Corporate Crooks

by FARRELL, GREGWELLS, JOSEPH

• ISBN13: 9781591024552
• ISBN10: 1591024552
• Format: Hardcover
• Copyright: 2006-09-05
• Publisher: Prometheus Books

Summary

How did the most trusted financial system in the world become the breeding ground for the massive corruption uncovered in the Enron and WorldCom scandals? The simple answer is greed. Greed so blinded CEOs, auditors, and even members of Congress that they allowed a gang of rogue executives to rig the game and cheat investors out of $200 billion, wiping out the life savings of many unsuspecting Americans. Written in a straightforward explanatory style, this book allows the average investor to understand the root causes of the biggest accounting frauds of the past 5 years. But understanding how these frauds took place isn't enough. The author also arms readers with the knowledge they will need to judge whether the next fantastic, fast-growing company of the new economy is a genuine business success or another Enron waiting to implode.

Table of Contents

Foreword by Joseph T Wells	13	(4)
Introduction	17	(6)
Chapter One Executive Compensation	23	(16)
From salaries to stock options	27	(1)
Executive compensation goes Hollywood	28	(2)
Easing of restrictions	30	(2)
Unaccountable	32	(3)
CEO pay versus the average wage	35	(2)
Postscript to Waksal's crime	37	(2)
Chapter Two Enron	39	(26)
Edifice of mirrors	41	(1)
From gas pipelines to the "gas bank"	42	(1)
Enron's business	43	(3)
The $80,000 lemonade stand	46	(2)
Fastow's secret partnerships	48	(4)
Bank prostitution	52	(2)
Bogus businesses	54	(3)
Clipped hedges	57	(1)
Sherron Watkins' letter	58	(2)
Enron's implosion	60	(1)
Criminal investigations	61	(1)
Aiding and abetting	62	(3)
Chapter Three The Auditors	65	(26)
The bad old days	66	(2)
The true believers	68	(1)
From profession to business	69	(3)
Loosening the legal shackles	72	(3)
Auditors serving two masters	75	(4)
Consultants versus auditors	79	(2)
The management of Waste Management's earning	81	(1)
The black hole at Enron	82	(2)
The shredding of Arthur Andersen	84	(2)
The verdict	86	(2)
Pyrrhic victory	88	(3)
Chapter Four WorldCom	91	(22)
Motels and Ma Bell	95	(2)
The masterstroke: MCI	97	(1)
Master and commander of the board	98	(2)
Ebbers' money troubles	100	(2)
Cutting corners	102	(2)
Capitalization of line costs	104	(2)
The fraud unravels	106	(3)
Trial and conviction	109	(4)
Chapter Five Tyco	113	(20)
A difficult trial	114	(3)
The board's duties	117	(1)
A criminal birthday party?	118	(5)
A brilliant career	123	(4)
Beginning of the end	127	(3)
The finale	130	(2)
Retrial	132	(1)
Chapter Six HealthSouth	133	(20)
An Alabama success story	135	(3)
Living in a dream world	138	(3)
Cooking the books	141	(4)
Security and paranoia	145	(3)
Televangelist	148	(1)
Aquittal	149	(4)
Chapter Seven Stock Analysts	153	(16)
Conflicts of interest	157	(1)
The end of an era	158	(4)
Jack Grubman's revolution	162	(2)
Judgment day	164	(5)
Chapter Eight The Securities Cops	169	(22)
The Keystone Kops	173	(1)
No respect	174	(5)
The starving of the SEC	179	(3)
Stagnation	182	(2)
Cops without bullets	184	(3)
Congress acts	187	(2)
Competition	189	(2)
Epilogue	191	(10)
Lessons learned	195	(6)
Notes	201	(14)
Special Thanks	215	(2)
Index	217