How To Prevent An Enron Lawsuit
The tale of how one of the largest American corporations in the late 90s became a laughing stock for accounting and corporate fraud serves as a cautionary example for all. The Enron scandal shows how a “successful” Fortune 500 company ended up filing for bankruptcy while battling multi-million lawsuits.
This article will cover key takeaways from the Enron scandal and the steps you can take to sue for fraud in the workplace.
Enron: Lessons Learned
Here are three solid lessons you can learn from Enron’s misfortunes:
1. If you see something, say something
The biggest take from Enron’s corporate fraud is the fact that thousands of people suffered due to the crimes of a few. 20,000 Enron workers were laid off and lost medical insurance and their pensions. On the other hand, investors lost over $60 billion dollars when the share price decreased to $0.26 at bankruptcy.
Former Enron VP, Sherron Watkins’ anonymous memo warning the late Enron chairman, Kenneth Lay, of accounting discrepancies, was the first and only piece of evidence that showed someone within the company tried to speak up.
Whistleblowing should never be a strenuous process thanks to the availability of anonymous complaint services for today’s employees.
2. Corporate lies have short legs
Enron falsely covered up and inflated its financial earnings using non-GAAP reporting formats. As a result, five years’ worth of massive depreciation losses were hidden from the public.
The lid was blown open in a single day and Enron’s stock value fell from over $90 to less than $1 in late 2001.
3. Fraud has many friends
Most corporations will keep violating the law with the support of others – as long as they don’t get caught.
Enron was able to pull off a stunt for six consecutive years all while filing taxes, conducting external audits, and reporting to the SEC. The scandal revealed the many gaps in regulatory bodies and led to the US passing the Sarbanes – Oxley Act in 2002.
Preventing Enron In Your Workplace
In today’s corporate world, there are several steps you can take to report corporate and accounting fraud:
Report Suspicious Manager Behavior
If a manager assigns you tasks that are shady in nature or asks you to keep questionable actions confidential, you should report such behavior to your HR department or an external reporting service.
Alternatively, you can also report to external bodies like:
- The Internal Revenue Service (IRS) for all tax-related illegalities
- The Better Business Bureau (BBB) for general anti-progressive business practices
- The Occupational Health and Safety Association (OSHA) for business practices that predispose workers, customers, and shareholders to risks.
- The Equal Employment Opportunity Commission (EEOC) for any form of workplace harassment or discrimination
- The Security and Exchange Commission (SEC) for discrepancies in accounting reporting and other financial metrics
If doing the above puts you at risk of facing hostility or retaliation, you can use anonymous reporting websites to send in your complaint. In addition, the US government offers an extensive whistleblower protection policy for employees likely to suffer as a result of speaking up against their company’s bad practices.
Take Legal Action
Legal avenues like civil or criminal lawsuits are a great way to get your employer to make the needed changes. They can also be a source of monetary compensation for you, especially if you opt to sue in small claims court.
How To File A Fraud Complaint In Small Claims Court
If you are looking to claim up to $10,000 while getting your company to make the proper changes, suing in a small claims court is right for you. All you need to do is:
|Gather evidence||You need to collect all evidence that will support your claim(s). Receipts, account records, sales records, and call and mail conversations all count as long as they validate your claim.|
|File your claim in small claims court||A small claims court may require a small fee to get your complaint registered. Find out the filing fee cost and other requirements with your local county clerk.|
|Serve your company your claims||After filing, copies of the court forms should be mailed to the company. In return, you or the clerk should receive proof that the company received the papers.|
|Prepare for the court date||Small claims court does not require you to hire a lawyer.
If you do not wish to hire one, make sure to be prepared and have a script on hand.
Suing for Fraud With DoNotPay
Thanks to DoNotPay, you don’t need to resort to sticky notes to report corporate fraud. DoNotPay can help you with your anonymous complaints, small claims lawsuits, and other needed guidance along the process. All that is required is for you to:
- Go to DoNotPay and select the Sue Now product
- Enter the amount of compensation you seek
- Select whether you need a demand letter, court filing forms, or a script
- Describe the reason for the lawsuit and submit any applicable evidence
After you’re done, DoNotPay will automatically generate whatever document you need to help you with your small claims case. Want to save a trip to the post office? The robot lawyer will also mail a copy of your demand letter to the company you are suing on your behalf.
Companies You Can Sue With DoNotPay
Fighting for justice has never been easier. With DoNotPay’s Sue Now product, you can claim compensation from individuals and companies who have wronged you! Here are some large companies DoNotPay users have sued with the trusty Robot Lawyer: