Summary of the Film “The Smartest Guys in the Room”

Enron The Smartest Guys In The manner Frauds and pecuniary s gougedals in the strain domain of a function were before an Enrons fibre and will be after it. Thats in human nature. undecomposed now a chain of events occur to an enormous shock on the breakwater Street and went down in hi myth as 1 of the biggest trading scandals. For a long time sequence of events was a basis for articles and books, objective chooses and analytic researches. Specialties were ret obsolescent and discussed by analytics. It was in truth human tragedy.The film Enron The Smartest Guys In The direction tries to answer the questions that all people somehow connected with the care world were interested in How it could happened? What are the reasons and who is responsible for that? The film tries to lift the veil. From the beginning of the film it is cl advance(prenominal) stated that the Enron circumstance is exceptional. Working in a field of energy and precedent, having reputation of unsink able ship and demonstrating fascinating financial settlements, Enron dramatically fall apartd almost in a day. just the beginning of this story is bright and ambitious.Enron gibes a company of prominent promise. The first fosters of the film represent an end of it John Cliff Baxter committed a suicide, being heartbroken with what was happened. And it was a conviction of the fraud that was happened. After this crucial episode, viewers cause to the best years of the Enron. It is a seventh largest corporation in America, value 70 billion $. It is an innovative business with absolutely in the altogether business model. But how it atomic number 82ts? It starts with spate Lay, who comes to the story of Enron from humble roots. His father is a Baptist parson and their life is rather poor.Probably, his background plays an integral role in having long ambitions to make wealth of him. Ken Lay wants to diverge a merchandise of power and energy. He convinces that authorities is non a solution nevertheless a problem to the business. In other words, he involves in the head of deregulations. Not scarcely he solely other participants of a power and energy business share this out find out. A tendency to deregulations starts to develop in 1985 and in this very moment the Enron is founded. Kay Lay thinks that it would be beneficial for his new company that gas prices float with the currents of the merchandise.That is the power of deregulations. An important episode of Enron is a contribution to the chairwomanial campaign of George Bush, who lately helps to secure money in government subsidies and to promote Ken Lay with idea of deregulations. Trading in oil market considers as a very risky business. But Enron always wins. Even then an improbable success gives a full to doubt about legality of Enrons business. Illegal actions start with the president of Enron Louis Borget, who commands about 3 billion $ of corporate funds in his ain account with the help of a treasurer Mastroeni and his phony books.When the rumors become likewise strong, Mastroeni disc regresss real books and it becomes clear that all reserves of Enron are gambled away. This tremendous tidings is hidden by the bluffing of the market and that is how Enron stays afloat. But a curt later Enron is forced to disclose the information about those manipulations and all viciousness is focused on Mastreoni and Borget. Mastreoni receives a suspended sentence, Borget spends 1 year in a prison. So who will make money now? The second period of Enrons history is connected with Skilling, who is a person with the biggest ideas of all. He is a great raftary as a Ken Lay.It is he who comes up with a new idea make energy a financial instrument like stocks and bonds. And it is like an explosion in the industry. Enron becomes a genius of the industry. All employees are proud of being exerciseing in Enron. It is worth mentioning, that it is a moment when SEC approved an implementati on of a mark-to-market accounting approach, which allows estimating assets of the company by a market price and non by a real. It also allows booking potential profit as it is already gained before money comes to Enron. That is the first almost unobservable disquietude bell to a room for unethical actions and frauds.If to speak about work environment, it is clearly seen that Skilling is an unconstrained leader. Interesting fact of his power is that when he pelf wearing glasses, everyone in the company does the same. But the culture that is cultivated is combative and tough, like in a wild nature with the basic instincts of excerption of the fittest. Skilling is convinced that money is the only thing that motivates people. He wants employees to show him great results, great profit. Therefore, traders are encouraged to gamble. Making money no intimacy what the methods are used.Skilling also implements a system of evaluation of employees and every employee who does not meet the pauperism of Skillings vision is fired. As a result of this system, turnover index is 15% that is really negatively impressive. Skilings vision of people is based on the theory of People with spikes. Only one(prenominal) and exceptional people deserve his attention and respect. The list of people consists of Ken Rice who is a salesman of Enron John Cliff Baxter who is very talented but prone to depression (as viewers of the film know, that will be a fatal point in his future tense).The list continued with Lou Pai a depict skilling lieutenant, working in one of the business units of Enron Enron Energy Services (EES). His activeness is wrapped in a mystery employees even call him lightless CEO. Lou Pai is highly motivated by money. When he loses interest in his work in Enron, put another way, when he achieves a marginal profit, he leaves or better to say escapes from Enron with 250 million $ and becomes the 2nd largest landowner in Colorado. The next stage of Enron is connect ed with its stocks that are being increase significantly day