Word: enronizing
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...Enron, apparently, does. Now the courts can sort...
...holiday greeting card. He recently married his longtime love, and after packing boxes over Thanksgiving weekend, they are set to move into their dream house in the country, just in time for Christmas. Lacey's retirement plans, however, are in ruins. He works for the embattled energy-trading firm Enron, and has all his 401(k) savings in Enron stock, which plunged from $90 a share in late 2000 to $4.71 at the end of last week...
Much of that decline has come since October when Enron reported it had lost $638 million in the third quarter and later admitted it had overstated earnings from 1997 to 2000. As their life savings shriveled, all Lacey and his co-workers could do was watch. From Oct. 17 to mid-November, Enron blocked its employees from shifting investments in their 401(k) accounts, while it switched to a new plan administrator...
Lacey has joined a federal lawsuit that accuses Enron of breaching its fiduciary duty to employees by encouraging them to invest in Enron stock even after executives became aware of serious financial problems that would hurt the stock price. "There was a lot of promotion inside the company to invest in Enron and help us grow, so everybody got into it," Lacey told TIME's Cathy Booth Thomas. Enron says it doesn't comment on pending lawsuits...
...Like Enron's, many firms' 401(k) plans can have blackout periods lasting from a few days to a few weeks when they change plan administrators. "That's not necessarily wrong or illegal," says Alden Bianchi, chairman of the employee-benefits group at the Mirick O'Connell law firm in Westborough, Mass. Employees need to make sure their 401(k) investments are diversified at all times--in case they can't shift them for a while...