The College of Business hosted speaker Sherron Watkins to discuss her involvement with the notorious Enron scandal with the university and surrounding community. Revealed in October of 2001, the Enron scandal led to the bankruptcy of the Enron Corporation, a large American energy company in Houston, Texas. The scandal also led to the termination of Arthur Anderson LLP in 2002, one of the five largest audit and accountancy firms in the world.

Watkins’ lecture was held in the Student Union Theater on April 19, beginning at 7 p.m., and was introduced as part of The James and Evelyn Livingston Lecture Series on Business Ethics.

The theater was filled with students, faculty, staff and residents of Hammond and members of the Livingston family. The crowd was so large that some listened in from the theater’s entrance hall, due to lack of seating. The lecture was preceded by opening remarks made by Dr. Randy Settoon, dean of business, and Amy Livingston Obershmidt, granddaughter of James and Evelyn Livingston and UCC counselor.

“In today’s world, the slope that leads to corruption and decay is a steep, slippery one,” said Settoon. “We teach that ethics are an ideal to strive for, and this lecture symbolizes the importance of teaching ethics to our graduating students.”

The lecture discussed how Enron fell and how Watkins’ warnings that it would happen were ignored and hidden by her superiors.

“No one intended to break the law, except maybe Andy Fastow who was our chief financial officer,” said Watkins. “Enron prided itself in being an innovative company. The problem with that is if you pushed your employees to innovate and make the company better, sometimes they are pushed into the dark side of innovation, which is fraud.”

Watkins also expressed her hopes that the students in attendance would learn from these mistakes and not repeat them in their careers.

“When it seems too good to be true, do more homework,” said Watkins.

According to Watkins, Fastow and Enron CEO Kenneth Lay sought to keep Enron’s stock prices up despite the company’s financial condition, which was in decline. Fastow worked with investment banks such as Merrill Lynch and Citibank to hide Enron’s losses and keep their stock prices high.

Fastow’s dealings were so efficient that Enron’s stock price was listed at an all time high of $90 per share the year before Enron declared bankruptcy in 2000. When Enron declared bankruptcy their shares would drop to only 40 cents by November of 2001. Shareholders lost, on average, $11 million.

Following the lecture was a short Q&A session with the audience and a reception at the Twelve Oaks reception hall. The event was highly enjoyable and informative to the audience, some of which had no knowledge of the Enron scandal.

“I knew nothing of Enron until today,” said Ryan Jerome, a junior business administration major. “I thought the lecture was interesting, and I learned that it’s better to just be honest, and not go under the table or anything like that.”

The lecture was also positively received by members of the Livingston family.

“The Livingston family is extremely proud of the lecture series’ exposure to students,” said Phil Livingston, a retired banker and the younger son of Evelyn and James Livingston. “The whole idea is to steer students in the right direction. It’s doing what my father would want, he was the original straight arrow.”

The series was founded in 1984 by Hammond business owner John O. Batson in memory of James Livingston and his wife Evelyn.