Posted on 01/12/2002 12:02:32 PM PST by sarcasm
Hmmm, wasn't this guy a Clinton lawyer during Monica? Awful incestuous...
A "freeze" in sales of stock from 401k employee accounts at Enron was instituted in September.
The nominal reason for the freeze was that Enron management had appointed a new 401k account administrator (an outside company specializing in financial services). A freeze is standard practice under these circumstances, so that the new administrator may audit and reconcile the accounts, satisfying itself that everything is in apple pie order before they assume responsibility.
Normally such freezes last 30 to 90 days, depending on the complexity of the administration.
There is a suspicion, however, that the primary objective of the new administrative appointment may well have been to achieve this freeze -- thereby mitigating the oncoming storm.
If the suspicion proves true, add another ten years or so to the prison terms.
If Clinton (or Gore) were in office, Enron never would've been allowed to go in the tank. And, of course, nobody would be going to jail.
As this is now playing out, though, I would not be at all surprised to see a gaggle of Enron execs and several Arthur Andersen officers packing their bags for an extended stay in Marion.
No amount of legal obfuscation can overcome the obvious fact that some rather elemental crimes have been committed.
Bennett was Clinton's Paula Jones atty. FR search has AP reporting on Dec 26, 2001 that Bennett has been hired.
The crap was hitting the fan and they needed a Clinton insider (or more Clinton insiders than they have?) to cover all their behinds.
A "freeze" in sales of stock from 401k employee accounts at Enron was instituted in September.Try 10 trading-days ...The nominal reason for the freeze was that Enron management had appointed a new 401k account administrator (an outside company specializing in financial services). A freeze is standard practice under these circumstances, so that the new administrator may audit and reconcile the accounts, satisfying itself that everything is in apple pie order before they assume responsibility.
Normally such freezes last 30 to 90 days, depending on the complexity of the administration.
From: http://www.freerepublic.com/focus/fr/607072/posts?page=17#17
Press Release ENRON EXPLAINS BASIC FACTS ABOUT ITS 401K SAVINGS PLAN FOR IMMEDIATE RELEASE: Friday, December 14, 2001 HOUSTON – Enron Corp. (NYSE: ENE) today explained basic facts about its 401K savings plan. This explanation is being provided to correct numerous inaccurate news reports and statements from plaintiffs’ attorneys over the past several days.When companies change the administrator of a 401K program, a temporary shutdown, typically lasting several weeks, is required to allow employee account information to be accurately and completely transferred to the new administrator.
In February of 2001, in order to improve its 401K plan, Enron requested proposals from third-party benefits firms to take over administration of its plan.
After selecting a new 401K administrator, Enron notified all affected employees in a mailing to their homes on October 4, stating that a transition period would begin on October 29. Between the first notification and the first day of the transition period, the company sent several reminders to employees over the internal e-mail system.
The transition period during which employees were unable to change investments in their 401K accounts lasted just 10 total trading days, beginning on October 29 and ending on November 12, 2001. The transition applied to all plan participants, including senior executives.
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.
Until recently, the company provided a 50% match on employees' 401K contributions of up to six percent of the their base pay. The match comes from Enron holdings. As is the case with most company matching programs, the match was provided in company stock.
As is also the case in many company 401K programs, until recently, stock holdings from the company match could not be transferred into other investment options until the employee reached age 50. Enron markets electricity and natural gas, delivers energy and other physical commodities, and provides financial and risk management services to customers around the world. Enron’s Internet address is www.enron.com. The stock is traded under the ticker symbol “ENE.” ### Click here to download this press release in Adobe Acrobat 4.0 format. Click here to download Adobe Acrobat 4.0. For additional information please contact: Mark A. Palmer (713) 853-4738 Elsewhere in Press Releases: Enron Corp 2002
I agree.
Ten very critical trading days, were they not?
And one might harbor legitimate suspicions with respect to the timing, mightn't one?
Sure ... the stock price had ALREADY declined into the single digit range by then ... critical? I would say not ...
