Watkins was selected as one of three "Persons of the Year 2002" by Time magazine, alongside two other whistleblowers, Cynthia Cooper of WorldCom and Coleen Rowley of the FBI. The story mentions how the whistleblower Sherron Watkins helped expose accounting fraud at Enron, which led to passage in 2002 of the Sarbanes-Oxley Actthe subject of a panel discussion during this month's Leadership and Ethics Week at the Business School. I probably said too much for his comfort, Kaminski said. Lay responded by asking a few top executives to look into the allegations, and in return, they told him there was nothing to worry about. They did pretend they were doing a thorough investigation with me.. Id add one more uniqueness about Ms. Watkins that was lacking in all the other individuals who have chosen to come before this committee to stop the bleeding at Enrona moral compass, he said. As a result, Enron declared bankruptcy, thousands of people lost their jobs, and employee retirement accounts were decimated. They say that honesty is the best policy. 4 What is Sherron Watkins biggest regret? 1 What happened to Sherron Watkins after Enron? Lay died in July 2006 while vacationing in his house near Aspen, Colorado, three months before his scheduled sentencing. There was, however, one problem. Above all else, she knew the difference between right and wrong. Thousands more lost their jobs when an accounting firm collapsed as a result of the scandal. The company projected that Broadband would produce revenues of $54 billion in 2000 and $280 billion in 2001. The catch all: if you dont want your mother to find out about it, you should do something.. Save my name, email, and website in this browser for the next time I comment. In 2002, she was named Person of the Year by Time magazine for her honesty and convictions. Listen to article. Watkins was vindicated when a congressional staffer found her memos to executives about the fraud she had uncovered. The cover of the magazine read simply, The Whistleblowers. The article described the honesty, courage, and character exhibited by these three women. She didnt report what she knew directly to the government in hopes Enron executives would report it themselves, but later she was interviewed by the SEC and the Justice Department for their investigations into Enron and testified at congressional hearings. Watkins was selected as one of three Persons of the Year 2002 by Time magazine, alongside two other whistleblowers, Cynthia Cooper of WorldCom and Coleen Rowley of the FBI. The fast-paced lifestyle was a lot of fun for a young, single woman, but when she entered her mid-thirties, she decided it was time to return to Texas and settle down. Watkins shared her Time Person of the Year award with two other honest citizensColeen Rowley of the FBI and Cynthia Cooper of WorldCom. I think I had a duty to act to the best of my abilities and voice my concerns, the mathematician and economist said of his criticisms, including an Oct. 2, 2001, e-mail to an auditor at Arthur Anderson, Enrons accounting firm. Almost 5,000 employees were fired without warning. She sounded the alarm, advising the captain that the ship is sinking. She joined New York-based MG Trade Finance in 1990 to manage their portfolio of commodity-backed finance assets until October 1993. In June 2000, Watkins went to work for Enron Broadband Services. the Enron Corp. executive who warned management about fraud, said not having confidentiality and protection for whistleblowers can have a cost. The full impact of this dramatic drop was felt by thousands of Enron employees and retirees, including Charles Prestwood. Sherron wasnt just raised in a small townshe had small town values, too. She testified at a congressional hearing alongside Skilling the next month. [2] Watkins was represented by Houston attorney Philip H. Hilder. Two years later his team, which had been moved from risk assessment to Enrons trading division, was asked to assess the value of financial structures known as Raptors. We are continuing to have strong growth in our businesses. He even tried to recruit new investors, saying, My personal belief is that Enron stock is an incredible bargain at current prices. He made this statement about the same stock that he was selling as fast as he couldand making millions of dollars in the process. Watkins was called to testify before committees of the U.S. House of Representatives and Senate at the beginning of 2002, primarily about her warnings to Enron's then-CEO Kenneth Lay about accounting irregularities in the financial statements. Why is the Definition of done so important to an agile team? Sherron Watkins, If you continue to use this site we will assume that you are happy with it. He said his then-boss, trading division head Greg Whalley, gently pushed him from the podium. A judge vacated those convictions since Lay died before he was sentenced. After she uncovered the truth the company of Enron got better. Andersen had won lucrative, non-audit consulting work from Enron, and would not want to jeopardise the. For that and for the courage of her convictions, Time honored her as Person of the Year for 2002. Former VP Sherron Watkins is known as the whistleblower who warned of impending implosion. Even worse, the accounting firm charged with overseeing Enrons finances also gave its okay. Everything in her life was going well, until she began to uncover the unethical accounting practices at Enron. She spent eight years at Andersen in both the Houston and New York offices. It never dawned on me that Lay would not go down to the bottom of the ship, says Watkins. Sherron learned that questioning authority by reporting wrongdoing could result in positive change. New York was an exciting place for a young professional. People found out and demonstrated their support by emailing her, leaving voice mails, and even people around the world would contact her. Character Development & Leadership, 7752 Clearwater Court, Williamsburg, MI 49690. I shouldnt have gone by myself, she said. Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. The cookie is used to store the user consent for the cookies in the category "Other. Its up to them to do the right thing.. Watkins wondered how that could be. What did Sharon Watkins warn Ken Lay about? Watkins said she remembers the meeting she had with Enron founder Ken Lay. Watkins did not inform the police of what she uncovered, but she did take her concerns straight to the top. Telling the truth regardless of the circumstances or consequences . Watkins became one of the main witnesses in an investigation that led to dozens of convictions and massive changes in how corporations are allowed to do business. Character Education Curriculum for High Schools, Character Education Curriculum for Middle Schools, Character Education Curriculum for Alternative Education, Social-Emotional Learning (SEL) Curriculum, Traditional Classroom Curriculum Training, Andrew Whitworth: The Importance of a Positive Role Model, The Importance of Acknowledging Mental Health. Religion was a large part of Sherrons daily life. She testified before Congress and during the trials of fellow Enron officials, including Ken Lay. Watkins also discovered the Jason deals that kept hundreds of million of dollars off the books. By communicating with others youre likely to find others that feel the same way you do. Sherron Watkins was Vice President of Corporate Development at Enron, a Houston-based energy company that grew to employ 20,000 staff and claimed revenues of over $100 billion in 2000 before its collapse in 2001. That was the case at Enron Corporation, where Watkins served as a vice president. In less than a year, thousands of people lost their income, their health insurance, and their retirement funds. One executive personally made over $33 million from selling stock in a span of just eight months. If current whistleblower protections had been in place at the time, she said she would have been able to report her concerns to the Securities and Exchange Commission while keeping her name confidential. I would have remained anonymous, stayed employed, Enron would still be alive, she said. In fact, Lay was so astonished by this reaction that he launched a full-blown investigation. After she uncovered the truth the company of Enron got better. Enron. Watkins said her concerns were initially dismissed. Watkins was surprised to find people ignoring the truth. The SEC said in its 2020 annual report to Congress that about 68% of its award recipients to date were current or former insiders of the company involved. When Enron filed for the largest bankruptcy in history on December 2, 2001, many Americans suffered enormously. Executives also began inflating the cost of the companys assets. "And 5,000 people get dumped on the street with nothing., 5000 people get dumped on the street with nothing. Houston-based #Enron famously collapsed 20 years ago today. Watkins met with Lay four months before the company went bankrupt . Ms. Watkins, now living near Austin, Texas, still gives speeches about Enron and on the warning signs of bad organizational culture. In Watkins situation, the crimes she uncovered were being committed by people who wielded a lot of power and could fire her if they chose to. Questionable accounting practices were used routinely but not questioned as long as it was good for business. She joined Enron in 1993, and departed in November 2002. People found out and demonstrated their support by emailing her, leaving voice mails, and even people around the world would contact her. However, if she did nothing and let the situation continue, she could be considered guilty by association. On one occasion, earnings of $70 million disappeared, only to reappear in the next fiscal period. "I am incredibly nervous. A Wall Street analyst later said that Enron was flunking the smell test the numbers just did not add up. By clicking Accept All, you consent to the use of ALL the cookies. For extra money, she worked as a cashier at her uncles supermarket. The former Enron executive who privately warned company founder Kenneth Lay of impending financial doom in the fall of 2001 had another critical meeting with him Wednesday as well as with former Chief Executive Jeffrey Skilling, a jury and a phalanx of lawyers in their fraud and conspiracy trial. The Wall Street Journal news department was not involved in the creation of this content. Sherron Watkins is the Enron vice president who wrote a letter to chairman Kenneth Lay in the summer of 2001 warning him that the company's methods of accounting were improper. Sherron Watkins was an Enron executive who tried to warn Chief Executive Officer Ken Lay the company's books were being manipulated. What happened to Sherron Watkins after Enron? All Rights Reserved. Washington DC, 20006, Anonymous Russian FSB Letters Reveal Internal Turmoil in the Kremlin Part 2, AOL: Appeals Court Strikes Down Part of NC Ag Gag Law, Protects Undercover Investigations, Animal Legal Defense Fund: Fourth Circuit Enjoins North Carolina Ag-Gag Law, Press Release: Leading Whistleblower Protection Organization Applauds Court of Appeals Ruling Enjoining North Carolina Ag Gag Law, Anonymous Russian FSB Letters Reveal Internal Turmoil in the Kremlin Part 1. She believed that if he knew what she had uncovered, he would remedy the situation and save the company. He felt just as strongly at an Oct. 22, 2001, meeting of Enron executives, headed by Lay. In her letter, she laid out the evidence and warned him, I am incredibly nervous that we will implode in a wave of accounting scandals. She wanted assurances that he would investigate her findings and make appropriate changes. Published on February 19, 2004 by Sean Flynt. She joined New York-based MG Trade Finance in 1990 to manage their portfolio of commodity-backed finance assets until October 1993. Vinson & Elkins found no reason for concern other than a public relations risk. According to records, Enron was paying the firm close to $100 million per year for its services. But then again, my daughter probably felt like I was a stay-at-home mom able to go to all of her school events, sporting events and was always there. Watkins demanded honesty from her employer. Pay attention to what the CEO says. Some cancelled surgeries or could no longer afford to take their prescription drugs. He is serving a five-year prison sentence, and prosecutors said Wednesday he is expected to testify against Lay and Skilling next week. Watkins still visits Houston on occasion but now works as, among other things, a Texas State University professor. Campbells Soup Sales Were Declining. 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