Enron's Lay may have misled on share price -Waxman
Saturday January 12, 7:24 pm Eastern Time
(UPDATE: Recasts, adds quotes from e-mails paras 9-11, 15-16)
WASHINGTON, Jan 12 (Reuters) - Enron Corp.(NYSE:ENE - news) Chairman Kenneth Lay may
have misled employees by telling them he expected the company's share price to go up just
weeks before it started to collapse, a high-ranking House Democrat said on Saturday.
Rep. Henry Waxman, a California Democrat, asked Lay to respond by Jan. 18 to a
series of questions involving e-mail messages ``you purportedly sent out to Enron
employees about Enron's financial condition and stock price in August 2001.''
Waxman, the senior Democrat on the House Government Reform Committee, had
already been seeking information about contacts between the White House and
the now-bankrupt energy giant Enron.
Waxman asked Lay to verify whether he sent the e-mails and if so, whether he was
aware at the time of Enron's ``financial vulnerabilities.''
``If it is true that you sent these e-mails, then it appears that you misled your
employees into believing that Enron was prospering and that its stock price would
rise,'' Waxman wrote.
Waxman also asked Lay to provide records of Enron communications assessing the value of Enron's stock price or
financial condition.
``I also would like to know about your decision to prevent participants in Enron's 401K plan from accessing their
retirement accounts and selling their plummeting Enron stock,'' Waxman wrote.
He said he received copies of the e-mails as part of his investigation of the collapse of Enron. His office released
the e-mails along with Waxman's letter on Saturday.
``As I mentioned at the employee meeting, one of my highest priorities is to restore investor confidence in
Enron,'' reads one e-mail, dated Aug. 8 and carrying a return address from ``ken.lay@enron.com''.
``This should result in a significantly higher stock price.''
The e-mail, whose recipient's name is blanked out, offers a stock grant of $36.88 a share.
Enron shares were at 67 cents a share on Friday.
But Waxman said that at the time the e-mail was sent, Enron's stock price was $37, and
``you had already sold $40 million
of Enron stock during 2001 and over $100 million since October 1998.''
Waxman noted that the price of Enron stock eventually fell to a low of 26 cents a share
on Nov. 30, 2001.
Quoting from another e-mail, Waxman said that on Aug. 14, ``the day that Jeffrey Skilling
resigned as (Enron) CEO, you stated, 'I want to assure you (employees) that I have never felt better about
prospects for the company.'''
``Our performance has never been stronger; our business model has never been more robust
; our growth has never been more certain; and most importantly, we have never had a better nor deeper pool of
talent throughout the company,'' the Aug. 14 e-mail reads.
``We have the finest organization in American business today.''
Robert Bennett, the Washington-based attorney for Enron, was not available for comment Saturday.
Several congressional committees are investigating Enron's collapse last year.
The bankruptcy and the political storm surrounding it has prompted President George W. Bush to
order a Treasury Department review of U.S. pension and
corporate disclosure rules.
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