Outline of Last Lecture Guest Speaker: Rayburn from GeicoI. About GeicoII. Quotes on IntegrityIII. What’s So Hard About Right and Wrong?IV. Warren Buffett’s Moral CompassV. Rayburn’s Story and AdviceVI. Geico Career InfoOutline of Today’s Lecture I. Notes About “Enron” Movie (Part 1)Today’s LectureSkilling – Cliff Baxter’s best friendBaxter (executive) committed suicideKen Lay (governor of Texas) founded EnronGeorge W. Bush was good friends with LayEnron put on a face of being moralOil scandal in 1987 – oil traders making bets on gas pricesEnron always made profitsLewis Borgette Phony books, falsified bank records, divert company profits to personal accountsLay encouraged his traders to gamble more, didn’t discipline or fire them for the scandalsTraders gambled away the resources, Enron lied on books to save companyBorgette was the biggest money-maker for Enron (^)Jeff Skilling – new way to deliver energy; stock market for natural gas Mark-to-Market accounting – book potential future profits immediatelyPerformance review committee – employees rated on 1-10, terminating 15% of employees per yearJeff Skilling – “I am Enron” - gambled and rode dirt bikes and other risky, wild adventures with other Enron executives, liked “guys with spikes,” Lou Pie – “secret CEO”, obsessed with strippersThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute. MGMT 202Melendez, Paul2013 SpringWeek 7Lecture 9February 19Pie left Enron with $250 millionStock prices kept going up and up, everyone was buying stockEnron mounted campaignPump and dump – top executives Built power plant in India, which couldn’t afford to pay for Multi-million dollar bonuses to executives with profits that didn’t existBought PGE; electrical companyNewly deregulated market in CaliforniaStock was rising but businesses were losing moneyEnron teamed with Blockbuster to provides movies on demand; selling bandwidth; flopped; Enron was running out of ways to bluffExecutives started selling their stock, stock plummeted Fortune 500 reporter (Bethany McClean) asked financial questions, Skilling said he didn’t have time or enough accounting knowledge to answer them, flew Enron representatives out to meet with her the next dayAndy Fascow – “don’t make me look bad”These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a
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