Few business stories include a cast of characters ranging from Bal Thackeray, head of an extreme Hindu nationalist party, to both of the Bush presidents, and take in everything from the 2000 California blackout to power barges off the Nigerian coast. Yet those are only some of the subplots in the story of the Enron Corporation, which at its height was the seventh largest corporation in America, and which had seemingly invented entirely new ways to make money. For a time, its vision enthralled Wall Street and its rise seemed to embody the limitless possibilities of the late-1990s stock market boom.

The end of that story, which is still unfolding, is well-known: a series of indictments and investigations; the largest-ever American corporate bankruptcy; the destruction of Arthur Andersen, America’s oldest accounting firm; and the loss of savings and jobs of thousands. What is left of the Enron story, aside from the lawsuits, is lingering bewilderment about the company’s spectacular rise, and the reasons why it seemed for so long to be immune from criticism.

“Enron: The Smartest Guys in the Room,” a new documentary by award winning director Alex Gibney, is based on the book of the same name by Bethany McLean and Peter Elkind, both reporters for Fortune. McLean was among the first to question Enron’s endless series of stellar quarters, in an article that simply asked how Enron made its money. Those curious to unravel the company’s mystery might want to pick up “Conspiracy of Fools” (Broadway Books, 768 pages, $26), by New York Times reporter Kurt Eichenwald.

Mr. Eichenwald presents the story as a drama that approaches Greek tragedy. The tragedy at Enron was that it was “filled with people smart enough to know how to maneuver around the rules, but not wise enough to understand why the rules had been written in the first place.” Both Mr. Eichenwald and Mr. Gibney continue a long American populist tradition of fascination with the rise of those who have seemingly beaten the odds, and their demise as those odds catch up with them.

Mr. Gibney tells the story primarily through interviews with Ms. McLean and Mr. Elkind and a handful of former Enron employees, and from generous excerpts from internal e-mail, corporate videos (which are devastating), and the testimony that CFO Jeff Skilling and others gave before Congress, combined with an apt soundtrack. (He uses Sinatra’s “Black Magic,” for example, to describe Enron’s accounting.) These excerpts effectively show the arrogance and dysfunction of some employees, especially the energy traders, who gleefully cheered on the California blackout as they siphoned power away from the state, only to bring it back for the right price.

Enron began as a traditional power company: It purchased gas, and it sold gas. It owned pipelines and plants. It was as far away from the quasi-financial-services company it became as could be imagined. Yet it did not take long for Enron to become the poster child for the new economy, in which ideas counted for more than results.

Even before the 1990s, the company had exhibited an appetite for questionable transactions. When the possibly fraudulent activities of two traders was brought to the attention of Kenneth Lay, Enron’s CEO, in 1987, the problem was quietly shoved under the rug. By the time Lay finally fired them, the traders had subjected Enron, then a fledgling company, to almost $1 billion in losses. The company got out of that disaster relatively unscathed, but didn’t learn its lesson.

The first step in the company’s transformation came in 1990, when Mr. Skilling, who had done work for Enron while a consultant at the blue-chip firm McKinsey & Co., came on board as chairman of the company’s finance division. Mr. Skilling had developed, two years earlier, the concept of a “gas bank,” which would change Enron’s business. He reconceived Enron’s gas business from a commodity to a security, which could be traded like any other stock or bond.

The idea was brilliant, but one further step was needed. To capture its profits immediately, Enron needed to record its gas deals as securities, not old-fashioned gas contracts, which traditionally paid out over time. This change was approved by regulators in 1992, and Enron was immediately vaulted into an entirely new business world. The company was poised, a few years later, to take advantage of the soaring stock market and glowing analyst reports to become the market’s new darling.

But the new accounting also meant that Enron did not always have cash on hand, and its condition was always more precarious than it let on. From 1992, as both Mr. Gibney and Mr. Eichenwald recount, the deals got more complex and arcane as energy trading replaced the business of building plants and pipelines. Enron groaned under the losses, until the third member of the management team, Andrew Fastow, arrived on the scene as the chief financial officer.

Young and eager to please, Mr. Fastow came up with the now-infamous “SPEs,” or Special Purpose Entities. The SPEs, with colorful names like “Raptor” or “Chewco,” handily moved losses off of Enron’s books; at the same time, the SPEs served as a slush fund for Mr. Fastow, who was paid millions of dollars for basically trading with himself. Banks and investment firms lined up for a piece of the action; no one wanted to be left out of the lucrative fees Enron was providing, so top-tier institutions paid whatever Enron needed into these shell companies.

While Mr. Gibney sharply criticizes the culture at Enron that allowed fraud to flourish, the movie is less effective in supporting its attacks on “deregulation” as the source of the Enron debacle. It is too easy to say that the Enron scandal occurred because Mr. Skilling and Mr. Lay were free market devotees.

A better explanation lay in the confluence of events that allowed an Enron to emerge, combined with greed and the lack of a moral compass that characterized some of the players. Common opinion had it that an Enron could not occur because of the auditors, lawyers, analysts, and bankers who supposedly monitored the market. But before the recent corporate reforms and stepped-up regulatory actions, these gatekeepers were more interested in protecting fraud against themselves than serving generally as watchdogs for the average investor or Enron employee. Even when people did raise more general questions about what Enron was doing, quick talk and market momentum was usually enough to put them off.

Enron is in many ways the quintessential American story. It joins a rags-to-riches tale of a company and its founders (Mr. Lay, for example, was a preacher’s son from the Midwest) to a Gatsby-esque fall from economic and political grace. It also has a lot of lessons to teach as American corporate culture recovers from the shock of a chain of disasters, of which Enron remains the most resonant.

Mr. Russello last wrote in these pages on Tammany Hall.