The Enron effect

Lawsuits filed by investors in Enron against two of the fallen energy giant’s arranging banks, Citigroup and JPMorgan, have called into question the very structure of investment banking in the US, as John Hintze discovers

Following the implosion of its client Enron, Arthur Andersen’s fall from the select circle of top accounting firms was swift. The firm’s role in disguising the Houston energy company’s true financial condition followed a string of similar transgressions. So whenthe Justice Department indicted Andersen six months after Enron’s collapse,the integrity bonding it to clients disintegrated, its once solid reputationwas destroyed, and the Big Five accounting firms quickly became the Big Four.

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