62% of the assets in the employees' 401(k) were in Enron stock. I once saw the mutual fund choices that employees could use. There were some good funds--some duds, but a lot of well-diversified choices.
Ask any financial planner and he or she will tell you: don't put more than 10% of your investments into any one stock--especially your employer's stock.
People got greedy, and they got burned. Badly.
You're exactly right on this, wideawake.
From Reason online:
Enron maintained a rather typical 401(k) plan for a company of its size. It offered 20 investment options, its own stock being one. It matched 50 percent of employee contributions-up to 6 percent of a salary-with Enron stock. Workers couldn't sell shares their employer gave them until they turned 50, a common restriction for gifted stock. They were not prohibited from selling stock they purchased. At the end of 2000, 62 percent of the value of employee 401(k) accounts was held in Enron stock. (This is risky but not unique. Procter & Gamble's fund is 95 percent company stock, Abbott Laboratories' is 90 percent, Pfizer's is 86 percent, and Coca-Cola's is 82 percent.)
In early 2001 Enron decided to contract out its 401(k) administration to an outside company. The transfer required a freezing of accounts, which took place over 11 trading days, from October 29 through November 12. Enron's stock was at $13.81 when it froze the accounts. By the time 401(k) investors could sell again, the stock was at $9.98.
Thanks CYTD - for the information and the support.