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Conflict of interest
A conflict of interest has been at the centre of the Enron bankruptcy and the sub-prime crisis.
- In the case of Enron it was the company auditors who had a conflict of interst - auditing the companies finicial accounts while at the same time making massive profits from consultancy from Enron.
- In the case of the sub-prime crisis it suggested that it is the credit rating agency who took fees from the sub-prime lenders for rating the risk. Thus the accusation being made against the credit rating agencies is that the more they got paid the higher they rated the debt e.g. AAA.