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Andrew Fastow      

Former CFO of Enron & Expert on Financial Ethics

Mr. Andrew Fastow was the Chief Financial Officer of Enron Corp. from 1998 – 2001. In 2004, he pled guilty to two counts of securities fraud, and was sentenced to six years in federal prison. He completed his sentence in 2011, and now lives with his family in Houston, Texas. Mr. Fastow currently consults with Management, Directors, Attorneys, and Hedge Funds on how best to identify potentially critical finance, accounting, compensation, and cultural issues.

His training sessions focus on risk in the “gray area”, where decisions that may technically be allowed give rise to risks that are not being properly considered. He helps attendees to better understand the limited role of auditors and attorneys, how technically correct but ethically-challenged decisions may be interpreted by the “market”, and the steps that they can take to become more “self-aware”, so that attendees can better identify, price, and manage these risks.

Mr. Fastow is the only Enron executive that has taken full responsibility for his actions, and he has repeatedly and publicly expressed remorse. In addition to serving his prison sentence, Mr. Fastow forfeited far more money than he ever earned at Enron. He is credited with being the individual most responsible for helping to recover $6 billion for Enron shareholders.

Speech Topics

Unbiased: How to Manage Risk in the Gray Zone

We live in the Age of Corporate Disasters. From Enron to the financial crisis to Purdue Pharma, J&J, 3M, General Electric, Boeing, and Silicon Valley Bank today, and hundreds of companies in between, seemingly great and iconic companies have been harmed or destroyed by self-inflicted wounds. What has changed? Are we worse at Compliance? Are we less Ethical? Has Culture changed so significantly? The leaders at these organizations did not set out to do harm; their challenges arose from an inability to lead their teams through and to the right decisions in the Gray Area – that place where creative application of complex and ambiguous rules allow us to get to a technically correct answer that may be the wrong answer. The Gray Area is where leadership is needed most, but it is the area where leaders have the least amount of training.

Andy Fastow spent five years in prison thinking about his role as CFO at Enron. He is now a sought-after public speaker and he consults with Boards of Directors on ways to help leaders better identify, price and manage these unseen Gray Area risks in their businesses (and in their lives).

Rules vs Principles

Ethics is understanding the difference between what is right to do and what you have the right to do.

Fraud examiners, Auditors, Regulators, and Compliance experts look for “fraud”, but fraud is a narrowly defined term. Usually, these experts look for embezzlement, bribery, and the forging of incorrect financial entries. In other words, these experts look for employees who are “breaking the rules”. However, a majority of what is determined to be fraud “after-the-fact”, were actually decisions made by employees who believed they were “following the rules”.

The “traditional” definition of fraud does not include a very significant component of fraud, namely “loopholes”. Loopholes, simply stated, are contrived structures that technically adhere to a rule (or at least obtain an opinion attesting to technical compliance), but that contravene the purpose, or principle, of the rule.

Beginning in the 1980’s, there were two major systemic changes that gave rise to the “loophole” industry. The first was the advent of “structured finance”. The second was the explosion in the complexity of accounting, tax, and securities regulations. An industry comprising accountants, bankers, lawyers, and financial consultants arose to create financial structures that exploit this complexity, enabling companies to alter reported financials and to avoid taxes, all while “technically” complying with rules and regulations. Business executives now have at their disposal, an array of “legal” weapons that can fundamentally alter the appearance of their company’s financial condition.

When is it acceptable to engage in a transaction that technically complies with the rules, but that may be misleading? Can a transaction that technically complies with the rules be considered unethical or illegal? Is it ever appropriate to depart from GAAP or IFRS? Mr. Fastow will cite examples of such transactions at major companies, he will discuss the rationalizations made by executives to justify their decisions, and he will discuss examples of how these decisions can cause great harm to stakeholders. He will make suggestions of questions that Regulators, Auditors, Fraud Examiners, and Directors might ask in order to ensure that their companies not only follow the rules, but also uphold the principles behind them.

Finally, the former Chief Financial Officer of Enron Corp. will discuss his own story, and he will describe how he made such profound mistakes.  


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Fastow, speaking on business ethics, quipped that his time in Dublin was bringing back memories. “I haven't been in front of this many lights and cameras since ...
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Few people know this better than Andy Fastow. Mr. Fastow was sentenced because of his role in the bankruptcy of the energy giant Enron Corporation.
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Andy Fastow, the ex-CFO of Enron, explained why Apple has more in common with his bankrupt company than people think.

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