Why was Andrew Fastow’s control of some Enron special purpose entities a conflict of interest?

Andrew Fastow’s control of special purpose entities (SPEs) created a significant conflict of interest because he served as both the Chief Financial Officer of Enron Corporation and the manager of the partnerships used to hide the company's troubled assets.1

By using these SPEs as "dump sites" for Enron’s underperforming operations, Fastow was able to keep significant losses off the company’s official books. This practice allowed Enron to present a misleading picture of its financial health to investors, creating the illusion of higher profits while concealing the severity of its actual debt. Because Fastow held a fiduciary duty to the company while simultaneously profiting from or managing the entities used to manipulate its financial statements, his actions constituted a fundamental breach of ethical standards and corporate governance.1