The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 59 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
The SEC let Enron recognize 20 years of future cash flows immediately
“The SEC allowed them to go out to 20 years that they could collapse into today revenue.”
Gilbert: Enron's Rebecca Mark Sold $83M in Stock Without Charges
“She sold about eighty-three million dollars of stock. She actually got out early enough, and she was sort of cast out by the male executives at the top in a way where she was actually never accused of any wrongdoing and never really a part of the prosecution o…”
Arthur Andersen made $50 million annually from Enron, its biggest client
“Enron became Anderson's biggest client in the world. They were making fifty million dollars a year from Enron, half of which was audit and tax fees and half of which was consulting fees.”
Enron's CFO didn't track the company's total debt, cash, or maturity schedules
“McMahon learns that not only did Fastow not know how much debt Enron as an organization had, he also didn't know how much cash they had, and he also didn't know the maturity schedule of the debt, so he didn't know And thus, nobody in finance knew the company t…”
Kenneth Lay concealed massive stock dumps by repaying Enron loans with equity
“But the way he repaid them was he took cash loans from Enron. So Enron loaned him cash. What a merry-go-round. And Ken backed his collateral for that cash that he ended up then repaying the loans to Enron with, Was the Enron stock that he originally had taken …”
Rosenthal: John Arnold got Enron's largest non-executive bonus of $8M
“Yeah, he got the largest cash bonus that Enron ever gave to anybody who wasn't a senior executive of, I think, eight million dollars.”
Enron's audit committee chair was the dean of Stanford's business school
“The chair of the audit committee of Enron's board during all the years that all this was going on was the dean of Stanford Business School, who was an accounting professor.”
Gilbert: Skilling Negotiated $20M Payout if Not Named Enron CEO by 2000
“He managed to convince Lay that He should get twenty million dollars in cash if he was not made CEO of Enron by the end of 2000.”
Gilbert: Skilling deliberately avoided signing off on Fastow's LJM partnership documents
“There are documents that surface that have a variety of signatures on them, but not skillings. He very intentionally was like I'm not actually gonna sign off on this, but it's kind of good for Enron that it happens, so I'm gonna let it keep happening.”
Gilbert: Dynegy Term Sheet Included a $60M Cash Bonus for Ken Lay
“As a part of the Dyna-G term sheet, upon completion of the deal, Ken Lay just got sixty million dollars in cash as, like, a bonus.”
Enron left behind approximately $1 trillion in claims across 30,000 creditors
“Enron left behind a trillion dollars of claims to 30,000 creditors.”
Skilling made mark-to-market accounting a mandatory condition for joining Enron
“It was that Jeff Skilling insisted that in order to join Enron and start this new division, Ken Lay and the board had to agree to use mark-to-market accounting.”
Rosenthal: Bush's parents flew on Enron jet to 2001 presidential inauguration
“The Bush family was very close. So close, in fact, that when W was inaugurated president, George H.W. And Barbara Bush traveled from Houston to Washington for the inauguration with Lay on the Enron corporate jet.”
Rosenthal: Enron bank settlements totaled $7.2B, paying $6.79 per common share
“Well, in September, The whole suite of settlements with a whole variety of banks, JP Morgan, Citigroup, various others, come in for a total of 7.2 billion dollars coming into this rotting carcass of Enron, which results in a distribution of six dollars and 79 …”
Rosenthal: Enron was a key player in California blackouts
“They become a key player in the total disaster that is the California blackouts.”
Enron's 'Death Star' scheme exploited imaginary transmission schedules for profit
“Well, it was this experiment where Enron filed an imaginary transmission schedule in order to get paid to alleviate congestion that didn't really exist.”
Gilbert: EnronOnline Launched in November 1999 as Counterparty to Every Trade
“In November of 99, they launched something called Enron Online, and what this is, is it allows all of Enron's counterparties to trade with them electronically. So they stand up and exchange, like an exchange you can access through a web browser, much like FTX,…”
Rosenthal: Pre-SOX accounting allowed deconsolidating SPEs with 3% outside capital
“If you set this up, as long as at least three percent, three, one, two, three percent of the capital in that entity comes from outside investors, you can still have The company itself own 97% of the economics of that entity, and you can remove it from your con…”
Enron's Raptor hedges were collateralized by Enron's own stock
“The Raptors, I believe, were hedges, intended to be hedges on some of Enron's investments, but the actual mechanism and the underlying collateral that they used for the hedge was Enron's stock itself. So they became this, like, massively toxic, like, they didn…”
Enron CFO Andrew Fastow won CFO Magazine's 1999 capital structure award
“He ends up not winning, but he does get a special award from CFO magazine for CFO excellence in the category of capital structure management.”
Rosenthal: Lay Sold $300M and Skilling Sold $200M in Enron Shares
“All told, I think Lay sells about three hundred million dollars worth of Enron stock via these transactions. Skilling sells about two hundred million, and Fastow and a bunch of the other executives sell a whole bunch too.”
Fastow revealed Enron actually held $34 billion in debt, not $12.8 billion
“So he comes back to Lay and the board and says, our actual obligations are thirty four billion dollars, which the debt on the balance sheet was 12.8 billion dollars.”
SEC revoked Arthur Andersen's CPA license in mid-2002, ending 85,000-person firm
“And as a result of that, the SEC in 2002, middle of 2002 revokes Anderson's CPA license.
