Whats the importance of the Enron scandal for the American investor and for the American economy?
The Enron scandal has conveyed to the American investor that he can’t have confidence in the traditional gatekeepers that protect America’s markets. He can’t have confidence in the auditor that presented him with the statements. He can’t have confidence in the standard-setter that created standards which were so fuzzy that Enron was able to hide the obligations of the parent in subsidiaries. You can’t have confidence in investment bankers, in the lawyers for the company. You can’t have confidence in the rating agencies that should have given him a clear picture of what Enron’s obligations were. So what you’re saying is Enron is not unique? It’s a signal that the integrity and honesty of the American markets have been damaged? I think Enron is symptomatic of something that’s going on in a lot of American companies where there has been, in my judgment, an erosion in the culture of integrity that was so significant a part of America’s corporate structure up until recent years. But why has
