Quote:
Originally Posted by srmom
Crackerbarrel, that's exactly what happened at Enron too, and trust me, Jeff Skilling is now not only a pariah, he's also in prison. It's unfortunate for his family, they are great, but he steered the ship straight into the rocks with the - front end bonuses paid for risky ventures scheme, which caused all the traders to leap before they looked!!! It is a corporate mentality that comes as edicts from the top - produce and get bonuses, doesn't matter if the end product is junk, just make the deal...
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Well, to be fair, Skilling and Lay took active steps to approve bookkeeping, accounting and stock actions that ranged from specious (mark to market) to blatantly fraudulent (dumping shares just before the collapse). While the iBanking douche bag CEOs certainly made a killing, the corporate accountability issue is more that they're getting paid for failure, rather than getting paid for fraud.
I guess the comparison is valid to the extent that both Enron and iBanking wanted to show short-term gains without regard for the long-term consequences of their actions, but I think the comparison kind of ends there - it seems like the matter of degree is wildly different. Enron knew (or should have known) that its (non-existent) balance sheets were full of crap (after all, it had no assets), whereas the majority of the investment community thought that mortgage-backed securities were a worthwhile leveraged investment strategy.
You can't connect the dots from the Lehman CEO directly to the current problem - this was endemic and institutional failure. Enron's top executives were complicit and drove the fraud themselves.