learn that Enron's senior managers made millions of dollars dumping their shares of Enron stock while urging employees and stockholders to buy or hold their soon-to-be-worthless stock. The authors suggest that ambition and pride, rather than greed, might have caused Enron to collapse. They note that Enron succeeded as an energy trading company because innovators, such as Jeffrey Skilling, built the proverbial better mouse trap. Spurred by a combination of desperation, ambition, egotism and pride, Skilling and other senior executives began to take more chances in an effort to bolster their once untarnished record of achievement and financial success. When it became apparent they could no longer disguise Enron's financial problems lawfully, they chose to commit fraud rather than admit the company was failing.
Timmons, Thornton, and Woellert note that one of the most interesting facts uncovered after Enron filed for bankruptcy protection was how many people played a role in deceiving investors, stock analysts and other outsiders. For example, Timmons et al report that when stock analysts visited Enron, energy traders would make imaginary telephone calls and complete imaginary energy trading deals with nonexistent with buyers and sellers to convince visitors of the vibrancy of the company's energy trading related activities. There is evidence that some of Enron's banks participated in the cover-up of Enron's financial condition. For example, CitiBank had to prop up Enron for at least two years prior to the bankruptcy, and at times CitiBank provided the bulk of the company's cash flow (Timmons, Thornton, Woellert, 2003, 75).
In another well known case, the CEO of WorldCom masterminded an accounting fraud estimated by some experts at $11 billion. According to Daniel Kadlec, Dody Tsiantar, Barbara Kiviat, and Alice Jackson Baughn writing for Time (2004), rather that reporting huge losses WorldCom's CEO allegedly resorted to a combin...