By then the stock was already in the 8 dollar range (down from what?).
Are you prepared to defend a position that says a company may not change plan administrators and, in doing so may not 'lock down' the databases for a *reasonable* (and considerably shorter period than is standard in industry as you cited) length of time in order to assure an orderly and accurate change-over?
Absolutely not. But I am saying that the timing of the Enron 'lock down' was curious. And worthy of further investigation.
You don't?
On the other hand, selling stock by company executives is routine. Much of this is in the form of exercising stock options which are part of their compensation. Such sales by insiders are publicly reported and there are very strict rules about how they do it.
Much of this could well be innocent behavior by executives who had nothing to do with the Enron scandal. Enron stock had already peaked in price in late 2000. Selling stock as the California power crisis came under control might have been a rational investment decision by some of these executives.
I buy and sell stock in the company I work for all the time. I sell when I think the prospects look gloomy for the next few months and buy when I think things are turning around. There's nothing wrong, illegal or immoral about that. Especially since I'm not always right!
Enron employees were free to do the same thing with the Enron stock in their 401ks that were purchased with their contributions. I'm sure the ones who actively managed their accounts did so. Any Enron employee who held such stock when in slid from $90 to $13 per share before the two-week lockdown pretty much has nobody to blame but themselves. The lockdown cost them another few bucks, but only if they would have sold their stock during that lockdown period. It's peanuts compared to what they had already allowed to happen.
The restrictions on the company matching portion of their accounts prevented them from selling the free stock the company had given them. That's terribly unfortunate, but it's also a very common feature in these types of accounts. I would support a law outlawing that type of restriction.
Certainly the conspiracy wasn't going on under Clinton's watch, was it?
I see no propblem with that - as it assures that the law in the future has 'teeth' and will make those that think about trading on insider information perhaps think twice and decide against it.
The restrictions on the company matching portion of their accounts prevented them from selling the free stock the company had given them. That's terribly unfortunate, but it's also a very common feature in these types of accounts.I would support a law outlawing that type of restriction.
Oh no ... government just go bigger and I just lost more rights ...
I see laws like *this* having the 'Rule of Un-intended Consequences' kick in - like the employer might simply remove this particular compensation item ...
What part of the meaning of 'Free Enterprise' has been lost - should it be changed to 'Mostly-free Enterprise' or '99% Free Enterprise' or 'Only 1% Socialism Enterprise'?
I have been suspicious of Enron since they paid Clinton a one hundred thousand dollar bribe to help them initiate what turned out to be a major fiasco in the Indian power plant. I believe that they thought the US government was going to guarantee that they wouldn't lose money on this mess.
If the *intent* was to simply change the plan's administrator so as to use the 'freeze provision' to stop blood-letting in stock sales by employees - how would you, how could one conclusively prove that? The 'investigation' could turn out to be no more than a witch hunt and a lesson in how the seemier side of business operates. No less than the way life exists in nature (eat or be eaten - financially in this case though) and the survival of the fitest.
That aspect (cutting the blood-letting), although down and dirty and looking VERY ominous in the eyes of the public - could turn out to be true and entirely legitimate.
It just looks bad is all ...
Do I/could I agree to such tactics? I'm afraid my conscience would prevent me from doing so.
I know the employees were screwed by the 401k lockup, but "due diligence" would have waved off any other outside investor for the last year or two.
A list of ten or fifteen heavy sales in a row, with no buys, ought to be enough, despite the fraudulemt "buy" recommmendations of Wall street hucksters, ten or twelve of whom, rode Enron right down in flames, hollering BUY BUY the whole way.
Not all laws create a bigger government, and that one certainly wouldn't. I worked for a company for years that had a restriction like Enron. I couldn't do a darn thing with the stock they had contributed to the plan. It consistently underperformed the market, and I didn't think it was particularly fair. The stock was mine. The company couldn't take it back if I quit. But I couldn't sell it and put the money into a different financial investment.
Such a law would GIVE employees more rights with their own money. You certainly haven't articulated a good argument against that.
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