Case you Research Conventional paper

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as well as

~" IESE CBS

Organization School

University or college

BE-180-E

November 2012

of Navarra

Jeffrey Skilling, Bernie Madoff the Monster & the Various other

Smartest Folks of the Space

Enron and Madoffs Ponzi scheme: two scandals that changed U. S. history and prove precisely how weak the controlling systems of designed economies will be. Enron, the seventh largest company in the us, was reported bankrupt in December 2 hundred 1 following its purchase partnership turned out to be masking a colossal mountain of debt (around $1. 2 billion).

Similarly, Madoffs company, Bernard L. Madoff Investment Securities, was associated with a $65 billion scams ' that affected around 4, 800 clients around the world, includГ­ng investment banks (e. g., Banco Santander, UniCredit, HSBC), hedge funds (e. g., Ascot Partners and Man Group PLC), charities (e. g., Mortimer B. Zuckerman Charitable Remainder Trust, JEHT Foundation), universities (e. g., New York University, CarnegГ­e Mellon University), prominent exclusive investors (e. g., the International Olympic Committee) and, of course , many Hollywood players.? There are severa! similarities between your two stories, and there are for least two issues that should never be forgotten.

1st, the people linked to these stories were incrediblyВ·smart; their specialist trajectories had been exceptional for any woman: Jeffrey Skilling, president of Enron, obtained an MASTER OF BUSINESS ADMINISTATION from Harvard Business School and, just before joining Enron, was the most youthful partner of McKinsey in the history of the organization; John Clifford Baxter, CEO of Enron North America, received an MBA from Columbia University and moved up quickly inside Enron; Richard Causey, Bnron's chГ­ef accounting officer, attained an MBA from the University or college of Arizona at Austin and, before joining Enron, was a spouse of Arthur Andersen. In the same way, Bernie Madoff was a great icon in the North American financia! sector.

, The Guardian, The fall of 18, 2011.

2 tne Wall Street

Joumat,

March six, 2009.

This situatio was prepared by Professor Antonino Vaccaro and Tommaso Po?iltis, Post-Doctoral Research Fellow, while the basis pertaining to class discussion instead of to illustrate either powerful or inadequate handling associated with an administrative situation. November 2012. This case was written with all the support from the CBS (Center for Business in SocГ­etv), lESE. Copyright В© 2012 lESE. To buy copies contact lESE Creating via [email protected] send a fax to +34932 534343 or phone +34932 534200.

No a part of this syndication may be reproduced, stored in a retrieval program, used in a spreadsheet, or perhaps transmitted in any form or by any means -- electronic, physical, photocopying, documenting, or otherwise - without the agreement of lESE.

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QIII'

BE-180-E

Jeffrey Skilling. Bernie Madoff the Monster

&

the Other Best Guys from the Room

Second, the storm that implemented the outbreak of the two scandals practically destroyed the life span of those individuals that thought they were smarter than everyone else. Jeffrey Skilling, for instance , was sentenced to twenty-four years andfour months in prison and fined $45 million; Ruben Clifford " Cliff" Baxter committed suicide in January 2002; and Andrew Fastow was sentenced to 6 years in jail and then two years of probation. Busted on Dec 10, 2008, Bernie Madoff was sentenced to 150 years in prison upon June up to 29, 2009, and his son Indicate committed suicide exactly two years after his father's detain, on 12 , 10, 2010. Let's now look at the motorists that triggered the failing of two organizations that have been supposed to prevent and eventually compare the introduction of this kind of criminal and dangerous networks; Arthur...



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