How rich is Andrew Fastow?
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Fastow was among the key figures on the other side of the complicated web of off-balance-sheet special purpose entities (limited partnerships which Enron commanded) used to hide their huge losses. Deregulation in the US energy markets in the late 1990s provided Enron with commerce opportunities, including purchasing energy from low-cost companies and selling it at marketplaces with floating costs. Andrew Fastow was comfortable with the marketplace and educated in how you can play it in Enron’s favor. Skilling, jointly with Enron founder Kenneth Lay, was always concerned with various manners in which he could keep firm stock price up, despite the true financial condition of the business. Fastow designed a complicated web of firms that just did business with Enron, with the double purpose of raising cash for the firm, and in addition concealing its huge losses within their quarterly balance sheets. This essentially enabled Enron’s audited balance sheet to seem debt free, while in reality it owed more than 30 billion dollars in the peak of its own debt. While presented to the external world as being independent things, the funds Fastow created were to take write downs off Enron’s books and guaranteed to not lose cash. Yet, Fastow himself had a personal financial stake in these types of funds, either directly or via a partner. Fastow made tens of countless dollars defrauding Enron this way, while also ignoring fundamental fiscal practices including reporting the ‘cash on hand’ and total liabilities. Fastow forced a few of the biggest investment banks in America, including Merrill Lynch, Citibank, yet other people to put money into his funds, threatening to cause them to lose Enron’s future company if they didn’t.