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PHIL215 Lecture Notes - Making Money, Bethany Mclean, Sherron Watkins

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PHIL 215
Lecture #3
Enron Video: The Smartest Guys In The Room:
Movie on YouTube:
Gov’t: SEC - Security Exchange Commission
- Allowed Mark-to-Market accounting:
Boom Market: Pump then dump: Invest then sell. (Eventually leading to market drop)
Sherron Watkins (Enron Whistleblower):
Bethany McLean:
20,000 Lose jobs.
Enron’s collapse broke down Arthur Anderson: 29,000 jobs.
“Story of Synergistics Corruption” - As long as people are making money, they are happy to sign
off on stuff.
At its peak, Enron stock was sold at $90.0; at its lowest, Enron stock was sold at $0.40
Sarbanes-Oxley Act -> U.S.:
- Shredding Documents now illegal.
- Distance between accountants & clients to minimize conflict of interest
Interesting Takeaway for Enron:
Why do people behave badly?
1) Ignorance: doesn’t exactly apply here
2) Weakness of Will: in this case, greed
3) Self-Exception from Universal Standard: Narcissism
4) Situational Pressures: When people are tired, hungry, stressed, they are more likely to
commit moral mistakes (e.g. heart attack experiment)
5) Mimicking Leadership: Corruption seeps down due to leadership culture
6) Unusual Risk-Prone Tendencies: