Legal Issue in Business: The Case of Enron



Legal Issue in Business: The Case of Enron

Introduction

Business ethics is based on normative ethics , standards that ethics are upheld and applied specific to distinguish what is right or wrong, that is to say what should be done or who should not be fact. However, with few exceptions, business ethicists are usually less interested in the foundations of ethics (meta-ethics) or by the principles of justification ethical principles: they show themselves more concerned with practical issues, and any obligation specific practice that may apply to the activity and the relationship to economic (Swartz, 2004).

Discussion and Analysis

Government regulators have been quite willing to act as enforcer for the reformers. In the process, they have criminalized common business practices and created crimes of full disclosure out of whole cloth where there had been none before. This activity made for great theater and lurid headlines that furthered the political ambitions of prosecutors, but it was certainly not at all helpful to the economy. Corporate governance reforms affect every aspect of life in America when they impose unneeded restrictions on management, and the full disclosure system is the most burdensome of all. SEC regulations govern every aspect of securities trading, from the initial offering and the underwriting process to the secondary markets.

The "Enron Scandal" is already a landmark in the history of capitalism that may significantly influence its necessary transformation. The current capitalism "has been a mother," which has escaped all the regulations and controls that kept him within an ethical context.

Business Ethics, Applied Ethics

The trend in recent decades has been to integrate these concepts ever within companies. Be prescriptive, legislating (eg, through the sanction of insider trading, bribes, accounting rules, executive compensation, discrimination, respect for privacy, the sanction of barriers to competition etc..).

The question that arises is that Law and business ethics are they compatible? However, ethics and law remain to distinguish, since the law seeks to maintain order, where ethics seeks only to indicate a course of conduct (soft law) that economic actors should adopt. O'Fallo (2005) explains this difference by showing that no law can be both judge and party, while ethics refers to the personal views and thus the judgment of consciousness leads to a reparability between the rule moral and appreciation.

Background

Enron was one of the largest companies U.S. by its capitalization market. In addition to its own activities in the natural gas, this Texan company had set up a system of brokerage by which she bought and sold electricity, including the network of current distributors of the State of California, communication. In December 2001, it was ??bankrupt because of its losses from speculative trading on the electricity market, which had been disguised as profits via accounting manipulation. This failure resulted in its wake of Arthur Andersen, which audit it accounts.

The Reality

Before Enron, Corp Fin had a goal of reviewing each company's annual report at least once every three years. That goal was not met. Only 53 percent of public companies filing with ...