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The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron

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4.14  ·  Rating Details ·  11,134 Ratings  ·  381 Reviews
What went wrong with American business at the end of the 20th century?

Until the spring of 2001, Enron epitomized the triumph of the New Economy. Feared by rivals, worshipped by investors, Enron seemingly could do no wrong. Its profits rose every year; its stock price surged ever upward; its leaders were hailed as visionaries.

Then a young Fortune writer, Bethany McLean, wro
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Published September 30th 2004 by Penguin (first published 2003)
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LeAnne Actually, this book gives us lay people enough information and explanation to at least understand the basics of what happened, how it happend, and why…moreActually, this book gives us lay people enough information and explanation to at least understand the basics of what happened, how it happend, and why it happened. There are also 3 other books about the Enron situation that I know of which may be helpful.
* Conspiracy of Fools by Kurt Eichenwald
* Power Failure by Mimi Swartz & Sharron Watkins
* Anatomy of Greed by Bryan Cruver(less)
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Community Reviews

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BlackOxford
Great Expectations

This is the definitive case history of the demise of the most admired company in America. What it demonstrates is the the failure of Enron, although facilitated by the greed and moral indifference that is typical in corporate life, was at root down to its excellence in precisely that set of skills for which it was most admired: corporate finance.

Jeff Skilling, a former McKinsey colleague of mine, was the 'vector' by which the infectious scourge of financial theory found its way
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Michael
Dec 13, 2014 Michael rated it really liked it  ·  review of another edition
In the mid to late 90's, Houston based company Enron shone brightly as the pin up boy of corporate America. At it's peak in August 2000 it had over 20,000 employees world wide, projected revenue of $101 billion and a share price that hit an all time high $90. Fast forward just over a year and the unthinkable had happened with the company filing for bankruptcy as it share price ended the year at a disastrous $0.30.

The story of how Enron collapsed so quickly is one of corporate greed and deregulat
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Toe
Feb 16, 2009 Toe rated it really liked it  ·  review of another edition
Shelves: nonfiction
That I am an internal auditor at a major oil and gas company undoubtedly contributed to my interest in this book. Nonetheless, McLean and Elkind's ability to present a convoluted and complex topic in an intriguing way culminate in this page-turner that anyone with even a moderate interest in business, accounting, economics, or current affairs will enjoy. The authors strike an effective balance between providing the nitty-gritty details of the accounting, the bigger picture, and the gossip.

In ma
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Rishi Prakash
Sep 08, 2013 Rishi Prakash rated it it was amazing  ·  review of another edition
I had read about the scandalous fall of Enron while studying in graduation but it was just a news for me that time which was like any other news in the business page. It was much later that I started seeing the refernce of Enron in various corporate stories while reading and that is how my curiousity started building. And i must confess I would have never ever understood the significance of the entire Enron story if not for this great book. Enron has gone on to become a master case study to set ...more
Mathias
Mar 24, 2007 Mathias rated it really liked it  ·  review of another edition
Shelves: businessprofiles
Another excellent work that provides insight into how financial incentive regimes (Regulations, Markets, Competitor Behavior)influence the actions of micro-players (CEO's, divisional managers, etc) in the business world.

Enron's collapse is a case study of what can go wrong in an economic system that lacks adequate checks and balances coupled with the increasing disempowerment of other important economic actors (labor unions etc). Unfortunately whatever lessons have been learned from Enron have y
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Jowanza Joseph
Dec 23, 2015 Jowanza Joseph rated it it was amazing  ·  review of another edition
Shelves: 2016
I never thought accounting would provide so much entertainment. Since I knew little of exactly what occurred with Enron I wanted to give this a shot and it did not disappoint.
Athan Tolis
Jan 15, 2014 Athan Tolis rated it really liked it  ·  review of another edition
Shelves: biography, business
This book is generally acknowledged to be the definitive account on Enron and the creative accounting era. And it is a truly overwhelming piece of research.

