Enron bankruptcy
Enron Corporation filed for bankruptcy with $63.4 billion in assets, the largest US bankruptcy at the time. The collapse revealed that a supposedly 'old economy' energy company had been using off-balance-sheet special purpose entities and mark-to-market accounting to fabricate earnings for years. The dot-com-era looseness had extended well beyond technology.
Enron's auditor, Arthur Andersen, was convicted of obstruction of justice in 2002 for shredding Enron documents. The conviction was later reversed by the Supreme Court, but Andersen had already collapsed. The loss of one of the then-Big Five accounting firms is arguably the most significant structural consequence of the scandal.
07 · Dot-com Crash
Between 1995 and March 2000, the Nasdaq rose more than fivefold. Any business with a .com in its name could raise money on a spreadsheet. The thesis was real — the internet would reshape the economy — but the valuations were a different thing entirely. Pets.com, Webvan, Kozmo, eToys. When the cash ran out, it ran out everywhere at once.
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