Joe Nocera in the Lakeland Florida Ledger:
This week, The New Yorker ran an article by Mr. Gladwell, entitled “Open Secrets,” that the author describes on his blog as “my semi-defense of Enron.” No kidding. The article opens, rather poignantly, with the scene of the former Enron chief executive Jeffrey K. Skilling — “a pillar of the Houston community”— receiving a harsh 24-year sentence last October for his role in the Enron fraud, “one of the heaviest sentences ever given to a white-collar criminal.”
From there, Mr. Gladwell goes on to make the argument, provocatively, of course, that the Enron debacle was always hidden in plain sight. The signs were there in the company’s financial disclosure documents. Yes, they were complicated and convoluted, but if you knew what to look for, you could, at the very least, sniff out the fact that Enron was a company with lots of problems.
He dismisses the notion that “senior executives,” including Mr. Skilling, withheld critical information from investors. The problem, Mr. Gladwell concludes, is that the potential receivers of that information, the investing community, primarily, either didn’t know how to dissect Enron’s financials or couldn’t be bothered. Thus, the Enron scandal was as much the fault of investors as it was any Enron executive now in prison.
More here. [See the Gladwell (shown in photo above) article here.]