Ken Lay, DEAD.

Quite a few well intentioned ET'ers are missing obvious moral and ethical points surrounding the diminished value of Enron shares.

First of all: those who sold companies to Enron for stock were not subject to lockdown. Obviously though, Enron employees were subject to lockdown. With disastrous financial results to participants. Which leads to this question. Were Enron employees entitled to PROFITS from a fraudulent concern? If those employees had been allowed to sell shares in the open market, would not the buyers (presumably non Enron employees) been stiffed? So the beef many Enron employees seem to have is that they were unable to pass along soon to be worthless stock to the public.

Think of it like this. You're an IT guy working for a trading company. You know little about their business per se'. You're just the IT guy. As a "bonus" you receive stock. Lots of it. With a lockdown provision. Might as well stick it in your 401k. Suddenly the Fed's storm in and you discover that your firm was in reality a bookmaking operation. The "trading" was paying off those who placed on the 5th race at Aqueduct. It SUX that you're stock is now worthless. Horrible. You're out of a good job to boot. But did you have a MORAL right to profit via the stock off that job? Few would argue yes. So Enron employees got the shaft but the BIGGER shaft would have been cashing those employees out with unsuspecting Joe Sixpack on the other side of the trade.

 

The actual point is that the employees, investors, and bond holders were entitled to accurate financial information on the company and its prospects. Based on that information everyone could have made informed decisions including but not limited to, not selling your good company to loser Lay, not holding all your retirement funds in a weak performer, not buying bonds priced for a Fortune 100 company on a high risk play, etc...

You can't criticize people for acting rationally based on the information at hand. What you are arguing would never have occurred as people would have made drastically different decisions based on the real status of the company and its prospects. There would have been no "other" investors to end up holding the bag.

 

... and the wheel goes round-and-round.

Pabst, your analogy is more correct than you think (if anything, the bookie joint would have been the more legitimate business), ssternlight you too, (but the whole point of running a con, is that no one is supposed to know the truth).

Unfortunately, this is just business as usual in the caveat emptor, business environment in which we find ourselves.

Moral of the story.

Trust no one.

 

Is he still dead?

 

Agreed -- and this was the unstated nub of my back and forth with Cheese I think.

My point is that while we all recognize that the game has a huge number of flaws we shouldn't be acting as apologists for the fraudsters. Nor should we let the scope of the dot com/energy price rigging frauds prevent us from actively trying to clean up the game.

Finally, blaming the victims for not being smarter is absurd. These people are not in the money management business and many of them probably couldn't tell an asset from a liability -- much less allocate their retirement portfolio correctly.

 

Commentary on Enron's acquisition of PGE, viewed ten years later, offers confirmation and rebuttal, respectively, of two of Pabst's points -- first, Lay's peer at PGE cashing out, not unlike Lay, Pai, Skilling et al.; and second, PGE employees & retirees getting Enron stock for their PGE shares, which were not inflated by fraud (and ergo never would cratered but for Enron):

“The commissioners at FERC have opened the door to deregulation, which will benefit every user of electricity,” said Harrison. “Competition means lower prices and better service to customers, whether you’re a manager of a factory, a small business owner or a residential user trying to meet every month’s budget. This merger will create a company committed to being the leader in supplying innovative and competitively priced electrical service to everyone."
— Ken L. Harrison, then chairman and CEO of PGE in a 1996 press release about the Enron merger. Do you feel you're benefiting from paying higher rates than every single publicly owned electric utility in Oregon? [Link]
(While employees and others lost almost everything in stock, Ken Harrison made $75.2 million selling his. He's a defendant in a U.S. Labor Department lawsuit.)

Quoted from www.utilityreform.org

 

The point is that it is not question of apologizing for alleged fraud. Enron stock was going to get trashed in the inevitable bear market whenever it came.

So many cannot see what is in front of them. And in buying or holding on to any stock it is indeed caveat emptor.

 

if he wanted to kill himself by causing a heart attack, how would he do it?

 

Potassium chloride injection.

 

I doubt his 'jail cell' would have been that bad. Probably would have had a luxury living space, family visits, TV, internet, etc