Kenneth Lay formed Enron in 1985 by merging two natural gas pipeline companies. Enron grew to become one of the largest electricity and natural gas companies in the world. However, Enron used accounting loopholes and off-balance sheet entities to hide billions in debts and inflate profits. When this was uncovered in 2001, Enron's stock price collapsed and the company declared bankruptcy, resulting in billions lost for shareholders and employees. The Enron scandal exposed widespread accounting fraud and corruption and shook confidence in corporations.