||Enron is founded by Ken Lay after merging
Houston Natural Gas and InterNorth.
||Jeffrey Skilling assumes job as chairman
and chief executive of Enron Finance.
||Andy Fastow is hired by Skilling for a
position in Enron's new finance business
||The SEC allows Enron to use mark-to market
accounting instead of traditional, accrual
accounting. The new accounting system allows Enron
to begin reporting fast-growing profits.
||Enron becomes the largest seller of natural
gas in North America.
||Chief Financial Officer Andy Fastow forms
two limited partnerships, LJM Cayman and LJM2 for the
purpose of buying Enron's poorly assets. Fastow receives
an exemption from conflict-of-interest rules by the Board
of Directors, thus allowing him to manage the companies.
||Enron and Blockbuster enter into a 20-year
agreement to stream on-demand video entertainment.
Enron claims $110 million in profits from the deal, even
though the network would fail and Blockbuster withdraws
from the contract.
||Enron stock its an all-time price high of
$90 a share.
||Andy Fastow and CAO Richard Causey meet to
discuss the "Global Galactic" agreement that protects
Fastow from losses in the side deals he has made for Enron
||Enron finishes the tear with its stock
price up 87% to $83.13, 70 times earnings. Fortune
magazine calls it the most innovative large company in the
|March 5, 2001
||Bethany McLean publishes an article Is
Enron Overpriced? in Fortune magazine. She
writes that investors are generally clueless as to how
Enron earns its reported profits.
||Skilling verbally attacks an analyst who
questions Enron's failure to release a balance sheet along
with its earnings statements, calling the an "asshole."
||Skilling resigns as CEO of Enron. Lay
re-assumes the job as CEO.
||Vice president for development at Enron,
Sherron Watkins, sends an anonymous letter to Lay
criticizing the company's accounting practices. In
the letter she says she is worried Enron "will implode in
a wave of accounting scandals."
||Watkins meets with Lay and gives him a
6-page letter detailing problems with Enron's accounting
practices. Lay promises to take her concerns
to the company's law firm, Vinson & Ellis.
||A manager of an important hedge fund says
"Enron stock is trading under a cloud" as its stock price
continues to fall.
||Enron announces that it will have to
restate its earnings from 1997 to 2000 to correct
||The Enron Board learns that Fastow received
$30 million (more, actually) from managing LJM
partnerships. Enron's stock drops 20% in a day after
the SEC announces that it will investigate several Enron
|October 24, 2001||Enron fires Andy Fastow.
||Credit rating agencies lower Enron's credit
rating. From August through the end of October, Ken
Lay has sold 918,000 shares of Enron while insisting to
others the company was in good financial shape.
||In a desperate effort to save itself from
bankruptcy, Enron explores merger or acquisition
possibilities with rival Dynegy.
||Dynegy says it will not acquire
Enron. Enron's credit rating is reduced to junk
status. Enron's stock price falls to $0.61.
||Enron seeks Chapter 11 bankruptcy
|December 2001||Skilling tells the New York Times ,
"I had no idea that the company was in anything but
||Ken lay resigns as Enron's chairman and
||Skilling testifies before about the Enron
collapse before a congressional committee; Fastow invokes
his 5th Amendment protection and refuses to testify.
|June 15, 2002
||Enron's auditing firm, Arthur Andersen, is
convicted of obstruction of justice in connection with its
shredding of Enron documents.
|July 30, 2002
||President George W. Bush signs the
Sarbanes-Oxley Act imposing new accounting and reporting
obligations on American businesses.
||Enron accounting firm Arthur Andersen
surrenders its CPA license and its 85,000 employees lose
||Andy Fastow is indicted on 78 counts of
|May 1, 2003
||Lea Fastow, the wife of Andy Fastow, is
charged with conspiracy and tax evasion.
||Andy Fastow enters into a plea agreement
and promises to cooperate in the prosecution of other
||A grand jury in Houston indicts Jeff
Skilling on 35 counts, including charges of fraud, insider
trading, and conspiracy.
|July 7, 2004
||A grand jury indicts Ken Lay on 11 counts,
including charges of wire fraud, securities fraud, bank
fraud, and conspiracy. The next day, Lay surrenders
to the FBI.
||Richard Causey enters into a plea bargain
agreement with the government.
||Jury selection begins in the trial of Lay
|May 17, 2006
||The jury begins deliberation in the trial
of Lay and Skilling.
|May 25, 2006
||The jury convicts Skilling of 19 of 28
counts of wire fraud and securities fraud. Lay is
convicted on all six counts of fraud.
|July 5, 2006
||While staying in a cabin outside Aspen,
Colorado with his wife, Ken Lay suffers a heart attack and
||Andy Fatow is sentenced to six years in
||Judge Lakes sentences Skilling to 24 years
in prison and sets a fine of $45 million.
||Jeff Skilling begins serving his sentence
in a low-security prison in Waseca, Minnesota.
||Andy Fastow is released from prison.
|June 21, 2013
||Judge Lake reduces Skilling's sentence to
14 years (and, with good-time credits, he could be
released by 2017).