Notes On A Scandal: Can Enron Happen Again?
It’s no secret that Enron’s 2001 accounting fraud triggered a massive meltdown on Wall Street and strict controls soon followed. As a result are investors sadder but wiser? Or can Enron happen again? The issue was debated on “Street Signs.”
Jonathan Macey is the Sam Harris Professor of Corporate and Securities Law at Yale Law School. He says we’re talking about this issue because an article was published in last week’s New Yorker magazine based on his research. Basically--it said more disclosure about Enron's somewhat "dubious" business methods--would not have made a difference.
Joe Nocera is a New York Times columnist said, "I think that’s baloney. More disclosure would have made a huge difference if you disclosed the facts that would have unveiled the fraud.”
Macey countered: “Show me the 10K – show me the quarterly report from Enron that had the actual fraud.. the actual lie. I think the idea is yes they were bad, but there’s a lot of blame to go around.”