Switching the Light On

The crisis with Enron was crucial in predicating the specific formula for disaster capitalism recently demonstrated. Although a seperation of commercial and investment banking would be beneficial, a critique of all the components of the economic cycle need not be spared. The auditors, accountants and restructuring element have a large role to play in the value of investments and the yield/return on share price, whether valued falsely or not. And they have made tens of millions from this crisis, while the real economy has faltered. I wish I had listened carefully in my A Level politics lectures about the danger signals and complexities of Enron, particularly of the significance of the accountants Arthur Andersen in liquidating a major company to make big money from the outset. If this crisis of capitalism has taught me anything, it is to keep a fine eye on the details of business practice, political policy and the demand for a regulatory framework that brings to an end the speculative practice. But the investors who were victims in the Madoff scandal are now taking pwc to court, and the same consequences may reach kpmg as well.

http://www.telegraph.co.uk/finance/6074118/Madoff-victims-to-sue-accountants-PwC-over-feeder-fund-audits.html

http://en.wikipedia.org/wiki/Enron_scandal