1. BE1200, Basic Engineering I: Quiz 9 Design in Engineering Ethic Team 3 Presents: Enron Case

2. About Enron Formed in 1932, in Omaha, Nebraska.Formed in 1932, in Omaha, Nebraska. American energy, commodities, and service companyAmerican energy, commodities, and service company One of the world's leading electricity, natural gas, communications, and pulp and paper companies One of the world's leading electricity, natural gas, communications, and pulp and paper companies America's Most Innovative Company for six consecutive years America's Most Innovative Company for six consecutive years Located in Houston, taxes Located in Houston, taxes Enron employed about 20,000 people Enron employed about 20,000 people

3. Enron Scandal, What crime did they commit? Enron has since become a popular symbol of wilful corporate fraud and corruption. Enron has since become a popular symbol of wilful corporate fraud and corruption. Enron hid company financial problems which led to the world’s biggest corporate bankruptcy Enron hid company financial problems which led to the world’s biggest corporate bankruptcy Chairman and chief executive of Enron were urging employees to buy more shares in the energy trading giant Chairman and chief executive of Enron were urging employees to buy more shares in the energy trading giant Enron was charged with criminal acts, including fraud, money laundering, insider trading, and conspiracy. Enron was charged with criminal acts, including fraud, money laundering, insider trading, and conspiracy. These crimes were committed as Enron and Arthur Anderson its auditing company tried to conceal the true state of the company’s finances. These crimes were committed as Enron and Arthur Anderson its auditing company tried to conceal the true state of the company’s finances.

4. They manipulated power availability in order to raise prices. They manipulated power availability in order to raise prices. Closed down electrical power plants for maintenance in such a way to triple the price. Closed down electrical power plants for maintenance in such a way to triple the price. As a result of scandal, people lost their job and entire pensions As a result of scandal, people lost their job and entire pensions Enron filed for bankruptcy in December 2, 2001 Enron filed for bankruptcy in December 2, 2001

5. How did they violate the ethics code? Defrauded the shareholders by creating special purpose entities where profits could be illicitly recorded even though they were not realized and were not technically in accordance with Accounting Standards. Defrauded the shareholders by creating special purpose entities where profits could be illicitly recorded even though they were not realized and were not technically in accordance with Accounting Standards. Defrauded other stakeholders (creditors and employees) by making promises which relied on information they already knew was false. Defrauded other stakeholders (creditors and employees) by making promises which relied on information they already knew was false. Enron didn't act in good faith as an agent or trustee. Enron didn't act in good faith as an agent or trustee. Enron provided false data, records, and notes to their stakeholders. Enron provided false data, records, and notes to their stakeholders.

6. What would you do as a whistle blower? I would notify the security exchange commission. Anonymously call an investigative reporter. Inform the FBI and the media

7. Citations Section 3. Professional Obligation 1. Engineering shall be guided in all their relations by the highest standards of honesty and integrity. Engineering shall acknowledge their errors and shall not distort or alter the facts. Engineering shall acknowledge their errors and shall not distort or alter the facts. Engineering shall not attempt to attract an engineer from another employer by false or misleading properties. Engineering shall not attempt to attract an engineer from another employer by false or misleading properties. 2. Engineering shall at all times strive to serve the public interest. They shall notify the proper authorities and withdraw from further service on the project. They shall notify the proper authorities and withdraw from further service on the project. 3. Engineering shall avoid all conduct or practice that deceives the public. Engineering shall avoid the use of statements containing a material misrepresentation of fact of omitting a material fact. Engineering shall avoid the use of statements containing a material misrepresentation of fact of omitting a material fact. 8. Engineering shall accept personal responsibility for their professional activities. Engineering shall not use association with a nonengineer, a corporation, or partnership as a “cloak” for unethical acts. Engineering shall not use association with a nonengineer, a corporation, or partnership as a “cloak” for unethical acts.

8. End