Table: Games Enron Traders Played
MISMARKING TO MARKET
Traders made unrealistic assumptions about future commodity prices so that their deals would look more profitable and their bonuses would be bigger.
CREATING SLUSH FUNDS
Many also stashed some money from profitable trades in "prudency" accounts, which they could draw on to cover bad trades. That made results look less volatile.
Through the use of complex financial instruments known as swaps, trading desks shifted profits from deals forward or backward in time to smooth earnings.