Product Description

An easy answer guide to the difficult questions surrounding Enron
What Went Wrong at Enron explains the critical steps, transactions, and events that led to the demise of a company that was once considered one of the most innovative corporations in the United States. Energy risk management expert Peter Fusaro gets inside Enron and provides a coherent account of the who, why, where, and when of this corporate debacle, without sacrificing the complexity of what has happened. Enron has been front-page news for months, but confusion still remains about what actually happened. What Went Wrong at Enron is written for readers who find themselves wondering what exactly is an energy trading company, what was the sequence of events that caused the largest corporate bankruptcy in U.S. history, and what does this all mean for me.

Product Details

• Amazon Sales Rank: #270719 in Books
• Published on: 2002-06-24
• Original language: English
• Binding: Paperback
• 256 pages

Review
"...first book to address the difficult questions surrounding Enron..." (Lloyd's List, 5 July 2002)

"Here come the Enron books...The best offering...is What Went Wrong at Enron." (The New York Times, Sunday, July 28, 2002)

"...a new book on the Enron debacle..." (The Sunday Business Post, 28 July 2002)

"...the gripping drama de jour..." (Business Eye, 1 August 2002)

"...the book chronicles the deception, back stabbing and eventual whistle-blowing that toppled the Houston-based company..." (Moneywise, September 2002)

"...the end result is quite gripping...it gave out information without even trying and it readily soaked into the consciousness..." (M2 Best Books, 15 August 2002)

"...ideal reading for a train journey or flight..." (Mortgage Finance Gazette, October 2002)

"...compelling and very clearly written book draws the right lessons from the Enron debacle" (Christopher Faille, HedgeWorld)

"...Fusaro and miller have provided an excellent primer to whet our appetites for the scurrilous revelations to come..." (Times Higher Educational Supplement, 22 November 2002)

"...a fascinating, highly readable blow-by-blow account of what led to a company?s dramatic collapse..." (IEE Review, Janauary 2003)

"...a truly fascinating read." (Financial Adviser, 26 September 2002)

Review
"Do not put another dime into the stock market before reading this book. In all the millions of words that have been written about the Enron scandal, these are the first that really explain, in a way anyone can understand, what actually happened in the greatest stock swindle of modern times. You'll learn what Enron's business really consisted of, how the accounting for it really worked, and who the key executives really were? in particular chairman Kenneth Lay, the proselytizing son of a Missouri preacher, and Lay's prot?g?, Jeffrey Skilling, who earned the nickname of Darth Vader for his ruthless behavior. You'll follow Enron's forays into everything from the Internet to the California energy market, learning how Skilling and Lay influenced Wall Street analysts to say only favorable things about the company, and what happened to the analysts who didn't oblige. And you'll behold the inevitable doom that eventually comes to shareholders who believe that rising stock prices are proof of increasing value. In the end they may be proof of nothing more than what the world has now come to know as "Enronitis." This is the book that explains what that word really means." —Christopher Byron, author, Martha Inc.

"The Enron story, for most of us, is a monster. Fusaro and Miller clarify what went wrong in a manner that allows anyone to get their arms around the beast quickly, without killing oneself." —Bill Crawford, former Chicago Tribune financial writer and Pulitzer Prize winner

"The authors' sharp insights into Enron's self-destructive culture provide a clear road map into its massive failure." —Peter Behr, Washington Post financial writer

Book Info
The first comprehensive and clear explanation of what happened at Enron. Authors take you inside Enron and show you the who, why, what, where, and when of the sinking of this corporate Titanic. Softcover.

Customer Reviews

Thin
Let's start with the positives:
- the book is easy to read and reasonably well written;
- the basic facts of the story are covered;
- the book starts the story way back before the problems emerged so that you get a feel for what the business was up to.

But
- it is very short book for such a complex subject
- the "unravelling" - the investigations into "what went wrong" are (ironically) not well covered
- there is almost no coverage of the Andersen issues

So save your dollar, pound, euro or yen - don't waste it on this book.

