In For A Penny, In For A Pounding - Enron, Madoff, and Financial Disinformation in the Modern Age

"What kind of company, a publicly traded company, doesn't share its most basic financial information with investors?

In this episode of Disinformation, host Paul Brandus delves into the infamous case of Enron, a Houston-based energy company that was once a Wall Street darling. Enron manipulated its financial information, misrepresenting its earnings and altering its balance sheet to deceive investors. The host also discusses other cases of financial disinformation, such as WorldCom, Tyco, and Health South, highlighting the destructive power of such deception. He raises questions about the role of artificial intelligence (AI) in detecting and preventing future instances of financial disinformation, particularly in analyzing large amounts of text data, like the 10K filings that companies submit to the Securities and Exchange Commission (SEC). However, concerns exist about the potential risks and unintended consequences of relying solely on AI in financial decision-making, emphasizing the need for human oversight. The episode concludes by reflecting on the challenges of controlling AI-powered disinformation and the importance of remaining vigilant in the face of evolving threats.

[00:01:38] Lack of transparency at Enron.

[00:07:00] Financial disinformation.

[00:12:22] AI and financial disinformation.

[00:16:20] AI trading algorithms and risks.

Thanks to Professor Craig Lewis of Vanderbilt University for his insights. Sound from CNBC, ABC and C-SPAN. Got questions, comments or ideas or an example of disinformation you'd like us to check out? Send them to paulb@emergentriskinternational.com. Subscribe wherever you get your podcasts. Our sound designer and editor Noah Foutz, audio engineer Nathan Corson, and executive producers Michael DeAloia and Gerardo Orlando. Thanks so much for listening.