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25.10.14 2020
The W - Current Events & Politics - Lay, Skilling convicted in Enron collapse
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Leroy
Boudin blanc








Since: 7.2.02

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#1 Posted on | Instant Rating: 4.91
Lay, Skilling convicted in Enron collapse



    Lay was convicted on all six counts against him in the trial with Skilling. Skilling was convicted on 19 of the 28 counts against him, including one count of insider trading, and acquitted on the remaining nine.



Anyone have any sympathy for these guys? I guess it was worth the wait, although it like it took FOREVER to even prosecute these clowns.

Personally, I hope they go away for a long, LONG time.



"Those of you who think you know everything are annoying to those of us who do."
David Brent, The Office

"Oedipus ruined a great sex life by asking too many questions."
Stephen Colbert, The Colbert Report

"Transported to a surreal landscape, a young girl kills the first woman she meets and then teams up with three complete strangers to kill again."
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Cerebus
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Since: 17.11.02

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#2 Posted on | Instant Rating: 0.97
Yeah, throw them in jail for a few years so they'll get out and spend all those millions the stole on more shit no one really needs.

Sadly, they'll end up in some minimum security, non ass-pounding prison. These shits need to be ass raped in the worst way, since the figuritively ass raped the public and the people working for them.
DrDirt
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Since: 8.10.03
From: flyover country

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#3 Posted on | Instant Rating: 8.12
    Originally posted by Leroy
    Lay, Skilling convicted in Enron collapse



      Lay was convicted on all six counts against him in the trial with Skilling. Skilling was convicted on 19 of the 28 counts against him, including one count of insider trading, and acquitted on the remaining nine.



    Anyone have any sympathy for these guys? I guess it was worth the wait, although it like it took FOREVER to even prosecute these clowns.

    Personally, I hope they go away for a long, LONG time.


Personally, I had hoped that somehow all the people who lost their savings would get some justice.



Perception is reality
Deputy Marshall
Liverwurst








Since: 28.6.04
From: Troy, NY

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#4 Posted on | Instant Rating: 5.44
    Originally posted by DrDirt
    Personally, I had hoped that somehow all the people who lost their savings would get some justice.


Isn't this the closest thing to justice they can get, though? I was under the impression that there wasn't any money left to compensate them.



Loyal MFer...er....SPFer.


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orangeman
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Since: 21.8.04
From: ...that would be telling

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#5 Posted on | Instant Rating: 6.76
I didn't think there was any money left. Enron was some $38 billion in debt when all their off-balance-sheet deals were unraveled and accounted for. I'm not at all surprised from reading the linked article that Lay is still in complete denial about any guilt. I have less sympathy for that man than anyone else at Enron, save for Fastow, Glisan and Lou Pai.

If anyone is interested in knowing more about Enron and how they got to the point of collapse you should read "The Smartest Guys In the Room." Excellent book and you don't need to have studied accounting or coporate finance to comprehend it. They also made a quasi-documentary of the same title based on the book, but the book gives so much more background and detail that lays the foundation for understanding why a lot of things went the way they did at Enron.



ShivWorks
Corajudo
Frankfurter








Since: 7.11.02
From: Dallas, TX

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#6 Posted on | Instant Rating: 4.32
Sadly, they'll end up in some minimum security, non ass-pounding prison. These shits need to be ass raped in the worst way, since the figuritively ass raped the public and the people working for them.

Well, Kozlowski (the Tyco guy) ended up in a maximum security prison. He was recently transferred to a medium security prison. Given that Skilling and Lay are facing 20-30 years for the Enron fraud, plus Lay is facing additional time for his bank fraud conviction (four additional counts), they could very well end up being asked to pick up the soap.

Personally, I had hoped that somehow all the people who lost their savings would get some justice.

I agree that it's horrible for the people who lost money and the employees who lost jobs because of what Lay and Skilling and others did. And, given that Enron is completely bankrupt and Lay/Skilling reportedly spent over $60 million on their defense, there can't be much left for the victims. OTOH, the defense lawyers, who after all lost the case after basing the defense on a risky strategy (which, to me, suggests they did not do such a spectactular job), are swimming in this money. And, they'll make even more on the appeal. That, to me, stinks as well.

Lastly, not to be an ass (which usually means I'm about to be one), but I have very limited sympathy for the people who lost their life savings because they put their entire 401k and investments and everything into Enron stock. These people were greedy and deserve much less sympathy. Rather than putting retirement money into some diversified mix of assets, they chose to put everything into Enron. Very stupid, very greedy, and it came back to haunt them.