In contrast with "Barbarians", "When Genius Failed" or the more recent "Billionaire's Apprentice", it does not read like a narrative, and that's because it really can't. Enron was a lot more complex than a single transaction or a single hedge fund. It was an agglomeration of businesses, each with its own specific character. You can't go over
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Ben
Apr 15, 2015 Ben rated it it was amazing  ·  review of another edition
Shelves: adulthood
I enjoyed the documentary based on this book when it came out a few years ago and the book is fantastic as well. The book goes into a lot of detail about the chaotic profit-obsessed groundwork that led to the eventual scandals at the company. For example, years before their bankruptcy, Enron became so enamored with hotshots from Ivy League schools that they started ONLY hiring hotshot Ivy Leaguers who wanted to close big deals but had no interest in doing the grunt work necessary to make those d ...more
George
Jul 10, 2008 George rated it it was amazing  ·  review of another edition
This book is a must for just about everyone. It reads like a novel, but unfortunately its all non- fiction. This book proves that truth is sometimes stranger than fiction.
For anyone who has an interest in protecting your wealth and hard earned money, this is a must reead. I learned how important it is how your personal actions and behaviours can have such a detrimental affect not only to those around you but way beyond those that might seem unafected. The enron scandal was something that everyon
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Ryan
Jul 15, 2007 Ryan rated it really liked it  ·  review of another edition
Recommends it for: people interested in business ethics or think smart people will make the right decisions
Detailed history of Enron from its foundation to collapse, with particular attention paid to the critical characters (Ken Lay, Jeffrey Skilling, Andrew Fastow, etc.) Interesting if you think fall of Enron is an interesting subject (I do, but don't blame you if you don't). My biggest takeaway was the question of whether getting "the smartest guys" all together in a room will lead to good results, since it was clearly such a catastrophe in this case. And, if getting the smartest guys together in a ...more
Nicola
The Smartest Guys In the Room is a well-written, well-researched attempt to unravel the financial shenanigans that led to Enron’s bankruptcy. It’s a compelling (and sometimes soapy) indictment of the worst side of business, and it queasily foreshadows the financial crisis of 2008.

I can’t say enough about how well McLean and Elkind present the material in this book, but the fact remains that (a) it’s really, really long, and (b) it’s about finance. I learned a lot about securitization (etc.) as a
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Daryl
Sep 13, 2012 Daryl rated it it was amazing  ·  review of another edition
"Smartest Guys" provides a fascinating look inside a very troubled company. Some of the explanations of the various financial instruments that Enron used are a little hard to follow, but I suspect even accounting and finance professionals had similar problems with Enron's machinations. The authors do a great job highlighting the main personalities involved in the fraud, and they keep the narrative moving even through the most complex periods in Enron's history.
Gwen (The Gwendolyn Reading Method)
Get ready for a lot of really minute details about business deals, 480 pages of them. But they're all needed to build up the full story of what actually happened at Enron and that overall story is well worth the slog! Highly recommend.
Frank
Nov 22, 2014 Frank rated it it was amazing  ·  review of another edition
An excellent summation of one of the most complex court case/bankruptcy/fraud. The book starts with the author comparing himself to Woodward and Bernstein's "All the President's men" which I found a bit presumptuous and set off a red flag. But after reading the book, I have to agree a bit with the analogy. While there's obvious differences (the author isn't even found in the book. Company versus government. Mildly complex but easy to understand vs. "WTF" levels of complexity" The comparison actu ...more
Achtung Englander
Nov 03, 2014 Achtung Englander rated it really liked it  ·  review of another edition
Shelves: business
It all started with Enron. Before the banking crises that saw Lemhan Brothers file for the biggest bankruptcy in history, the word "Enron" was synonymous with failed business of a scale never heard of before.

The book is written in a gripping manner that is both easy to read without wallowing in the intricacies of its financial machinations, and delves into the personalities and politics of people who scammed the business. You will be shaking your head in anger at the sort of money we are talkin
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Biafra
Jun 21, 2014 Biafra rated it really liked it  ·  review of another edition
What an adventure. In short, the book describes the key players, their personalities, ambitions, and background, along with the financial forces at work that created the culture of Enron and thus the seeds for its dramatic rise and fall.

