Thread: Enron
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Old 01-15-2002, 10:47 AM   #4
Micah Foehammer
Ma'at - Goddess of Truth & Justice
 

Join Date: November 15, 2001
Location: Asheville, NC
Posts: 3,253
I work with a couple of ex-Enron guys. Here is their INSIDE take on the situation:

Enron's 401k plan was split into two component parts:
The first part was comprised of employee contributions and contributors have always had the option to invest there money into a WIDE variety of funds as well as Enron stock. The second part was Enron's matching contribution which was restricted (until 4th q of 2001) to Enron stock. Late in 2001, Enron employees were given the option to move their Company contributions out of Enron stock into other investment options; however, many declined to do so because the procedure was allegedly cumbersome and time consuming. At the time this option was offered, Enron stock was in decline from its high but was still above 40$ a share.

According to my friend, he can sympathize with those people who took a major hit, but he points out that employees WERE given options that would have allowed them to diversify their 401k plans and many simply did not exercise those options.

I do agree that Lay and his cronies are guilty at best of negligence and at worse of fraud and insider trading violations; however, the employees themselves are not entirely blameless since apparently they could have limited or perhaps completely eliminated the downside liability of their portfolio losses!
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