A Shakespearean tragedy
What really went wrong at Enron?

A question that cannot be answered easily due to its nature of complexity. Thousands and hundreds investors, including Enron¡¦s employees who vested their retirement benefits in the s401k plan solely with Enron shares¡K..The horrible downfall alarmed the investment community, hurt the professional society (accountant, lawyer, underwriter etc.) and credibility of the monitoring commission¡K. The U.S. government reacted with the new legislation (Sabanes-Oxley Act) as an ¡§attempt¡¨ to tackle the problem, trying to put the company¡¦s management back on track to shoulder its fiduciary duty to the company¡¦s shareholder. But, does it work? The extent to which the various parties¡¦ responsibilities is still clouded.

If we do not really analyze the root causes which led to the Enron¡¦s downfall, we never know the answer. This book, written with the targeted general audience, is published at the right time to give the public a good chance to find the ashes in the smoke. At least for the moment.

According to this book, the tragedy was played by an arrogant CEO, greedy senior executive, loyal whistleblower, with the backdrop of a wrongly conceived free economy principle. The book is well written and gives insightful analyses based on the available evidence and traces. Some of the factors leading to the tragedy noted by the authors are:

*„X The use of SPE (Special Purpose Vehicles) in accounting to keep off the accounting profits as well as to hide the potential liabilities
*„X The constantly fearing environment built by the Corporate Culture emphasizing on a sense of urgency
*„X Over-extension of operations in the deregulated energy and telecommunication market
*„X Mark-to-market accounting principles
*„X Less than full company¡¦s disclosure tendency
*„X Valuation problem of customized contracts
* Making commitment as a counter-party to every trade in arbitrage markets
*„X Trading from natural gas to electricity to bandwidth to 1800 different products in the Enron online
*„X Conflicting company¡¦s strategy: asset-lite vs. debt heavy financed investments
*„X Manipulated earning estimated to meet expectations
*„X Deals financed by high Enron¡¦s stock price
*„X Excessive investment in optic fibre networks

The list could go on and on. In fact, Enron went to the extent that deals were made just for the sake of making them. The more you read about the book, the more you feel it is a Shakespearean tragedy ¡V things are certain to get worse with all of these interrelated factors playing on stage. The general audience, those who believed that the play had a good ending, bought the tickets but found that the play was ultimately turn out to be a tragic one. They suffered. However, the director said: ¡§You bought the tickets because you believed in the play had a good ending. I didn¡¦t say that it would end in that way.¡¨ Refund? No.

The investigation into Enron¡¦s alleged sham trading and potential fraud scheme is still in progress as of this writing¡K..I highly recommend the book to the general readers, although it is better if you are financially literate. It is a thought-provoking and interesting read, especially to the CPAs.

Lacks specifics, too many pointless analogies.
Enron's greed and financial scandals, along with the rise and fall, are interesting in itself. This book, though it does explain the fall and is easily readable, isn't intriguing enough to capture the reader's attention. In fact, more than half is a description of how Enron came to be and what there business model is. A chunk of the book is just photocopied evidence pasted in the appendix. Only a minute section describes the scandal and accounting frauds.

The author loves anologies. He devotes pages to baseball card trading, and then sort of compares it to Enron's business. While these analogies help with understanding the business model, it's often over-simplified with a glaring lack of details. What I found was a lack of hard numbers and statistics which meant I couldn't put the failings into perspective. Also, the first half of the book where he details Enron, he seems to be praising their business, then hand wavingly, he points to a few corrupted examples. It almost appears that the author thinks Enron would still be a powerhouse if it wasn't for a few specific incidents.

As a book, it gets the job done. It shows the errors of Enron in a way that any non financial person could understand. It does tend to oversimplify, and it's glaring lack of numbers and details hurt it in the end.