If you want an insider view of how corruption works, and how to ensure that it doesn't happen to you, read this book.
If one didn't know better, one would think one was reading a John Grisham or Clive Cussler fiction novel! I couldn't put the book down! It is fast paced, full of action and suspense, and the interrelationships between the people in the company, the bankers, the investment bankers, the traders, the SEC, the government, the press, the auditors, the analysts, are often beyond belief. So many people at so many levels were corrupted by the opportunity to make BIG money by corrupting the system, i.e. by obeying the letter of the accounting law (at least at first), rather than the ethical reasons for those laws.
The book also shows that one cannot judge a book by its cover. The analysts and auditors, who should have done their jobs, but weren't because of the lure of extremely high fees for their companies, were part of the problem. It is my firm belief that if you are an investor, you need to find your own reliable research, that you can trust, and where the researcher isn't being paid, directly or indirectly, by the company you wish to invest in. You also need to be able to read accounts, especially footnotes!
Lastly I really feel for the millions of small investors and their pension funds who invested in Enron and other similar companies. Enron directors and their top employees effectively stole $38 billion from someone. This someone ends up being millions of employees, who trust that their investments are being managed properly, but really have no idea if this is happening.
And the book shows how one can follow Generally Accepted Accounting Principles, whilst behaving completely unethically and against the spirit of the law.
I learnt so much about the system and as someone who is pro-deregulation, I now understand why 100% deregulation is not a good idea, although I would wish that the regulator remains impartial and independent, and if this is the case, who pays this person's salary?
Enjoy the read, and at least for part of it, imagine that it was John Grisham or Clive Cussler who wrote it. Well done to the authors for an incredible book.
The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron
4.6 | 3,923 ratings
Price: 23.63
Last update: 05-16-2024
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