Sherron Watkins is the former Enron Vice President who wrote a now infamous memo in the summer of 2001 to then-CEO Kenneth Lay warning him about improper accounting methods.
At the time, Enron was one of the largest corporations in the U.S. and a giant in the energy-trading and utilities field. Fortune had named it “America’s Most Innovative Company” for six consecutive years. However, Watkins’ memo revealed that the company’s finances were sustained by systemic accounting fraud and corruption.
Enron was forced to declare bankruptcy in late 2001, and she was called to testify before both the U.S. House of Representatives and Senate about the accounting irregularities that she had found in the financial statements.
As news broke publicly about the memo in early 2002, it came to light that that the company had sought legal advice about firing her almost immediately after her initial meeting with Lay.
She maintains that she is the “only whistleblower in any kind of modern history that has a positive story” because Enron imploded before the company had time to pursue its retaliatory plans. For her whistleblowing, she was named one of Time’s Persons of the Year in 2002.
Her story also had far reaching policy implications. It highlighted the glaring lack of protection for Wall Street whistleblowers and became one of the driving forces of the Sarbanes-Oxley (SOX) reforms. SOX ultimately laid the groundwork for Dodd-Frank years later, one of the most important whistleblower laws in recent U.S. history. Her impact cannot be overstated.
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Watch the video of her speech here: