and I wasn't impressed). They look at you working in a factory and automatically think you have some defect and that's why you're not somewhere air conditioned with a view.
Supreme Commander, Imperial Illuminati Air Force
You don't have to consent, but I'm gonna tase you anyway.
You don't have to consent, but I'm gonna tase you anyway.
Re: New York State Investigations of Trump and Related
Off Topic
My first job as an engineer was in Manufacturing.
After about 3 months on the job, I was writing up an Engineering Change Order to a process sheet, dealing with the installation of the CRT high-voltage lead in a computer terminal. I went out on the line, with the permission of the line supervisor, to ask the assemblers what they thought about my changes - and got good feedback.
Two days later I get called into the office of an engineering manager and had a new orifice installed.. "you're an engineer, you're supposed to be smarter than an assembler!"
Marched right over to the Plant Manager's office, told his admin assistant what happened, "Oh, dear. I think Joe can see you right now!"
That engineering manager got a formal reprimand.
"everyone brings something to the table" are words I've lived by. They have never let me down.
After about 3 months on the job, I was writing up an Engineering Change Order to a process sheet, dealing with the installation of the CRT high-voltage lead in a computer terminal. I went out on the line, with the permission of the line supervisor, to ask the assemblers what they thought about my changes - and got good feedback.
Two days later I get called into the office of an engineering manager and had a new orifice installed.. "you're an engineer, you're supposed to be smarter than an assembler!"
Marched right over to the Plant Manager's office, told his admin assistant what happened, "Oh, dear. I think Joe can see you right now!"
That engineering manager got a formal reprimand.
"everyone brings something to the table" are words I've lived by. They have never let me down.
- keith
- Posts: 4343
- Joined: Mon Feb 22, 2021 10:23 pm
- Location: The Swamp in Victorian Oz
- Occupation: Retired Computer Systems Analyst Project Manager Super Coder
- Verified: ✅lunatic
Re: New York State Investigations of Trump and Related
An engineering manager is supposed to be smarter than the engineers he is managing.tek wrote: ↑Wed Mar 31, 2021 6:40 amOff TopicMy first job as an engineer was in Manufacturing.
After about 3 months on the job, I was writing up an Engineering Change Order to a process sheet, dealing with the installation of the CRT high-voltage lead in a computer terminal. I went out on the line, with the permission of the line supervisor, to ask the assemblers what they thought about my changes - and got good feedback.
Two days later I get called into the office of an engineering manager and had a new orifice installed.. "you're an engineer, you're supposed to be smarter than an assembler!"
Marched right over to the Plant Manager's office, told his admin assistant what happened, "Oh, dear. I think Joe can see you right now!"
That engineering manager got a formal reprimand.
"everyone brings something to the table" are words I've lived by. They have never let me down.
Be assured that a walk through the ocean of most souls Would scarcely get your feet wet
-
- Posts: 2235
- Joined: Mon Feb 22, 2021 1:13 pm
- Location: England
Re: New York State Investigations of Trump and Related
I had a few interactions with Anderson Consulting, and later Accenture, suits a long time ago. Their ability to recognise how far they could exploit the lack of business knowledge of those holding the purse strings was impressive. There may have been one “successful” project that produced a feasibility study that was quietly binned. The only discernible difference between the two companies was that Accenture seemed more likely to ensure their teams included an attractive female.
If you can't lie to yourself, who can you lie to?