Amy J:Re HI! re: Buffett understand options probably about as well as he understands high-tech.
The $400MM emplyee stock options which were disclosed on the enron books had nothing to do with the fall of enron, and these "ESO's" were not "fraud" nor fraudulently issued.
The 12-18 Billion dollars worth of mostly Citcorp loans which were really to Enron which were hidden and not disclosed on the 10k was fraud. They were secured by stock issued to Citicorp through the use of rule 144, which allowed 12-18 Billion dollars worth of stock to be issued WITHOUT DISCLOSURE TO THE REST OF THE SHARE HOLDERS if they are issued TO A BANK!!.
The accountant "consultants" showed the company how to issue this stock without disclosure on the balance sheet and how to get it by the accountant "accountants" division of the same firm so that they would approve the balance sheet.
The broker subsidiary of Citicorp, I am informed and believe, sold this same enron stock to their depositors.
When word leaked out that the loans existed, Citicorp called the loans, foreclosed on the enron stock, dumped it on the market, got themselves paid.
Simultaneously, smithbarney recommended the stock to its clients, so they would buy it, and then, In my opinion, the bank shorted the stock as the client depositors found out about the loans and then sold their shares. Regards, Dukey U.
This ain't about whether Buffett understands high tech, he understands how to read a balance sheet, he could see the ESO's, he would have to, like me, understand how the rest of these transactions could be structured. And would want an explanation before he would invest in a company like that.
The congressional protestations of eso's is a smokescreen.
EOR
not ot because it is about stock options |
