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To: RetiredNow who wrote (57695)	2/19/2002 4:02:02 PM
From: Zoltan!	Read Replies (1) \| Respond to of 77400

Much of what Enron did was apparently legal, thanks to a compliant Clinton SEC. In an end run around Congress, the SEC gave Enron the ability to do what it did: January 23, 2002 New York Times Exemption Won in 1997 Set Stage for Enron Woes By STEPHEN LABATON WASHINGTON, Jan. 22 — As it expanded aggressively overseas in the 1990's, the Enron Corporation (news/quote) won an exemption from a Depression-era law that would have prevented its foreign operations from shifting debt off their books and that barred executives from investing in partnerships affiliated with the company. The exemption enabled Enron's foreign operations to engage in the kind of financial engineering that experts now say was reminiscent of some of the corporate excesses of the 1920's that led to the 1940 law and that were an important element of the company's meteoric rise and startling collapse.... .....Enron's initial efforts in 1996 to persuade Congress to change the law were thwarted by opposition from a powerful trade group and some federal regulators. The company responded by hiring the former boss of a leading staff official at the Securities and Exchange Commission to represent it in negotiations with the agency. In an unheralded five-paragraph order in March 1997, the S.E.C. official, Barry P. Barbash, gave Enron's foreign operations a broad exemption from the law — the Investment Company Act of 1940.... .....Experts say that the S.E.C. rulings unshackled the company from significant accounting restraints and business dealings between the Enron companies and their executives. The 1997 exemption, in particular, cleared the path for the company to both expand overseas and make greater use of the special partnerships that have caused the company so much turmoil. "From a regulatory standpoint, this raises a flag," said Joseph V. Del Raso, a former official at the S.E.C. in the 1980's and an expert on the Investment Company Act. "It gave them carte blanche to go all over the world and set up subsidiaries and affiliated entities that would have been prohibited under the act." Another expert on the act, Mark A. Sargent, the dean of the Villanova law school, agreed. "The Enron structure was not a single company with stockholders engaged in operations like an ordinary corporation," he said. "It was similar to an investment company with investments in a bunch of different companies. The decision to exempt those from the kind of protections to investors is now coming home to roost."... nytimes.com Here's the kicker (Barbash was the lawyer at the S.E.C. who approved the exemption): ....The company decided to retain Joel H. Goldberg, a former director of the investment management division at the S.E.C., who said today that he did not know how the company came to hire him. An Enron official said the company had retained Mr. Goldberg knowing that he had previously been Mr. Barbash's boss and was his predecessor at the S.E.C. Mr. Goldberg had been Mr. Barbash's supervisor at the S.E.C. in the 1980's and the Labor Department in the 1970's. The two lawyers are now partners at the international law firm of Shearman & Sterling. Mr. Goldberg said he viewed the exemption as a narrowly tailored one intended to permit the company to continue its overseas projects. But he acknowledged that had the company not been granted the exemption, it would have been constrained from using any partnerships or shifting debt off the books in its foreign operations. "I guess on the one hand, if they had been subject to the Investment Company Act, they probably could not have done these transactions," he said. "The subsidiaries would not have existed, and they would have had to make another plan." Gee, that last line is a real doozie! I'm waiting to see Levitt, Goldberg and Barbash hauled before Congress to explain how this whole deal was worked out.

To: RetiredNow who wrote (57695)	2/19/2002 4:05:19 PM
From: Stock Farmer	Respond to of 77400

Mindmeld either you missed my point or you and I are agreeing violently. The difference between "legal" and "fraudulent" rests on a razor's edge of intent. In this case whether or not we account for the intended compensation benefit of stock options. In Enron's case whether or not we account for the intended obfuscation of risk.... The difference is that certainty intervened to make the later question a no-brainer. Your other statements "They were committing outright fraud and laughing all the way to the bank... trampling... able to get away with it, because complicit... collusion... executive..." Gee... some of this rings a bell. Same $hit, different shovel. Only Enron's in the news at the moment. Enron was forced into insolvency, so the wake up call is louder. Can't just hit the snooze button and pretend it's not happening until after you've exercised the next trance of your unvested options... ...until what's left is underwater. So when nobody has anything to lose, it won't matter anyway.

To: RetiredNow who wrote (57695)	2/19/2002 4:23:41 PM
From: JeffT	Respond to of 77400

Good point mindmeld, however the last time I watched the news it does not seem like they (Enron executives) "were able to get away with it" as you said. <g>....... There is an old song about the Everglades in Florida (Kingston Trio??) that has the following in it: "If the skeeters don't get you then the gators will". The skeeters did not get the Enron executives, but it appears that the gators will. Jeff

To: RetiredNow who wrote (57695)	2/19/2002 5:03:11 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

9:02AM Cisco Systems penetrating token ring, metro SONET markets (CSCO) 17.09: -- Update -- UBS Warburg says that Cisco is making progress in transitioning installed base of token ring networks to ethernet and in expanding into metro SONET at the Baby Bells. On the former, UBS says that Cisco has won its largest corporate contract ever to migrate IBM's token ring network to ethernet; valued at $300-500 mln. On the latter, UBS believes CSCO has won an application worth about $50 mln at Verizon (VZ) for its Cerent metro SONET product.