2001

  • Sept. 9 – “Something is rotten with the state of Enron,” writes the New York Times of a 62 percent fall in value of Enron Corp. shares since January. “Or so Wall Street suspects.”
  • Oct. 16 – Enron says that, due to accounting violations, it will restate financial statements for 1997 through 2000.
  • Dec. 2 – Enron files for Chapter 11 protection in what is then the largest bankruptcy in U.S. history.
  • Dec. 12 – The House Committee on Financial Services holds a hearing on the Enron collapse, becoming the first of many Congressional committees to address it.

2002

  • Jan. 23 – Kenneth Lay resigns as Enron Chairman and CEO.
  • Feb. 1 – A special investigative committee of the Enron board of directors releases its Powers Report, which clears the board and places much of the blame on CFO Andrew Fastow, COO Jeffrey Skilling and financial executive Michael Kopper, who in August will strike a deal with the government, cooperating with investigators, pleading guilty to DOJ charges and settling a Securities and Exchange Commission (SEC) complaint.
  • Feb. 4 – Lay resigns from the Enron board. He will die in 2006 awaiting sentencing for securities fraud and related charges. Conspiracy theories will abound.
  • Feb. 13 – The SEC calls on major stock exchanges to review their governance requirements. By the end of the year both the NYSE and Nasdaq will approve and submit to the SEC new governance proposals addressing many of the same issues as Sarbanes-Oxley (SOX).
  • Feb. 14 – Rep. Michael Oxley, R-Ohio, introduces the House version of what will be SOX, the Corporate and Auditing Accountability, Responsibility and Transparency Act (H.R. 3763).
  • March 31 – The Public Oversight Board, the private self-regulatory body of the accounting industry, is formally dissolved. It will be replaced by the independent Public Company Accounting Oversight Board (PCAOB) upon enactment of SOX.
  • April 24 – The House passes H.R. 3763 by a vote of 334-90.
  • June 15 – Arthur Andersen, Enron’s accounting firm, is found guilty of obstruction of justice for instructing employees to destroy documents related to its audit of Enron. In 2005, the Supreme Court will overturn the conviction due to flawed jury instructions—but it will be too late for any meaningful revival of the firm.
  • June 25 –WorldCom Inc. says it overstated earnings for the past five quarters by more than $3.8 billion, a fraud uncovered by internal auditors carrying out a secretive investigation. A special investigative committee of the WorldCom board will later find that the company inflated its assets by around $11 billion.
  • June 25 – The same day, Sen. Paul Sarbanes, D-Md., introduces the Senate version of SOX, the Public Accounting Reform and Investor Protection Act (S. 2673).
  • July 15 – The Senate passes Sarbanes’ bill 97-0.
  • July 21 – WorldCom files for Chapter 11 protection, exceeding Enron’s as the largest such filing in history. (It will lose the title in 2008.)
  • July 24 – A conference committee working to reconcile the House and Senate bills approves a final bill, The Sarbanes-Oxley Act of 2002, which both houses vote through unchanged the next day.
  • July 30 – President Bush signs SOX into law.
  • Aug. 31 – On the heels of its conviction, Arthur Andersen surrenders its CPA license.
  • Oct. 25 – Founding board members of the PCAOB are appointed to staggered terms.