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Discussion in 'Anything goes' started by Songbird, Jul 6, 2006.

  1. spnited

    spnited Active Member

  2. Birdscribe

    Birdscribe Active Member

    Uhhh Trounced, little problem with that theory....


    Their 401k was doled out in Enron stock, stock they couldn't sell under company regs. Of course, if your last name was Fastow, Lay, Skilling or one of the other poobahs who knew what the hell was going on, you could dump your soon-to-crash stock at or near its peak.

    If your name was Joe Schlabotnik, you were hosed.
  3. steveu

    steveu Well-Known Member

    FWIW, I voted Republican in 2004 and will do so again in 2008.
    Of course, John McCain will likely be on the ticket, but that's another story. :D
  4. trounced

    trounced Active Member

    Employees were allowed to sell their vested shares, same as management. Lay actually did not sell 5 million shares he owned. He sold less than 12 percent of his holdings.

    You can put whatever you want in a 401k.

    Many portfolios are overweighted toward shares of employer as well - it's a form of compensation.

    The remedy for this is to sell shares as they vest in order to diversify.

    If people had their life savings in the stock these means one of two things: they failed to diversify by selling shares of stock that had vested or they took savings they already had and deliberately overweighted their portfolio toward Enron stock.

    Neither was wise.

    From the www.enronerisa.com/plan.html page:

    "Enron is the sponsor of the Plan. The participants of the Plan were permitted to contribute from 1% to 15% of their eligible base pay to the Plan. Participants directed the investment of their contributions, in 1% increments, to the various investment options available in the Plan. Most of these options were diversified mutual funds. (emphasis added) However, the options also included the Enron Corp. Stock Fund and the Enron Oil & Gas Stock Fund (without distinction, the "Company Stock Funds"). The Company Stock Funds invested solely in company stock (and a small portion in cash equivalents for liquidity). Enron matched participants' contributions, at certain specified percentages, by making contributions to the participants' account into the Company Stock Funds. These investments were frozen in the Company Stock Funds in most cases until the participant reached age 50."

    So, it would appear the employees had the ability to diversify their contributions to the 401(k) plan, but that many did not. Ultimately, that portion of their 401(k) plan was their responsibility.
  5. A defense of Enron.
    It's like watching somebody try to make a flatiron float.
  6. alleyallen

    alleyallen Guest

    Should they have diversified? Of course.
    Could they diversify? It appears so.
    Are you a douchenozzle for blaming the victims? Without a doubt.
  7. Columbo

    Columbo Active Member

    The incentive to use the plan, company match, was doled out in non-transferrable Enron stock.

    I will say that, as I thought I had heard it, Enron employees were locked in to their Enron stock.

    So, as much of a raving, headed-straight-to-hell moron as trounced is, I learned something today... if it's true.

    Not exactly the most official-looking of web sites.
  8. markvid

    markvid Guest

    The Enron mess is what made the gov't change the rules so this wouldn't happen again.
    The Enron people were stuck with Enron stock only. They couldn't diversify.
  9. poindexter

    poindexter Well-Known Member

    Not sure I agree with your first sentence. If by "change the rules" you mean instituting the Sarbanes-Oxley act, it isn't going to stop company fraud. I know pretty well about a company who has instituted to the letter every part of Sarbanes-Oxley - and their company was hit with a large 8 figure fraud in the past 18 months. Cheats will always find new ways.

    Another thought about the Enron 401(k) participants:* If the company's wealth was built on a house of cards of fraudulent transactions and shady accounting practices, then their 401(k) wealth was built on the same (based on the stratospheric rise of the stock). The employees definitely got screwed eight different ways, but it appears to me their 6 and 7 figure wealth was based on fraud anyway.

    *This is JUST food for thought. It in no way supports Enron management or criticizes the employees.
  10. D-Backs Hack

    D-Backs Hack Guest

  11. D-Backs Hack

    D-Backs Hack Guest

    I still do, unfortunately, especially after hearing Suskind's "You've covered your ass now" account of Bush receiving the the 8/6/01 PDB at his fake ranch.

    I get pissed off just thinking about it. This man is to leadership like corned beef is to lawn bowling.
  12. tyler durden 71351

    tyler durden 71351 Active Member

    What set me over the edge was reading an excerpt from Douglas Brinkley's book about Hurricane Katrina and seeing that Karl Rove wanted to find out if there was any sort of political advantage to how badly Louisiana Gov. Kathleen Blanco handled the hurricane, since she is a Democrat. Anyone who can find the political angle in a natural disaster is lower than dirt, and anyone who keeps a guy like that around is just as bad. God forbid you try to do something for someone, because it's just the right thing to do......
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