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

To: ms.smartest.person who wrote (967)	11/30/2001 12:15:00 AM
From: James Calladine	Respond to of 1433

HOPEFULLY THEY WILL WALK THE TALK, NOT JUST TALK! SEC's Enron Probe to Be Swift, Thorough Pitt Says (Update1) By Neil Roland Washington, Nov. 29 (Bloomberg) -- Enron Corp.'s collapse will be investigated swiftly by the Securities and Exchange Commission, and the agency will prosecute anyone who illegally deceived investors, SEC Chairman Harvey Pitt said. The SEC will ``investigate the situation thoroughly but quickly and, if wrongdoing occurred, make sure that the people who were responsible for that will answer for it,'' Pitt told a meeting of the Consumer Federation of America, an investor advocacy group. Houston-based Enron is poised to file the largest bankruptcy reorganization in history after hometown rival Dynegy Inc. dropped plans to acquire the energy trader. Enron shares, which traded for as much as $84 in January, fell 25 cents today to 36 cents. Enron, which at the time was the largest energy trader, said last month that the SEC had opened a formal investigation into dealings with partnerships run by its former chief financial officer. Pitt's comments offered the government's first confirmation of the inquiry and what investigators are looking at. The SEC normally doesn't comment on active investigations. One issue under SEC review is ``the extent to which corporations disclose to shareholders information that can have a material impact on what the shareholder's equitable investment and interest is in the corporation,'' Pitt said today. Investigating Partnerships The SEC also is examining ``whether accounting principles that were applied were applied appropriately,'' he said. ``Hopefully, the commission will complete its work rapidly.'' Enron has said the SEC is investigating partnerships run by former CFO Andrew Fastow that traded the company's shares and assets. Enron's repurchases of 62 million shares from a Fastow partnership cost the company's shareholders $1.2 billion in lost equity. The company said earlier this month it overstated earnings by $586 million over four-and-a-half years, inflated shareholder equity by $1.2 billion because of an ``accounting error,'' and failed to consolidate results of three affiliated partnerships into its balance sheet. Responding to questions from reporters, Pitt said the SEC had limited ability to protect investors from losses. ``When a company loses market value, as opposed to investors being fleeced, the problem becomes much more difficult,'' Pitt said. ``Making investors whole in that situation is very, very hard.'' Congress to Investigate The SEC is considering ``how we can creatively come up with remedies that will be targeted toward making investors feel as if they are being given recompense for any wrongs committed.'' A bankruptcy filing by Enron would top Texaco Inc.'s record $35.9 billion case in 1987. Creditors would be lining up to claim what's left of the company's more than $61 billion in assets. The company's credit rating was downgraded to junk status yesterday. Senate and House committees said today they will investigate Enron's collapse and consider new regulations for electricity and natural-gas trading.