In an age of increasing financial complexity the “disclosure paradigm” – the idea that the more a company tells us about its business, the better off we are- has become anachronism. An act attributing a custom, event, or object to a period to which does not belong. Its what Enron did with their SPE’s special-purpose entities.

“An SPE works something like this. Your company isn’t doing well; sales are down and you are heavily in debt. if you go to a bank to borrow $100 million, it will probably charge you an extremely high interest rate, if it agrees to lend to you at all. But you’ve got a bundle of oil leases that over the next four or five years are almost certain to bring in $100 million. So you hand them over to a outside investors. The bank then lends $100 million to the partnership gives the money to you. That bit of financial maneuvering makes a big difference. This kind of transaction did not (at the time) have to be reported in the company’s balance sheet. So a company could raise capital without increasing its indebtedness. And because the bank is almost certain the leases will generate enough money to pay off the loan, it’s willing to lend its money at a much lower interest rate. SPE’s have become common place in corporate America.” – Malcolm Gladwell – What the dog saw