Enron

The FTX fraud has dominated headlines now for weeks, during which we’ve debated if and how Acquired could uniquely add to the conversation. Then we realized there was an angle so perfect that we had to drop everything and enter Acquired research overdrive: Enron. Travel back with us to the granddaddy fraud of them all, 2001’s then-largest bankruptcy in US history and the impetus for the famous Sarbanes-Oxley Act. So much of Enron’s history parallels FTX that the uncanniness is almost unbelievable — right down to the same CEO running the two bankruptcies. Sit back and enjoy this crazy tale of villainy, greed, and the nature of humans and money. Maybe just don’t take notes on this one… If you want more Acquired, you can [follow our public LP Show feed here in the podcast player of your choice (including Spotify!): http://pod.link/acquiredlp Sponsors: Thank you to our presenting sponsor for all of Season 11, Fundrise. If you’re considering raising a growth round of capital in the next year, you should definitely explore raising some of it with the Fundrise Innovation Fund. Just email notvc@fundrise.com, and tell them Ben & David sent you. And if you’re an individual looking for exposure to private growth-stage technology companies, you can invest in the Innovation Fund here: https://bit.ly/acquiredfundriseinnovation Thank you as well to Vanta. Vanta is the leader in automated security compliance – making SOC 2, HIPAA, GDPR, and more a breeze for startups and organizations of all sizes. Everyone in the Acquired community can get 10% off using this link: https://bit.ly/acquiredvanta And finally thank you also to Pilot! https://bit.ly/acquiredpilot22 Links: Book Andy Fastow as a speaker for your next corporate event! https://www.bigspeak.com/speakers/andy-fastow/ Episode sources: https://docs.google.com/document/d/1WeLpfgPIAyoB5FbugpfqzUY3b-CnhAeGBhGZpBMHxIg/edit?usp=sharing Carveouts!: Enron: The Musical https://www.broadway.com/shows/enron/ Andor https://disneyplusoriginals.disney.com/show/andor Brooks Addiction Walkers https://www.brooksrunning.com/en_us/addiction-walker-suede-mens-walking-shoe/110319.html Hoka Slides https://www.hoka.com/en/us/all-gender-footwear/ora-luxe/1134150.html JCal on the Tim Ferriss Show https://tim.blog/2022/11/19/jason-calacanis-transcript/ New shirts are live in the ACQ Merch Store! https://cottonbureau.com/people/acquired-fm Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.

David RosenthalhostBen Gilberthost

Nov 29, 20223h 32mWatch on YouTube ↗

EPISODE INFO

Released: November 29, 2022
Duration: 3h 32m
Channel: Acquired
Watch on YouTube: ▶ Open ↗

EPISODE DESCRIPTION

The FTX fraud has dominated headlines now for weeks, during which we’ve debated if and how Acquired could uniquely add to the conversation. Then we realized there was an angle so perfect that we had to drop everything and enter Acquired research overdrive: Enron. Travel back with us to the granddaddy fraud of them all, 2001’s then-largest bankruptcy in US history and the impetus for the famous Sarbanes-Oxley Act. So much of Enron’s history parallels FTX that the uncanniness is almost unbelievable — right down to the same CEO running the two bankruptcies. Sit back and enjoy this crazy tale of villainy, greed, and the nature of humans and money. Maybe just don’t take notes on this one… If you want more Acquired, you can [follow our public LP Show feed here in the podcast player of your choice (including Spotify!): http://pod.link/acquiredlp Sponsors: Thank you to our presenting sponsor for all of Season 11, Fundrise. If you’re considering raising a growth round of capital in the next year, you should definitely explore raising some of it with the Fundrise Innovation Fund. Just email notvc@fundrise.com, and tell them Ben & David sent you. And if you’re an individual looking for exposure to private growth-stage technology companies, you can invest in the Innovation Fund here: https://bit.ly/acquiredfundriseinnovation Thank you as well to Vanta. Vanta is the leader in automated security compliance – making SOC 2, HIPAA, GDPR, and more a breeze for startups and organizations of all sizes. Everyone in the Acquired community can get 10% off using this link: https://bit.ly/acquiredvanta And finally thank you also to Pilot! https://bit.ly/acquiredpilot22 Links: Book Andy Fastow as a speaker for your next corporate event! https://www.bigspeak.com/speakers/andy-fastow/ Episode sources: https://docs.google.com/document/d/1WeLpfgPIAyoB5FbugpfqzUY3b-CnhAeGBhGZpBMHxIg/edit?usp=sharing Carveouts!: Enron: The Musical https://www.broadway.com/shows/enron/ Andor https://disneyplusoriginals.disney.com/show/andor Brooks Addiction Walkers https://www.brooksrunning.com/en_us/addiction-walker-suede-mens-walking-shoe/110319.html Hoka Slides https://www.hoka.com/en/us/all-gender-footwear/ora-luxe/1134150.html JCal on the Tim Ferriss Show https://tim.blog/2022/11/19/jason-calacanis-transcript/ New shirts are live in the ACQ Merch Store! https://cottonbureau.com/people/acquired-fm Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.

SPEAKERS

David Rosenthal
host
Ben Gilbert
host

EPISODE SUMMARY

In this episode of Acquired, featuring David Rosenthal and Ben Gilbert, Enron explores enron’s rise and collapse: deregulation innovation, accounting fraud, fallout lessons The episode traces Enron’s origin in U.S. energy deregulation and Ken Lay’s early innovation in creating spot markets for natural gas, later amplified by Jeff Skilling’s vision of Enron as a “bank for gas.” Enron pioneered energy derivatives and scaled a trading-centric model, but paired it with aggressive mark-to-market accounting and extensive off-balance-sheet entities that obscured debt, hid losses, and manufactured earnings.

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