A Year After Enron, What's Changed?
Nov. 27 -- It was just one year ago that Enron, a once high-flying Houston-based energy colossus, became a household word for massive corporate failure.
Thanksgiving Day marks the one-year anniversary of the day that Enron's credit rating was downgraded to junk bond status, prompting rival energy producer Dynegy to back out of its proposed merger with the company. Panicked investors sent Enron's share price below $1, and the company filed for Chapter 11 bankruptcy just four days later.
Enron's downfall stemmed from multi-million dollar losses the company reported in October 2001, partly related to off-balance sheet partnerships run by former Chief Financial Officer Andrew Fastow.
The company's demise was not only notable for the well-publicized financial damage its workers and investors suffered, but also because it was the first in a long line of corporate scandals from companies like WorldCom, Adelphia, Global Crossing and Tyco that have rocked U.S. financial markets and investor confidence in the past year.
So one year and countless corporate scandals after Enron, can corporate America be trusted again? While experts say that government and financial institutions have made steps in the right direction, others say there is still much to be done before restoring investor trust.
"Just the fact that there is more awareness in every sector about issues of corporate responsibility and accountability is a good thing," said Mike Lux, president of American Family Voices, a Washington, D.C.-based advocacy group for low- and middle-income families. "Having said those happy things, we still have an enormous way to go."
Pricey Toll on American Workers
To be sure, corporate scandals have taken a heavy financial toll on the American public.
Labor union AFL-CIO estimates that workers have lost $1.5 trillion from their retirement savings funds since January of 2002.
Further, thousands and thousands of workers have lost their jobs. Some 4,000 Enron employees were let go after the company declared bankruptcy. The AFL-CIO estimates that 28,500 workers have lost their jobs from Enron, WorldCom and accounting firm Arthur Andersen alone.
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