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Filed in U.S. District Court, Southern District of Texas, the suit seeks to represent workers who lost millions of dollars in the stock plan after the company illegally locked down the ESOP plan, prohibiting employees from selling Enron stock during its recent freefall, the suit claims. The suit also claims that the energy trading company and plan trustee breached their duty to the plan participants by withholding key information regarding Enron's true financial situation. Steve Berman, the attorney representing the plaintiffs, said the actions by Enron and Northern Trust crushed the lives of thousands of Enron plan participants. "These people weren't Wall Street risk-takers," Berman said. "These were lunch-pail men and women who went to work every morning, putting a little away every month for retirement, or to finance a child's education. Suddenly, their savings vanished."
Among other charges, the complaint contends that: - Enron issued false and misleading financial results: The suit contends that Enron repeatedly issued false information about the company's financial condition, which ESOP participants relied upon to their financial detriment. In an attempt to inflate Enron revenue, earnings and assets, Enron failed to disclose hundreds of millions of dollars in debt while touting the financial strength of the company.
-Enron and its plan trustee illegally barred ESOP participants from selling stock: On Oct. 17, Enron locked down all assets in the ESOP, rendering ESOP participants powerless in selling shares of Enron. During that time, employees watched Enron stock plunge more than 70 percent after an announcement of a $618 million third quarter loss.
If approved by the court, the class action could represent thousands of Enron employees enrolled in the ESOP plan. Filed by attorney Steve Berman of the Seattle-based law firm Hagens Berman on behalf of a proposed class of participants in the ESOP plan, the suit claims Enron retirement plan managers withheld crucial information regarding the risks of investing in Enron stock. Instead of being warned of the risks, employees were encouraged to invest heavily in Enron stock, according to the suit. On Oct. 17, Enron froze employee accounts, preventing employees from moving any of their investments out of Enron stock, the suit states. Employees were powerless to trade Enron stock as the company's stock plunged more than 70 percent after an announcement of a $618 million third quarter loss.
According to Berman, while employees watched their retirement funds evaporate, Enron executives had already engaged in extensive insider trading prior to the Oct. 16 announcement, pocketing millions of dollars in personal proceeds.
"It is as if Enron took a match to these employees' future, and forced them to watch it burn in front of their eyes," Berman added. "Enron and Northern Trust's actions are nothing short of scandalous." On October 16, 2001, Enron surprised the market when it announced that the company was taking non-recurring charges totaling $1.01 billion after-tax in the third quarter of 2001. Enron later revealed that a portion of the charge was related to the unwinding of limited-partnership investments controlled by Enron's CFO. The company announced that the company would lose more than $1 billion in shareholder equity as a result of the unwinding of investments. As this news began to be assimilated by the market, the price of Enron common stock dropped significantly. Enron employees who are interested in joining this class-action lawsuit can receive more information by calling 206-623-7292, or going to www.hagens-berman.com. The class-action suit seeks to represent ESOP participants who were invested in the plan between Jan. 20, 1998 and December 3, 2001.
On Nov. 20, Hagens Berman filed a class-action suit against Enron on behalf of a proposed class of participants in the Enron Savings Plan. For more information, visit www.hagens-berman.com. About Hagens Berman
Steve Berman is managing partner of Hagens Berman in Seattle. Recently cited as one of the nation's top 100 influential attorneys by The National Law Journal, Berman is a nationally recognized expert in class action litigation. Berman represented Washington State, 12 other states and Puerto Rico in lawsuits against the tobacco industry that resulted in the largest settlement in the history of litigation. Berman also served as counsel in several other high-profile cases including the Washington Public Power Supply litigation, which resulted in a settlement exceeding $850 million, and the proposed $92.5 million settlement of The Boeing Company litigation. Other cases include litigation involving the Exxon Valdez oil spill; Louisiana Pacific Siding; Morrison Knudsen; Piper Jaffray; Nordstrom; Boston Chicken; and Noah's Bagels.
+++++++++USA Today just published President George W. Bush's investment portfolio - managed in a blind trust since 1995 (when he was elected governor of Texas) by Northern Trust. He has half his assets stashed in U.S. Treasury notes and somewhere between one-eighth and one-sixth in stocks and stock mutual funds. The rest is in real estate, cash and private partnerships. Bush's total net worth is somewhere between $11 million and $29 million (reporting requirements account for the vagueness).What intrigue me are the stock holdings. Northern Trust has put Bush into 39 stocks, but just seven of them are technology and telecom firms, and all of those are large ones.
There's no telling, of course, whether Bush continues to hold these stocks in his blind trust, but, if he does, all of them seem to have benefited from his accession to the presidency.
Since the start of the year, Microsoft has jumped 41 percent; IBM, 31 percent; Lucent, 54 percent; AT&T, 32 percent; Intel, 8 percent; Xerox, 48 percent; and Compaq Computer, 38 percent.
