Any Enron stock which the employee bought with his contribution or outside the plan could be sold at any time. The stock bought within the plan could not be sold for a period of about 2 weeks when they were changing administration of the plan, which was announced back in February of 2001. The changeover period was during the end of October, beginning of November.
Stock contributed by the Company which was in the form of a contribution match to the plan, could not be sold unless you were over 50. This is very common practice my many companies.
So, the only stock they couldn't sell was the stock given to them by the Company. Now, they could claim, since there appears to be malfeasance on the part of the execs, that they deserve the basis of that stock at the time of the 401(k) match. This would be no where near the high valuation of the stock. Any gains on that stock would be unrealized gains and I am afraid that's the way of the market. They agreed to the match and knew they couldn't sell until they were 50.
As for their investment options, they had 20 to choose from.
My guess here is that the employees chose to buy the stock within and also outside the 401(k). They rode it all the way up and then didn't sell as it came down, which BTW,was not nearly as precipitous as the media claims. The stock came down throughout 2001 much like nearly every other stock. The employees are screaming about not getting their unrealized gains because they chose not to sell. Funny thing about the market - it's great when it's up and not so great when it is down.
Other than the employer match, it seems the employees just lost valuation in their stock like everyone else in the market over the past few years.
Congress should stay out of this. They are bound to mess it up!
Someone should sue the press for all the misinformation spewed out in this "scandal."