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Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: Karen Lawrence who wrote (10)	1/14/2002 6:01:55 PM
From: Carolyn	Read Replies (1) \| Respond to of 3602

Thanks, Karen. I don't have a 401K so don't pay any attention to it. Was reading articles in our morning paper about some of the retired folks. This clears up a lot.

To: Karen Lawrence who wrote (10)	1/14/2002 6:05:11 PM
From: arno	Respond to of 3602

I was going to post that, but you beat me to it.

To: Karen Lawrence who wrote (10)	1/14/2002 6:13:35 PM
From: c.horn	Respond to of 3602

Plus they had over 20 plans to invest in. Which you don't hear on the news. Another thing I love hearing the talking heads complain about is that Lay was telling them the company's outlook was bright and sunny.. BFD!! What CEO doesn't say that when the ship is sinking? :)

To: Karen Lawrence who wrote (10)	1/14/2002 8:52:45 PM
From: KLP	Respond to of 3602

Thanks for posting that over here, Karen. Wonder when the media will actually print this.....??? Shall we all hold our breath?? From October 29, the first day of the temporary shutdown, through November 13, the first day participants could transfer funds, the Enron share price went from $13.81 to $9.98, a drop of $3.83. On five of those trading days, Enron’s share price closed below $9.98. Outside of the brief transition period, Enron employees have always been able to transfer their own contributions in the 401K, at any time. They have 20 investment options to choose from, Enron stock being one of them.

To: Karen Lawrence who wrote (10)	1/16/2002 4:03:36 PM
From: joseph krinsky	Respond to of 3602

I didn't know that, thanks for the info. I thought that they were restricted from selling at any time. I think that the SEC has some part in this, if they don't make sure companies do the right thing, why have them at all? To me, this is just a situation where a company was run by fraudsters. Trying to link them to politicians is pointless. All companies make contributions, and all politicians take them. Enron was in business for a long time, and they didn't just decide to become crooked last year. The accountants wouldn't have destroyed documents if they didn't implicate them. IMO because the securities laws are outdated and don't provide severe enough penalties, the fraudsters will continue to do their dirty work. The laws were written in 1933 and at that time the penalties were probably meaningful. They are not now. It is actually worth it to commit securities fraud today because the penalties are inadequate. They need to be rewritten to reflect modern times, (a 10,000 dollar fine in 1934 may have been substantial, but what does it mean today?)and the sec needs to hire more people. That won't stop fraud, but at least it will make it a lot more painful to do it, and by hiring more people, the sec will be able to ferret out more cases. Fraudsters assets should be treated the same way they treat drug violators assets, confiscation. Why should someone benefit from committing fraud?

To: Karen Lawrence who wrote (10)	1/16/2002 4:58:10 PM
From: CountofMoneyCristo	Read Replies (2) \| Respond to of 3602

Karen, I read your post. I have read some very different reports - for instance, that the "lockdown" period began far earlier, in August. Whatever the facts are in the end, it appears highly suspicious to say the least that Enron employees were barred from selling stock for any time period at all while executives were dumping the stock, knowing what they did about the implosion to come. What is equally disgraceful is that employees were even permitted and actually encouraged to invest their pension finances in the same company where they worked. This kind of thing is simply wide open for abuse. You lose your job and your pension all at once. I am of the belief that this practice should be completely barred, and that employee pension funds may be only invested in index funds. Yet another reason to bar employee 401(k)'s flowing into corporate stock is the widespread practice of companies issuing stock so executives can dump holdings, including disproportionate stock option awards, which are conveniently not tallied up as expenditures by the companies. Finally, I want to point something out here. If the facts we have heard so far are true - if they are proven in court - then I believe both a number of Enron and Andersen executives belong in jail for lengthy periods of time. These are not regulatory issues. They are issues of leading executives using all artifice and scheme at their disposal to enrich themselves at the cost of not only their own employees, but millions of investors. Have any of you taken a look at how Enron's creative accounting worked in practice? Here is one incredible example: *When accounting for derivatives trading, ENE and Andersen accounted as gross revenue the full transaction value of all these trades.* This included highly margined positions, and not just the net profit. To give you merely one example: if a private derivatives trader has $100,000 in a futures trading account, he/she permitted to trade approximately 100 Eurodollar futures contracts on the Chicago Mercantile Exchange. Each one of these contracts represents $500,000 in United States dollar deposits held abroad. Using ENE's manner of accounting, a single fully leveraged trade would go down in the accounting books as $50 million in gross revenues. If this trader places merely a single trade each week, never earning a single penny, then he/she would, at the end of the year, account for $2.6 billion in gross revenues in a single year. Not bad for a small investor. Now we may see how ENE claimed $90 billion in revenues. I have read in The Wall Street Journal the CEO of Andersen defending these practices as "regulatory issues." If this outrageous accounting dishonesty has been permitted by the authorities, then I believe we perhaps should take a look at those who write our laws, and how this process truly works.