"The smartest guys in the room" -- and their competitors -- now look pretty dumb.


former top executives are headed to prison for deceiving investors who once believed they ran a legitimate business. A jury found both Kenneth Lay and Jeffrey Skilling guilty of securities fraud on Thursday, nearly five years after the company collapsed into bankruptcy and dragged an entire industry down with it.

Back then, the company loved to brag about its "asset-lite" energy trading strategy and to deride utilities that stuck to more traditional plans. But in December 2001, Enron flamed out in one of the biggest corporate scandals ever. And since then, many of Enron's former trading partners have disappeared as well.

Mirant, like Enron, went bankrupt. So did Calpine, although that company simply relied on traders rather than acting as one itself. It borrowed huge sums of money to build a massive fleet of gas-fired power plants during the energy-trading boom, making a costly misplaced bet that demand for its product would be almost infinite.

Meanwhile, other former trading giants have survived without regaining their former glory.



almost bought Enron as Enron spiraled toward bankruptcy but backed out of the deal and, a year later, almost wound up bankrupt itself. It exited the trading business and now looks like a shell of its former self.


(WMB) - Get Report

barely averted bankruptcy that same summer. It has fared better than Dynegy after winding down its trading operations, too, but still lacks its former might.


( ILA) has shrunk even more. It simply wants to be the sort of safe and boring utility that Enron used to mock.

"All of these companies had risk models," recalls Harry Chernoff, a partner at Pathfinder Capital Advisors. "I remember sitting in a meeting where Aquila said their model guaranteed they couldn't lose. But that only works as long as you have a smoothly functioning market with no surprises. ... None of the companies that went overboard with aggressive marketing and trading have recovered to the point where they are the same as they were before."


El Paso

( EP) looks more humble than it did. The company nearly lost its entire board of directors -- following one of the biggest proxy fights in history -- before it completely overhauled its strategy and regained some of its footing.


Duke Energy

(DUK) - Get Report

, one of the more respected names in the business, paid a steep price for its trading habits. Only with the help of a brilliant CEO, famous for his turnaround skills, did the company manage to overcome its past mistakes and move on.

In the meantime, the "stodgy" utilities that Enron liked to criticize have fared quite well. A couple of them, like


( CEG) and


(ETR) - Get Report

, still run successful trading operations. However, Chernoff says, those companies operate far differently from the way the Enron crowd did. Notably, he points out, they trade around real assets with clear access to the transmission lines they need to deliver their energy and make good on their promises.

Enron, he suggests, did just the opposite.

"This is a whole lot different than just setting up a trading room and saying we're smarter than everybody," Chernoff says. "It turned out, with Enron, that wasn't the case."