WI: Enron did not collapse

[GrandMaster]

As you may or may not know, Enron was an energy company who maintained the image of a profitable company through financial deception, which collapsed shortly after 9/11. If this deception did not occur, Enron would likely still exist today. So, what would this honest Enron be like in 2021, and how would it react to world trends (such as the Great Recession)?

 

[Puzzle]

Would we know about them without the financial adventures? I only know the name of power companies I’ve paid each month, but I’m sure there’s like fifty or sixty more that do their same necessary yet boring jobs. Power companies shouldn’t make the news.

 

[Electric Monk]

Lol Enron spent like a decade cheating. If they don’t they are just a minor company.

However they did inspire huge changes in accounting—hilarious given Hollywood and Wall St’s massive cheating—so that’s the more interesting vector. If Enron isn’t the inspiration for legal changes it’s plausible multiple companies could do way worse things…

 

[Bob in Pittsburgh]

However they did inspire huge changes in accounting—hilarious given Hollywood and Wall St’s massive cheating—so that’s the more interesting vector. If Enron isn’t the inspiration for legal changes it’s plausible multiple companies could do way worse things

Not really.

1. There was no problem obtaining convictions and guilty pleas against Enron executives under then existing law.
2. The Sarbanes Oxley Act got a lot of favorable press but did not result in meaningful corporate change.
3. One major culprit was the Securities and Exchange Commission that has not reviewed any Enron filings for 5 years. They also specifically allowed the mark to market accounting that Enron used to disguise their losses.
4. Congress, especially Oxley, said the problem was that the SEC was underfunded. The real problem was their priorities including something called "Plain English" which directed companies to describe themselves as "we" instead of "the Company" or the company name.

 

[GeographyDude]

However they did inspire huge changes in accounting— . .

I’ve read that regulators felt they had gone too far and swung back the other way.

In particular, Arthur Andersen accounting went bankrupt as part of the carnage. This was viewed as a failure on the part of regulators. And in truth, going from the Big Five acccounting firms to the Big Four was no great success.

I’ve read that regulators then didn’t want to drive companies bankrupt and pulled back somewhat, or in some ways, and used “deferred prosecution” agreements and the like. And therefore, this reaction (overreaction?) to the Arthur Andersen bankruptcy might of removed some of the speed bumps on the way to the 2008 near-meltdown of financial institutions.

I guess my question is, how much of a difference did this make?