"Teach children that they have great potential because they are human." -Warrior
DrDirt
Banger








Since: 8.10.03
From: flyover country

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#7 Posted on | Instant Rating: 8.12
    Originally posted by Corajudo
    Lastly, not to be an ass (which usually means I'm about to be one), but I have very limited sympathy for the people who lost their life savings because they put their entire 401k and investments and everything into Enron stock. These people were greedy and deserve much less sympathy. Rather than putting retirement money into some diversified mix of assets, they chose to put everything into Enron. Very stupid, very greedy, and it came back to haunt them.


I sort of agree but some of the people in our part of heaven were not well versed in the markets and relied on professional recommendations. One older (60ish) guy here lost over $500,000. Not all his retirement but most. Several people in our area worked for them in Houston and it was the stock they received from the company.

My retirement is split into three mutual funds, from low to high risk. It was stupid but most of us are woefully ignorant of such arcane matters. I am trusting the managers of my three funds not to be idiots. I check out the track record but I could be toast overnight.



Perception is reality
DJ FrostyFreeze
Knackwurst








Since: 2.1.02
From: Hawthorne, CA

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#8 Posted on | Instant Rating: 6.49

    Originally posted by Corajudo
    I have very limited sympathy for the people who lost their life savings because they put their entire 401k and investments and everything into Enron stock. These people were greedy and deserve much less sympathy. Rather than putting retirement money into some diversified mix of assets, they chose to put everything into Enron. Very stupid, very greedy, and it came back to haunt them.
I disagree. These people put their 401k's into a company that they not only believed in, but also worked for themselves. It's not like we're talking about a bunch of people who hopped on the stock bandwagon of some company they never heard of in an industry they knew nothing about. Every month/week/year/whatever when their stock holdings report came out and it showed that Enron (they company they worked for, mind you) was making money hand over fist, what reason would they have to pull out? If Enron's CEO/CFO/accountants had been reporting their losses honestly, the people whose savings & 401k's were in their hands would have (hopefully?) seen the steady earnings decline coming & pulled out sooner. Instead, they were lied to over and over and by the time the truth came out, it was too late.



Leroy
Boudin blanc








Since: 7.2.02

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#9 Posted on | Instant Rating: 4.91
Not to mention the actual health of the company was hidden by the higher ups so that things appeared to be fine up until the very last minute. If I recall correctly, analysts were recommending Enron stock within a month of the company's collapse.

It's one thing to throw your money into a fly-by-night, get rich quick scheme. It's another thing entirely when it's being recommended as a sound long term investment - based on direct manipulation of those in charge.

(edited by Leroy on 26.5.06 1054)


"Those of you who think you know everything are annoying to those of us who do."
David Brent, The Office

"Oedipus ruined a great sex life by asking too many questions."
Stephen Colbert, The Colbert Report

"Transported to a surreal landscape, a young girl kills the first woman she meets and then teams up with three complete strangers to kill again."
Unknown, Marin County newspaper's TV listing for "The Wizard of Oz"
pieman
As young as
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Since: 11.12.01
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#10 Posted on | Instant Rating: 7.79


    Originally posted by Corajudo
    Lastly, not to be an ass (which usually means I'm about to be one), but I have very limited sympathy for the people who lost their life savings because they put their entire 401k and investments and everything into Enron stock. These people were greedy and deserve much less sympathy. Rather than putting retirement money into some diversified mix of assets, they chose to put everything into Enron. Very stupid, very greedy, and it came back to haunt them.


That's just not right. I have worked for the same company for sixteen years and I have a pension fund with the company I work for. It is ludicrous to blame these people for their plight. Shame on you.





Gabba Gabba Hey!
rinberg
Boudin rouge








Since: 30.1.02
From: South Georgia

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#11 Posted on | Instant Rating: 5.14
    Originally posted by DJ FrostyFreeze
    These people put their 401k's into a company that they not only believed in, but also worked for themselves.


Additionally, if Enron was like other employers, the money that the company contributed as a matching incentive probably HAD to be in company stock. That's still not 100%, but it can be a large chunk of your retirement that you have no control over.



There are 10 kinds of people in the world. Those that can read binary and those that can't.
Corajudo
Frankfurter








Since: 7.11.02
From: Dallas, TX

Since last post: 109 days
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#12 Posted on | Instant Rating: 4.32
It's one thing to throw your money into a fly-by-night, get rich quick scheme. It's another thing entirely when it's being recommended as a sound long term investment - based on direct manipulation of those in charge.