by day.Everyone wants to play in the market because prices go up and up at that place is an illusion that it will never end. The presence of this time is A new day a new bring down. By all means, these records have a direct impact on a profit of Enron, which gets higher and higher. But how they get these numbers? It is a questionable issue. In the books everything goes perfect but in reality it was quite an the opposite. At this time Enron invests in India that is unreasonably risky. And they fails because India could not afford to repair for the power which Enron offers. As it is said in the fim Failure was not an plectron. Hence, Enron hides nsuccessful results in India, continuing show artificial bright results. Later, a fusion with electrical company makes it mathematical for Enron to come into a new deregulated market of atomic number 20. The company shows unrealistic results stock price are soared by 34% in 2 days. Analysts were blinded to the doubtful information that is already occurred. It is not an unfortunate occurrence, but it will be disclosed only later. Enron diversifies its activities in particular, it covers a new market of broadband. But it does not work. It is a mark-to-market accounting that helps Enron to book revenues as it is wanted to be.In reality there are not any revenues. And that is the moment when executives of Enron begin to go out a certainty of collapse they start to sale their stocks. In other words, they leave a drop feeling ship. The end is coming. In 2001 dotcom companies undergo massive difficulties whereas Enron is a shining star of an American economy. It is named as the most admired corporation by pot magazine. But Enron is a black box. Nobody knows how exactly money is made. Suspicions of misrepresentation of financial statements begin to occur. The next key figure in the Enrons case is Andy Fostow who is a financial officer.He is motivated by a future career. He tries to please Skilling and therefore he hides debts in artificial companies and handles finance so that stock prices continue to going up. Moreover, he encourages 96 private banks to put their money in LGM (Andys artificial company) to somehow change Enrons situation. Why respectful banks do not suspect illegality? Analytics pronounce that they do suspect, but agree to give money because Andy Fastow plays on their greed. They are useful idiots. Actions cross the line when Skilling responds unethically to one reporter.It is already perceptible that Skilling starts to lose his countenance. He does not know how to keep stock prices high. Meanwhile, one more illegal chance to keep Enrons stock prices takes place. It is called California. Enron produces an energy crisis. Blackouts take plays as a result a demand on electricity is soared and so do the prices. Consequently, Enron gets money. These manipulations lead to a curing of domestic problems of citizens of C alifornia but nothing changes. During this part, there is a semblance of Enrons activity in California with Milgrams experiment which is quite remarkable.Both experiments are about how people can be convinced to do something morally wrong if a person in authority tells them it is his responsibility and he will not be blamed. As in the Milgrams experiment Enron continues to manipulate with electricity and things become worse and worse. People understand that nothing is left to accident, they blame Enron in this desperate protests take place. In this time George Bush becomes a president of the USA and therefore with the old beneficial relations Enron does have an easy access to the administration.As a consequence, government does not interfere in the Californian difficulties. People stop bank in Enron and its stocks begin to fall. In this moment Skilling suddenly announces that he resigns from Enron. Employees take this is as a betrayal. One of the employees Sherron Watkins become s aware of the fraud that takes place at Enron. She tries to speak with Ken Lay but he does nothing. Meanwhile Securities and substitute Commission (SEC) starts an investigation and discovers that in reality millions of assets are millions of debts. And it is Andy Fostow who is blamed by all Enrons executives for falsifications.It is interesting to note that the same situation was with Borget and Mastreoni in the early 1990s. The end comes in 2001 when Enron declares a bankruptcy. Employees feel that they are on the sinking whip without lifeboats. They lose everything. Cliff Baxter commits a suicide 7 months later. Concerning sad specialities, $ 1,2 billion in retirement funds and $2 billion in pension funds are disappeared in a matter of weeks. 20,000 employees lose their jobs. Ken Lay and Skilling are under a precise look of the Federal Bureau of Investigation. The congressional committees launch court proceedings.It is the end of the film Enron The Smartest Guys In The Room. En rons tragedy is often compared with Titanic. And that is not just empty words. In both cases there were a lot of warnings of possible danger but ships continue a full-speed running. In both cases there were great opportunities but then a combination of human errors and hubris lead to a fatal meltdown. The fall of Enron is a story not only about people but about whole system, consisting of government, financial and business institutions, conditions and relations. All participants in fraudulent actions have their share of a pie.That is wherefore this story is called a story of synergetic corruption. I am absolutely fascinated by this film, to be precise, by a outmatch of greed and addiction to money and power. Understanding that characters of this film are the real people and all actions that were showed really took place makes me fascinated even more. To my mind, Enron case is not an aberration it is a consequence of way of living. It is a tail shadow of the American dream as it i s said in the film. Therefore, it can be repeated. And it can be us who would be affected by manipulations. That really boggles the mind.