The Enron Network

The Enron scandal was unveiled in the November 2001 and has underwent a large amount of examination ever since. Many questions arose asking how the public could have been so blindsided. While Enron’s stock continued to plummet from 2000 into 2001, Enron’s stockholders were encouraged to hold on to their stock and assured that the price would soon rebound. The stockholders were unaware of the network including chief executives, accountants, and insider traders that were benefiting from their losses. When the truth was finally brought to court, this network was a useful tool in defining those who were strongly connected. Similar to the tactic used by Kossinets and Watts, email was used to track these connections. A detailed network of this information was compiled by Jeffrey Heer and can be found at http://jheer.org/enron/v1/. Heer restricted his email connections to just the senders and the recipients, avoiding any other names listed within the email’s body. Also, only emails related to business or strategy were included. This created a refined set of concrete edges. While the “betweenness” value could be measured to locate the powerful nodes, Heer examined the links in a more global approach. He was more interested in the communities within the network than the single players. Thus, Heer used Newman’s algorithm for discovering the bounds between different groups within the company. This algorithm measured the quantity of links between communities against the expected number of links. The strength of this result was an indictor of the community structure’s strength. This type of analysis was of particular importance to the Enron situation where the community of those guilty was of central interest. Of course, this study does not guarantee a capture of all guilty persons, but it certainly was successful in identifying the larger communities of concern.

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