Enron's Significance

Enron was already an established corporation long before the Internet was conceived. It had much greater ability than a start-up to conceal what was really happening in the firm and thereby was able to hold on long after the Internet bubble had burst and start-ups were collapsing on every side. It was some 18 months after the crash had begun that Enron began its tumble, but when it came, it came quickly. And because this was the heart of the economy, the shock was profound, bringing with it:

• The collapse of the company itself;

• The destruction of one of the nation's major accounting firms;

• The besmirching of the reputation of the accounting profession generally;

• The embarrassment of many of the nation's most important political leaders;

• A shock to citizens' confidence in the reliability of the U.S. financial system as a whole, and especially in the integrity of the information upon which that confidence was based;

• The revelation of the inefficacy of regulators, who missed the big picture for the details and who caught small violators while large-scale violations went unnoticed for lengthy periods and were finally brought to public view not by the regulators but by suspicious investors;

• The loss of hundreds of millions of dollars invested in Enron; and

• The loss of jobs and pensions of thousands of Enron employees.