Monday, Jun. 24, 2002

Chronology of a Collapse

November 1997
• Enron buys out a partner's stake in a company called JEDI and sells the stake to a firm it creates, called Chewco, to be run by an Enron officer. Thus begins a complex series of transactions that enable Enron to hide debts.

February 20, 2001
• A FORTUNE story calls Enron a "largely impenetrable" company that is piling on debt while keeping Wall Street in the dark.
Stock Close: $75.09

April 17
• Enron chairman Ken Lay meets with Vice President Dick Cheney and other energy-policy officials; it's one of six such visits.

August 14
• CEO Jeffrey Skilling resigns, becoming the sixth senior executive to leave in a year. Lay says in a conference call with stock analysts, "I never felt better about the company." He deflects analysts' pleas for more disclosure. They lower their ratings on Enron stock, which drops in after-hours trading to a 52-week low.
Stock Close: $39.55

October 12
• Arthur Andersen legal counsel instructs workers who audit Enron's books to destroy all but the most basic documents.

October 16
• Enron reports a third-quarter loss of $618 million. Moody's investors Service indicates that it is considering lowering its credit rating on Enron debt securities.
Stock Close: $33.84

October 22
• Enron discloses that the Securities Exchange Commission has opened an inquiry.

October 24
• Chief financial officer Andrew Fastow, who ran some of Enron's stealth partnerships, is replaced.

October 26
• The Wall Street Journal reports the existence of the Chewco partnerships run by an Enron manager. Ken Lay calls Fed Chairman Alan Greenspan to alert him of the company's problems.
Stock Close: $15.40

October 28
• Lay calls Treasury Secretary Paul O'Neill. In October and November, Enron's president phones an O'Neill deputy at least six times, seeking help.

October 29
• Lay calls Commerce Secretary Donald Evans, suggesting he help Enron.

November 8
• Enron admits accounting errors, infalting income by $586 million since 1997.

November 9
• Lay again talks to Treasury's O'Neill.

November 29
• The SEC expands its investigation to include auditor Arthur Andersen.

December 2
• Enron files for bankruptcy.
Stock Close: 26 cents

December 12
• Andersen CEO Joseph Berardino testifies his firm discovered "possible illegal acts" committed by Enron.

January 9, 2002
• The Justice Department launches a criminal investigation.

January 10
• Attorney General John Ashcroft rescues himself from the investigation because of contributions he received from Enron. Andersen acknowledges destroying Enron files.