From: Harvey Newstrom (mail@HarveyNewstrom.com)
Date: Tue Jan 22 2002 - 19:19:05 MST
Robert J. Bradbury wrote,
> One thing that is clearly true from looking at the chart is that
> Kenneth Lay has once had several hundred million dollars worth
> of stock options in Enron that are now essentially worthless.
CNN is reporting that Lay sold more than half of his stock one year ago when
it was at its peak. He also paid back loans to the company with stock which
was not included as stock sales. They calculated that he made $200 million
on the stock with over $100 million profit after paying the fees to exercise
those options. CNN also reports that Enron froze the employee's 401K funds
so that employees were prevented from selling their stock while executives
continued selling theirs.
Lay and other executives did not lose money on stock. They sold early and
made hundreds of millions in profits while investors lost money and
employees were blocked from selling their stock. Internal Enron memos show
that executives knew they were "probably" going to have a financial
collapse, and that they were selling their stock, while at the same time
they were predicting massive profits to their employees and encouraging them
to buy even more stock.
This was not a failure of the free market and capitalism. This company did
not operate under those rules.
-- Harvey Newstrom, CISSP <www.HarveyNewstrom.com> Principal Security Consultant, Newstaff Inc. <www.Newstaff.com> Board of Directors, Extropy Institute <www.Extropy.org> Cofounder, Pro-Act <www.ProgressAction.org>
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