While a bit more background on the history of Northern Natural Gas (predecessor of Enron) would have been interesting, the book does a great job of describing the various markets that Enron entered (from securitizing natural gas futures to the attempts to do the
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Mark Oppenlander
It's hard to believe that Enron declared bankruptcy almost 14 years ago now; the wound of it is still pretty fresh in collective consciousness. The rise and fall of this American company will stand for a long time as one of the great tales of economic hubris. Bethany McLean and Peter Elkind were the financial journalists who first broke the Enron story and this book is their definitive account of the whole sordid thing.

I've previously seen the documentary film based on this book, so much of what
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Iain
Aug 25, 2015 Iain rated it really liked it  ·  review of another edition
A case of study of infuriating capitalist greed, megalomania, and sociopathic tendencies, that would be the top brass of Enron. This book is well researched and brings all the players of the (at the time) largest bankruptcy in U.S. history into perspective. "The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron" written by Bethany McLean (a superb investigative journalist) brings you right into the boardroom (if you want to call it that) and shows what a group of A-type pe ...more
Kirk
Mar 28, 2015 Kirk rated it it was amazing  ·  review of another edition
What a book. There was so much going on at Enron, it was fucked up in so many ways. What a dysfunctional company. The contents of this book could be fodder for all sorts of useful lessons, such as:

