Who lost money?
Enron’s creditors and trading partners lost money with the firm’s collapse. But it was the company’s shareholders who lost the most. Shares, today worth pennies, sold for $83 a year ago. Many of Enron’s shareholders were its rank and file employees, whose retirement plans consisted of Enron stock. Employees say the company encouraged them to buy Enron stock, and restricted their ability to cash out into more diversified investments. While the stock soared through the 1990s, retirees were in no rush to cash out, and current employees were even more eager to load up on Enron. On Oct. 17, at the same time it was reducing its shareholder equity by $1.2 billion, the company switched 401(k) plan administrators. This resulted in the suspension of any 401(k) stock transactions for a minimum of two weeks, preventing employees and retirees from selling Enron stock while its price was collapsing. Thousands of older workers and retirees saw the vast majority of their savings wiped out. Q: Is there