Well, I said that I had limited (but not no) sympathy for people who put everything into Enron. I stand behind what I said. Anyone who puts all their savings, their retirement plans, everything into one single company is absolutely playing with fire. It's called risk vs. return. But, human nature is to chase those profits and ignore the risk part. The employees thought the stock price would rise for all eternity and so they put all their money into the stock. Unfortunately, they were wrong. If they had realized some of those gains that they had on paper, they would not have lost everything. And, they deserve some level of culpability for that.

If, at the height of the tech boom, I had put all my money in Microsoft, it would have looked like a smart investment. Industry leader, commanding market share, robust profits, huge cash reserve, tremendous stock price increases, etc. However, today my savings would have declined by two-thirds. And, no one would have sympathy for me. Nor should they.

I have worked for the same company for sixteen years and I have a pension fund with the company I work for.

If your retirement plans are contingent entirely on that one company, then I would recommend diversification. It's one thing to believe in a company, but it's another to rely on them for everything. The company can pull that pension tomorrow (if you mean pension the way I understand it), and there would be nothing you could do about it. I am absolutely not suggesting that they will do it, just that they can. So, you'd best have some back up savings/401k money outside of that one company/industry.

Additionally, if Enron was like other employers, the money that the company contributed as a matching incentive probably HAD to be in company stock.

If this is true, then that's even more tragic for the employees. But, it also makes it more important to have the other 50% of the retirement account in something else. And, many companies do not require this. I don't know if Enron did or did not. And, if the employees got shoddy investment advice, then whoever offered that advice should have to answer for that. But, at some point, people still have to take responsibility for their decisions because at the end of the day it's still their money and they have to know where it's going and the implications of their decisions.

Maybe this makes me an ass. Maybe I should be ashamed. But, I would still argue that it is patently stupid for someone to keep all their savings and money in any one company, especially in today's economic and financial environment. To some extent, people have to take responsibility for their decisions, even if the consequences are not entirely their fault.



"Teach children that they have great potential because they are human." -Warrior
JoshMann
Andouille








Since: 17.11.03
From: Tallahassee, FL

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#13 Posted on | Instant Rating: 5.04
This is very simple: the stockholders were lied to. You can talk about diversified portfolios all you want, but there's no getting around that one point.

(edited by JoshMann on 26.5.06 1533)


George Clooney, you been reading about all that? You been seeing that?
pieman
As young as
he feels








Since: 11.12.01
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#14 Posted on | Instant Rating: 7.79


    Originally posted by Corajudo
    I have worked for the same company for sixteen years and I have a pension fund with the company I work for.

    If your retirement plans are contingent entirely on that one company, then I would recommend diversification.



It is diversified. My point still holds that these people were deceived and no amount of rationalization will make them any less than victims in this episode.





Gabba Gabba Hey!
Leroy
Boudin blanc








Since: 7.2.02

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#15 Posted on | Instant Rating: 4.91
Never mind. pieman said in fewer words what the jist of my long winded post was...


(edited by Leroy on 26.5.06 1249)

"Those of you who think you know everything are annoying to those of us who do."
David Brent, The Office

"Oedipus ruined a great sex life by asking too many questions."
Stephen Colbert, The Colbert Report

"Transported to a surreal landscape, a young girl kills the first woman she meets and then teams up with three complete strangers to kill again."
Unknown, Marin County newspaper's TV listing for "The Wizard of Oz"
orangeman
Salami








Since: 21.8.04
From: ...that would be telling

Since last post: 3049 days
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#16 Posted on | Instant Rating: 6.82
    Originally posted by Leroy
    If I recall correctly, analysts were recommending Enron stock within a month of the company's collapse.


This largely comes from the tangled web connecting the stock analysis and investment banking sections of the brokerage houses. Enron was ruthless in using the lure of investment banking business to extort favorable recommendations on their stock. They all but called for the heads of analysts who didn't rate their stock as a strong buy. The brokerages gave good recommendations time and time again in order to keep Enron's business. Analysts were drinking the Enron Kool Aid and also were subject to Enron's deceptions just like the stockholders, but the stockholders would be free to change their opinion of the stock at any time and act accordingly. Some analysts weren't able to do that without fear of consequence because of the pressure Enron brought to bear on their employers.



ShivWorks
DJ FrostyFreeze
Knackwurst








Since: 2.1.02
From: Hawthorne, CA

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#17 Posted on | Instant Rating: 6.51

    Originally posted by Corajudo
    Maybe this makes me an ass. Maybe I should be ashamed. But, I would still argue that it is patently stupid for someone to keep all their savings and money in any one company, especially in today's economic and financial environment. To some extent, people have to take responsibility for their decisions, even if the consequences are not entirely their fault.
Are you serious? People were LIED TO here. You really dont see that?

