Enron's Just Like Awkward Accounting

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On October 16th, Enron announced $638 million of losses for the first time on their income statement. They say they have to do a restatement of shareholder equity and restate $1.2 billion worth of shareholder equity related to improper accounting in offbooks. There's four entities, Raptor 1, 2, 3, and 4 that are basically used to hide large debt loads. In fact, I think the Raptors start co-signing deals or at least sort of commingling so if one can't pay something off, then the other one's on the hook for it.

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…

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