ABSTRACT
Enron’s fiscal 2000 revenues ranked seventh among US companies. When the stock price peaked at $90 in August 2000, Enron’s market capitalization approached $80 billion. Skilling joined Enron as a full-time employee in 1990. Ten years later, Enron was an entirely different company. Enron was also an innovator in electronic commerce. In October 1999, Enron launched Enron Online, an Internet-based marketplace through which traders could buy and sell commodities such as paper, plastics, and metals. Mark-to-market accounting works well in situations where market prices are readily observable. But there was no established market for many of the contracts Enron entered into. Enron was Arthur Andersen’s second largest client at the turn of the twenty-first century. Andersen’s Houston office billed Enron $52 million in 2000—$25 million for auditing Enron’s financial statements plus $27 million for nonaudit services. Fortune magazine named Enron America’s “most innovative” company six years in a row.