We're not talking about investing in a company that was on fire during the tech boom but has declined since. We're not talking about people who expected their stock to "rise for all eternity". We're not talking about investors who received shoddy advice either

We're talking about people who invested their money in a company that was DECEIVING THE PUBLIC about their earnings. Why do you keep glossing over that? If any one of your examples of "greedy people not deversifying" were true, then yes, we could chalk up the whole thing to "bad investment decisions" and the people who lost out would have no one to blame for themselves.

But that didnt happen here.

What DID happen was a company BROKE THE LAW and deceived the public about how much profit they were pulling in. Isnt that what you're supposed to base your investments on? Earnings and potential for future earnings? These investors were TOLD that this company was making tons of money, so they kept investing. Like you're supposed to. If they were told the truth that this company was in fact LOSING money and they still decided to invest, THEN it would be their fault. But it's not.



Leroy
Boudin blanc








Since: 7.2.02

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#18 Posted on | Instant Rating: 4.91
    Originally posted by orangeman
    Some analysts weren't able to do that without fear of consequence because of the pressure Enron brought to bear on their employers.


I remember hearing about this.

That's pretty frickin' disturbing. It really means that analysts are publicity agents, not investment advisors, and basing your investments on these folks makes it more of a gamble than it already is...



"Those of you who think you know everything are annoying to those of us who do."
David Brent, The Office

"Oedipus ruined a great sex life by asking too many questions."
Stephen Colbert, The Colbert Report

"Transported to a surreal landscape, a young girl kills the first woman she meets and then teams up with three complete strangers to kill again."
Unknown, Marin County newspaper's TV listing for "The Wizard of Oz"
Corajudo
Frankfurter








Since: 7.11.02
From: Dallas, TX

Since last post: 109 days
Last activity: 4 days
#19 Posted on | Instant Rating: 4.32
My first post came off harsher than I intended. I agree that the stockholders are victims of the Enron mess. But, I still think the people who lost everything have some level of blame for not diversifying. Some level of blame, not no blame. I stand behind that.

And, one group that should be crucified is the stock analysts. Their analysis supports their self-interest alone and their worthless research reports are entirely self-serving. They continued to rate Enron a buy, even in the face of the evidence below and even after results began to be restated in late 2001.

Isnt that what you're supposed to base your investments on? Earnings and potential for future earnings? These investors were TOLD that this company was making tons of money, so they kept investing. Like you're supposed to. If they were told the truth that this company was in fact LOSING money and they still decided to invest, THEN it would be their fault.

You are not supposed to keep all your money in one stock, no matter its performance. Period. Again, risk vs. return. Let's keep things in perspective. In 1999 and 2000, Enron stock rose by 56 and 87(!) percent, respectively. In comparison, the Dow increased 20% and then fell 10% in those two years. Its stock price was 70 times earnings; extremely high (suggesting overvalue). This is in no way sustainable. For further proof:

To justify their stock price in 2000, Enron would have had to earn a return on equity of 25% forever (compared to their actual ROE of 18%, 2.5%, 12.5% and 12% in 1996-9, respectively), increase revenue from $100 billion to $700 billion in 10 years (60 percent compounded annual growth), and then 10% annually thereafter. By way of comparision, for 1979 - 1998, the average publicly traded company posted ROE of 11% and annual revenue growth of 4.6%.

So, even the fraudulent numbers look similar to the companies that were 'on fire during the tech boom but declined since.' And, it's quite obvious that some number of people did expect their stock to "rise for all eternity". Otherwise, why would they have put all their savings into this one stock?

So, to reiterate, I see that people were lied to and were victims. However, those that had all their savings in that one company should shoulder some of the blame for losing their savings. I do feel badly for them, but they have some degree of responsibility.



"Teach children that they have great potential because they are human." -Warrior
AWArulz
Knackwurst








Since: 28.1.02
From: Louisville, KY

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#20 Posted on | Instant Rating: 6.60
I can tell you this: prior to the Enron thing we were not able to move stock we had received as Matching on our 401K (it was called Preffered Stock) out of our company's stock. Since then, it has transfreed to common stock, which can be moved to other investments if desired. Of course, our company is one of the ten best governance companies in the world, but I still make my portfolio have no more than 20% of my company's stock - the rest is split through other investments.

But I know plent of people whose entirte investment is in company stock. Of course, in our case, those people have made a mint.




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