What Is Enron?

By Kristi Waterworth – Updated Aug 7, 2025 at 9:26 PM

Key Points

Enron's fraudulent accounting inflated income by misusing subsidiaries and special purpose vehicles.
Enron's use of mark-to-market accounting misled investors, creating non-existent profits.
The Enron scandal led to the Sarbanes-Oxley Act, reforming company audits and governance.

In the financial world, there are a few stories that are lessons for the future. Enron is one such example of what not to do in a very big way.

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An infographic defining and explaining Enron. — Image source: The Motley Fool

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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