Enron’s bankruptcy in 2001 became a major symbol of the accounting scandals that shook markets after the dot-com crash.
Enron filed for bankruptcy on December 2, 2001, after revelations about hidden debt, complex special-purpose entities, and misleading financial reporting. Once celebrated as an innovative energy-trading company, it became one of the most prominent corporate failures in U.S. history. Its stock, which had traded near $91 in 2000, became nearly worthless.
The scandal damaged confidence in corporate accounts, auditors, executives, and financial markets. Enron’s auditor, Arthur Andersen, was convicted of obstruction of justice in 2002, although the conviction was later overturned by the U.S. Supreme Court. The company’s collapse also contributed to broader scrutiny of executive compensation and corporate governance.
Enron was not itself the cause of the entire dot-com crash. The technology-heavy Nasdaq had already peaked in March 2000, and Enron operated mainly in energy and trading. However, its failure occurred during the wider post-bubble decline and helped create pressure for the Sarbanes–Oxley Act of 2002, which strengthened U.S. corporate reporting requirements.