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).