- Role of management in a public company: Public cheerleader, booster of stock value or steward of the company's assets? Can we put Friedmanism to bed?
- Business ethics: whether not doing something strictly illegal is the full extent of moral responsibility
- Employee incentives: What happens when y
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Murali Neelakantan
A well researched account of the key events and actors in the Enron saga. A book that every corporate executive ought to read every few years so that they are reminded that once the line is crossed, it is forgotten and there is no turning back. Unsurprisingly, despite the amount of press coverage that the scandal got, there seem to be a number of similar events over the last decade. What should worry us is that we now have a breed of executives in corporations, banks, consulting firms, law firms ...more
Zack
Mar 16, 2013 Zack rated it really liked it  ·  review of another edition
I watched the documentary based on this book, and while it was entertaining (in a sad, "how the hell do they get away with this sort of stuff" kind of way), 110 minutes is nowhere near enough time to unwind all of the chicanery and manipulation at the heart of the Enron scandal. The book, I'm happy to say, is far more comprehensive. And yet, although dealing with potentially dense, head-scratching issues of the structuring of complex financial instruments, it manages to be a compelling, dare i s ...more
Leah
May 20, 2012 Leah rated it liked it  ·  review of another edition
Very well-researched and detailed book, sometimes too detailed. It's pretty well-written, but I gave it three stars because you can really get bogged down in the all the financial mumbo-jumbo. It's also kind of exhausting to read because you will be irritated by how arrogant and stupid the Enron leaders were, and as they make the same mistakes over and over, it's easy to lose interest as a reader. If you are someone who really likes reading about financial markets and business, though, this will ...more
Steve Bolin
Sep 23, 2015 Steve Bolin rated it really liked it  ·  review of another edition
If you ever wondered how Enron went so quickly from darling of Wall Street to a bankrupt shell of a company, this is the book for you. You will read how a company fell victim to the greed of it's leaders and along the way wiped out the life savings of numerous employees and stockholders who were conned into believing that unbelievable income growth will go on forever. What they didn't realize was that the growth was all the result of accounting parlor tricks that treated borrowed money as profit ...more
Virgilio Pigliucci
A great depiction of one of the biggest example, in modern history, of the "mafia" evolution to the highest levels, where the street violence and the low-level crime become high volume bribery and financial crimes that are capable of hitting way more people than the mob of the 70s.
I read the book in a few months... very interesting but hard to follow between so many numbers, episodes and not an easy narrative plot. When I was done with it I found the documentary on Netflix and after those 2 hour
...more
Frank Stearns
Apr 10, 2015 Frank Stearns rated it really liked it  ·  review of another edition
I remember when Enron was flying high and on every wall street analysts "Strong Buy" list. I looked at it a few times then and could not understand the valuation - so stayed away. This company not only destroyed itself, but took Arthur Anderson down with it. This is a good post-mortem and detailed look at what went wrong. On balance a fascinating read for people interested in business, economics, history and human nature in general.
Johns
Apr 12, 2016 Johns rated it it was amazing  ·  review of another edition
Bethany McLean has written the classic U. S. business Who-Done-It. This is the best business dissection written in the last thirty years. Her superb tactical reach and ability to comb out minute details is amazing and seals the deal when read end to end. Somewhat perversely, the book has made me a fan of the brilliant but crooked mastermind, Jeff Skilling. Of course, if I had lost money on Enron . . .
Scott Daum
Dec 28, 2015 Scott Daum rated it really liked it  ·  review of another edition
Fascinating and insightful book into the "rise and fall of Enron." The author does a good job of presenting an increasingly intricate web of facts and circumstances, much of which is jaw dropping in scope. While the scale of the fraud and bad acts boggles the mind, I do think that a lot of legitimate business got tainted by author's paint brush, but that is a small criticism in an otherwise well-researched, well-written book. Highly recommended for those interested.
Victoria
May 24, 2014 Victoria rated it it was amazing  ·  review of another edition
Great book that I could not put down. Such an unbelievable story that is only too believable. I worked for Price Waterhouse in the 90s and saw some of these shenanigans on a much smaller scale (I'm sure there was plenty I did not see). Ultimately I blame Anderson for allowing all they allowed. They were bullied and they were too weak to manage their client in the name of billable hours.
Bryce Wong
Aug 30, 2014 Bryce Wong rated it it was amazing  ·  review of another edition
This book offers its readers a peek into the lives of Enron’s masterminds, graphically describing the events leading up to their demise. What first started out as a winning formula to earning truckloads of cash from trading soon culminated into a series of accounting frauds, lies, and deceptions to deceive the public into thinking that they were actually successful despite racking up huge debts. Think of Enron as the mother of energy back in its heydays. They had assets that were comparable if n ...more
The Pfaeffle Journal
Jan 20, 2014 The Pfaeffle Journal rated it really liked it  ·  review of another edition
Shelves: 2014
“malfeasance n. intentionally doing something either legally or morally wrong which one had no right to do. It always involves dishonesty, illegality, or knowingly exceeding authority for improper reasons. Malfeasance is distinguished from “misfeasance,” which is committing a wrong or error by mistake, negligence or inadvertence, but not by intentional wrongdoing. Example: a city manager putting his indigent cousin on the city payroll at a wage the manager knows is above that allowed and/or lett ...more
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Around the Year i...: The Smartest Guys in the Room, by Bethany McLean 1 9 Oct 31, 2016 05:53PM  
  • Conspiracy of Fools: A True Story
  • Den of Thieves
  • When Genius Failed: The Rise and Fall of Long-Term Capital Management
  • The Predators' Ball: The Inside Story of Drexel Burnham and the Rise of the Junk Bond Raiders
  • House of Cards: A Tale of Hubris and Wretched Excess on Wall Street
  • Barbarians at the Gate: The Fall of RJR Nabisco
  • The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History
  • Bull: A History of the Boom and Bust, 1982-2004
  • Fiasco: The Inside Story of a Wall Street Trader
  • Fool's Gold
  • The Aggressive Conservative Investor
  • The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance
  • Power Failure: The Inside Story of the Collapse of Enron
  • In an Uncertain World: Tough Choices from Wall Street to Washington
  • Monkey Business: Swinging Through the Wall Street Jungle
  • The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States
  • Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis — and Themselves
  • The Partnership: The Making of Goldman Sachs
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Bethany McLean is a contributing editor to Vanity Fair magazine, and known for her work on the Enron scandal. She had been an editor at large and columnist for Fortune magazine.

McLean grew up in Hibbing and received her BA in English and mathematics at Williams College in 1992. After college and prior to joining Fortune, she worked as an investment banker for Goldman Sachs.
More about Bethany McLean...

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“Back in those less complicated times, there were lots of industries that operated more or less by rote: the old banker’s motto, for instance, was “3-6-3”: take money in at 3 percent, lend it out at 6 percent, and be on the golf course by 3 P.M.” 2 likes
“The tale of Enron is a story of human weakness, of hubris and greed and rampant self-delusion; of ambition run amok; of a grand experiment in the deregulated world; of a business model that didn’t work; and of smart people who believed their next gamble would cover their last disaster—and who couldn’t admit they were wrong.” 1 likes
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