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Regulatory Reminders on Enron Bankruptcy 10th Anniversary

Honest accounting can protect a company from market forces.

A decade after Enron Corporation filed for bankruptcy protection, corporations across the country are still feeling the effect. One of the greatest consequences of the Enron failure was the

A decade after Enron Corporation filed for bankruptcy protection, corporations across the country are still feeling the effect. One of the greatest consequences of the Enron failure was the creation of the Sarbanes-Oxley Act, which has had debatable success in terms of increasing government oversight and preventing corruption.

According to some, the scandal also carries a lesson for other companies.

"The Enron case shows that the market works to weed out this type of unethical behavior," Randall Holcombe, the DeVoe Moore professor of economics at Florida State University, said in a statement. He added that the bankruptcy was a result of the market mechanism, not the unethical practices of the Enron leadership or the clueless regulators.

Holcombe also noted that the market system "rewards businesses that add value to the economy … Market forces put Enron out of business, not government regulators, and the Enron case serves as an example to other companies and to the general public."

Another casualty was the innocent people who lost their jobs because of the rampant corruption and lack of corporate governance. Some former Enron employees recently reunited to observe the 10th anniversary and catch up with former coworkers, according to various postings on the professional networking website LinkedIn.
 

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