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John Gledhill, Jane Schneider, Peter Schneider, Ananthakrishnan Aiyer and Cris Shore

On 2 December 2001, four days after its credit rating had been downgraded to

junk bond status, the Enron Corporation of Houston, Texas, filed the biggest

bankruptcy petition in the history of the United States. On the 14 March 2002,

Enron’s accountants, Arthur Anderson, were indicted by a federal grand jury on

the criminal charge of obstruction of justice for “knowingly, intentionally and

corruptly” inducing employees to shred documents relating to Enron. Enron

was thus both a stock market bubble that burst and a perpetrator of frauds that

involved the complicity of many outside the company itself. The fraud element

turned Enron from a flagship of the “new economy” into a “corporate scandal,”

the first of several. By the end of 2002, the distinction of being the United

States’ biggest bankrupt company had passed to the telecoms giant, Worldcom.

When Worldcom’s accounting fraud was originally identified in June 2002, its

scale was estimated at $3.8 billion. Six months later it was clear that the misreporting

was vastly higher, a staggering $9 billion. The New York Times headlined

the affair thus: “The Latest Corporate Scandal is Stunning, Vast and

Simple” (Eichenwald and Romero 2002).