Hello, my name is been Vince Schembri and I’m the president of WOWzer Technologies. Today, I want to talk to you about something that happened at the turn of century, just after the dot com crash. The Enron corporation as they went from a high of $90 per share to zero within the span of a year and a half.
What led to that? They were the darling of wall street. They were the seventh largest corporation at the time but it was all built on deception. Deception of what they were actually doing and what were they really doing you might ask? The management had devised plans to have, what they call, “special purpose entities.” These are companies or organizations that they formed to hide all their losses so they could only report the good things.
And even how they did that was very difficult to follow. Confused yet? A lot of people were, it’s even confusing me as I’m talking about it. Why go through all this trouble to, to deceive and hide, what does it do for you?
What it does is… causes this kind of result, from 90 to zero. So, what can we learn from it? We can learn that these are the things we should not do. We should always be above board and we should always be transparent and report what that is actually happening.
I know the majority of people do that, but sometimes, you never know how these deceptive things get started. Doing the right thing for the right reason on an ongoing basis always is the most important thing that anybody can do.
I think that’s the biggest lesson that we can get from this. Because if you go back and read a little bit of the history, what you’ll find out is not only did the company go down, all the employees lost their jobs and all their pension as well. All the investors lost all their money. And Arthur Anderson, the accounting company, who was charged with doing the audit on an annual basis, no longer exists. They were one of the big five accounting firms. So that just shows you the magnitude of how things can go against you.