So literally bars them from.
Oh, I didn't realize that.
Okay.
They had already started to lose tons of clients because, shocker, Anderson was also the auditor of WorldCom,…”
Enron booked $100 million in day-one revenue for an unlaunched Blockbuster partnership
“Oh, the service never launched. But of course, with Enron's Mark to Market, they booked over a hundred million dollars in revenue on day one for it, and then they offloaded the project to a special purpose entity.”
Gilbert: Enron was first non-financial company to use mark-to-market accounting
“But it is worth pointing out that Enron, when they did adopt this, became the very first non-financial company to use this method.”
Gilbert: Enron Recognized More Revenue by Terminating Blockbuster Exclusivity Deal
“So that creates a huge amount of future value for Enron, the company, their shareholders, and so they literally recognized revenue even bigger than the Blockbuster deal after the lack of Blockbuster deal.”
Arthur Andersen instructed Houston team to destroy Enron documents on October 12
“So Arthur Anderson Legal on October 12th sends an email to the Houston office.
God, this email.
Literally directing them in writing in an email to start destroying any and all non-finalized documents that are related to Enron, either digital or physical, quote…”
Arthur Andersen shredded one ton of Enron documents every day for weeks
“They are shredding one ton of paper every single day.
That's the maximum capacity.
This goes on for weeks.
Dozens of tons of paper that they shred of documents related to Enron.”
Rosenthal: Buying Enron stock at 61 cents yielded over a 10x return
“So if you had bought Enron equity in those days between the collapsing of the Dinergy merger And the bankruptcy, if you had bought for 61 cents, you would have had over a ten-x return if you were willing to hang on for seven years.”
Rosenthal: Jeff Skilling and Enron pioneered energy derivatives
“They pioneer this market that would come to be known, and is, I think, and assumes still a very, very large part of the energy market today. Called energy derivatives. Skilling and Enron invent it and pioneer it.”
Enron executive Lou Pai cashed out $250 million to finance his divorce
“He ends up leaving Enron well before the fall, and he sells his stock to finance the divorce for a quarter billion dollars. He makes two hundred and fifty million dollars.”
Enron's reported revenue surged 7.5x from $13.3 billion to over $100 billion
“And they would have a five year run from 1996 to 2001, during which revenues grew 7.5 X during those five years. They went from 13.3 billion in 1996 To over a hundred billion in the year 2000, and every year during that period from 96 through 2001, the company…”
Ben Gilbert: John Arnold founded top-performing hedge fund Centaurus after Enron
“John Arnold went on to start the firm Centaurus, which is one of the highest-performing hedge funds ever.”
Rosenthal: Skilling and Lay Convicted on Multiple Fraud Counts in May 2006
“So, May, 2006, a jury finally convicts Skilling of 19 out of 28 counts of wire fraud and securities fraud, and Lay gets convicted on six counts of securities fraud.”
Enron's overnight commercial paper failed to turn over on September 12, 2001
“On September 12th, Enron's commercial paper doesn't turn over.
Nobody's there to buy it.”
The Enron logo was graphic designer Paul Rand's final work
“This would be the last logo that the legendary Paul Rand designed before he died.”
Enron Strategy Shifted Finance From Cost Center to Profit Engine
“So when skilling gets elevated to number two and fast out to CFO the company, they start articulating as the company strategy that the finance department is going to go from being this shared resource cost center to a profit generating division of the company.”
Gilbert: Banks refused new debt lines before Enron tapped revolving credit
“They actually went and asked the banks, hey, can we get new debt lines with you, and every single one said no, and so they pulled the credit lines, which the banks have no option. It's already negotiated and signed.”
Rosenthal: Berkshire Hathaway Energy acquired Enron's former pipeline assets from Dynegy
“Who ends up buying the pipelines but Berkshire Hathaway Energy.”
Fastow planned to leave Enron to run billion-dollar LJM3 fund
“He actually had, LJM III was in the works to be a billion dollar fund, and if that came together, he was just gonna peace out and go do that.”
Rosenthal: Enron reduced reported trading losses to under $100M in 1987
“This time, Lei does fire them, and fortunately for Young and Ron and for Lei, but unfortunately for the rest of the world, this happens early enough in the quarter that the trading floor is able to dig out enough of these losses that they don't have to report …”
Gilbert: Fastow Avoided Disclosing LJM Partnership Compensation for Five Years
“Fastow went five years without having to disclose how much compensation he was getting from the LJM partnerships.”
Rosenthal: Enron traders racked up nearly $1B in losses in 1987
“So they go on tilt, and they rack up, within the next few months, almost a billion dollars. One B, that's a B, a billion dollars, this is in the late eighties, of trading losses, which that would be enough to bring down the whole firm.”
Enron reported a $638M loss and $1.2B equity restatement in October 2001
“On October 16th, Ben, like you were saying, Enron reports earnings. They announced six hundred and thirty eight million dollars of losses for like the first time on their income statement. And they say they have to do a restatement of shareholder equity and re…”
Rosenthal: McLean's 2001 Fortune story questioned Enron without alleging fraud
“It's not that bad of an article from Enron's perspective. Like, the biggest question it raises is not one of fraud. It's exactly what you said, Ben. It's like, Enron is a black box. Nobody can figure out what's going on here. But there's no accusations of frau…”