Who Killed Enron

The Enron fallout promises to be severe and far-reaching. With a criminal investigation underway, some of the Enron players face the prospect of spending time in the big house. The only question about Arthur Andersen is how much the partners will have to pay to settle this mess, and whether the company can survive as an independent entity. The accounting profession is wishing it were once again faceless and colorless, instead of being in the harsh spotlight. Financial conglomerates like JP Morgan Chase and Citigroup are going to be scrutinized over their multiple and often conflicting roles at Enron: lenders, trading partners, investors, advisers, investment bankers.

Small investors, understandably, are frightened when a giant, well-regarded company collapses overnight. The obvious lesson: don't keep too many eggs in one investment basket, especially in the company you work for. Utilities deregulation has suffered a severe blow: if a huge company like Enron can disappear overnight, how can you trust new market players to provide you with essentials like electricity, gas and water? And maybe it's time to change the name of the Houston Astros' home park, Enron Field, to House of Cards.

The bottom line: Enron wanted to change the world. It did. But not quite the way that it had in mind.

--Kenneth Lay and Jeffrey Skilling, in a letter to shareholders that boasted of the company's vast opportunities for growth

"Even an effective internal control system can provide only reasonable assurance with respect to the preparation of reliable financial statements and safeguarding of assets."
--On management's responsibility for reporting financial information to shareholders