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Gold/Mining/Energy : Enron - Natural Gas Industry -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (260)	10/19/2001 1:48:36 PM
From: Glenn Petersen	Read Replies (2) \| Respond to of 1433

The Five Dumbest Things on Wall Street This Week By K.C. Swanson Staff Reporter 10/19/2001 06:59 AM EDT rd.yahoo.com*http://www.thestreet.com/_yahoo/markets/dumbest/10002661.html 5. Enron's Rabbit-From-a-Hat Style Analysts have complained for some time about Enron's (ENE:NYSE - news - commentary - research - analysis) rabbit-from-a-hat style accounting, with which the company produced results that wowed investors without making it quite clear where they came from. Now that its business has taken a sour turn, that tendency has gotten even more unsettling. To cap off its disappointing earnings results this week -- Enron posted a steep loss after taking a $1.01 billion charge -- the company let drop that its shareholder equity had decreased by $1.2 billion. In a conference call, CEO Kenneth Lay attributed the reduction in equity to the "removal of an obligation to issue a number of shares." According to a report in The Wall Street Journal, Enron repurchased 55 million shares issued through a series of transactions involving LJM Capital, a partnership that until recently was headed up by Enron's CFO. TSC's Peter Eavis has written that it appears Enron lent LJM money to buy Enron stock. Ironically, the company boasted in its earnings release this week that it had expanded reporting of its financial results, presumably to quiet its accounting critics. Enron's transactions have been so labyrinthine that it's hard to identify exactly if or how they were inappropriate. But the latest revelation, to say the least, does nothing to bolster the company's credibility. Enron, whose CEO resigned unexpectedly in August, had seen its stock fall 59% for the year leading up to its latest earnings release. Since then, it's dropped another 12.6%

To: Glenn Petersen who wrote (260)	10/24/2001 6:16:28 PM
From: opalapril	Respond to of 1433

Have no dog in this hunt, but FWIW my reading of the news leads me to think this is a very, very serious breach of duty. Shareholders lawsuits are not the least of the worries this company faces. If the facts as reported are true, it's not impossible to imagine criminal conspiracy charges being brought against whoever were principals in this scheme. That possibility, in turn, could queer ME&O insurance coverage and open up efforts to hold board members and others personally liable. Looks like the next annual meeting can be held jointly with the annual conference of the Securities Trial Lawyers Assn. (if there is such a thing).