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Jeff Skilling Sentenced to 24 Years (Enron CEO)
WCHS Portland ^ | October 23, 2006

Posted on 10/23/2006 1:11:20 PM PDT by Lunatic Fringe

Breaking


TOPICS: Breaking News
KEYWORDS: corporatescandals; dupedinvestors; enron; kenlay; skilling
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To: VRWCTexan; wideawake; wagglebee
From the link that VRWCTexan provided:

"As is also the case in many company 401K programs, until recently, stock holdings from the company match could not be transferred into other investment options until the employee reached age 50."

101 posted on 10/23/2006 2:34:08 PM PDT by Ready4Freddy ("Everyone knows there's a difference between Muslims and terrorists. No one knows what it is, tho...)
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To: wideawake
But then the problem is Lynn Stewart's sentence is much too low, not that Skilling's is much too high.

Plus once we come to a solution on what is the appropriate punishment for each, I'd add a couple of years to Stewart's sentence just for that smug smirk she always seems to wear.

102 posted on 10/23/2006 2:34:38 PM PDT by NYCynic
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To: Ready4Freddy
holdings from the company match

That's precisely what I said.

You can transfer your own contributions whenever you wish - the free matching stock the company can give you if it wants to give you free stock cannot be transferred until it vests.

If your retirement plan is based not on your own investment but on the hope that your employer will give you enough free shares to enable you to retire, then you don't actually have a retirement plan.

103 posted on 10/23/2006 2:37:32 PM PDT by wideawake ("The nation which forgets its defenders will itself be forgotten." - Calvin Coolidge)
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To: wideawake
Enron employees had no choice is how the match was paid. Your post #45 said "They absolutely had a say in where their money was invested. They voluntarily chose Enron stock,...

I haven't seen a breakdown of the market value of Enron's plans, contributions vs. match, but I suspect the latter was a significant percentage of the total.

104 posted on 10/23/2006 2:44:08 PM PDT by Ready4Freddy ("Everyone knows there's a difference between Muslims and terrorists. No one knows what it is, tho...)
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To: Lunatic Fringe

Sadly, in America, crimes against money draw longer sentences than crimes against people. Oh, yes, I've already heard the long sad story of all of those unfortunate folks who thought they could be millionairs on their pension stocks. Catch a clue. Life is hard. Ordinary people never get anything for nothing! And the more they think they can, the more they will be taken for the suckers they are.


105 posted on 10/23/2006 2:50:04 PM PDT by Continental Soldier
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To: Ready4Freddy
Not to reinvent the wheel, but a 401(k) works basically like this:

You have a choice in investing your contribution between a handful of approved mutual funds and company stock.

Your company can choose to match those funds.

Your company, if it chooses to match, can match them with cash investments into your chosen mutual fund or it can opt to pay you in stock.

Either way, the matching funds are gravy and the company gives them because it is advantageous to the company from a tax point of view.

What we have in Enron is people who worked for Enron, used their 401(k) contribution to buy Enron stock and also got Enron stock to match.

Basically, they tripled down on Enron.

Because Enron stock ballooned, people who normally would have had 300-400 thousand saved had 2 million in the kitty - all in Enron stock.

These people were taking a gamble on outsized returns.

A rational person would have taken the free Enron stock, but used their own contribution on more conservative investments.

106 posted on 10/23/2006 2:52:12 PM PDT by wideawake ("The nation which forgets its defenders will itself be forgotten." - Calvin Coolidge)
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To: Hydroshock
some people will natter "well, they shouldn't have had all their money in Enron". I can only hope that if one of their loved ones is shot/stabbed/raped no one ever says "well, you shouldn't have gone to a 7/11 at night".
107 posted on 10/23/2006 2:53:58 PM PDT by RedStateRocker (Nuke Mecca, Deport all illegals, abolish the IRS, ATF and DEA)
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To: Continental Soldier
Well said. These people were gambling, hoping that their retirement fund would be 5x bigger than any rational investor could expect.

I would rather have my retirement money invested in a diversified portfolio of blue-chip equities than have one giant bet on a single, highly volatile stock in a company that I work for.

108 posted on 10/23/2006 2:54:34 PM PDT by wideawake ("The nation which forgets its defenders will itself be forgotten." - Calvin Coolidge)
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To: Ready4Freddy
The one thing I will say about the employees who lost a bundle in Enron stock is the stock was overvalued because of the systemic fraud in the first place.

Don't get me wrong, real harm was done. But they can't fairly complain about the total amount they lost from Enron's peak, when it would never have reached a fraction of that peak without the fraud.

109 posted on 10/23/2006 2:56:29 PM PDT by Dog Gone
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To: wideawake
So you've seen a breakdown of where the Enron stock in the plan was, contributory vs match? Otherwise your suggestion that they should have made more conservative investments is well.. speculative. ;>)

A rational person would have taken the free Enron stock, but used their own contribution on more conservative investments.

110 posted on 10/23/2006 2:56:36 PM PDT by Ready4Freddy ("Everyone knows there's a difference between Muslims and terrorists. No one knows what it is, tho...)
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To: RedStateRocker
some people will natter "well, they shouldn't have had all their money in Enron". I can only hope that if one of their loved ones is shot/stabbed/raped no one ever says "well, you shouldn't have gone to a 7/11 at night".

A false moral equivalence and a poor analogy.

You can diversify your stockholdings - you can't diversify your body so that you have three fingers going to 7/11 at one in the morning, two legs safely at home, a torso staying at a friend's house, and your arms and head in a secure warehouse facility.

111 posted on 10/23/2006 2:57:22 PM PDT by wideawake ("The nation which forgets its defenders will itself be forgotten." - Calvin Coolidge)
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To: wideawake
Talk to the Taliban about that one. ;>) Or Jeffery Dahmer

..you can't diversify your body so that you have three fingers going to 7/11 at one in the morning, two legs safely at home, a torso staying at a friend's house, and your arms and head in a secure warehouse facility.

112 posted on 10/23/2006 3:00:14 PM PDT by Ready4Freddy ("Everyone knows there's a difference between Muslims and terrorists. No one knows what it is, tho...)
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To: Ready4Freddy
Otherwise your suggestion that they should have made more conservative investments is well.. speculative.

It isn't speculative at all.

A match is a match - the same nominal dollar amount of equity for every dollar of cash contributed by the plan owner.

Everyone knows that a single stock is riskier and more volatile than a diversified portfolio of similar stocks. Everyone also knows that a value stock is less volatile than a growth stock.

Therefore it is not speculative to say that if your motivation is preservation of your investment over a short time horizon, it is a financially sound decision to invest in a diversified portfolio of value stocks as opposed to putting all your money in a single growth stock.

113 posted on 10/23/2006 3:01:34 PM PDT by wideawake ("The nation which forgets its defenders will itself be forgotten." - Calvin Coolidge)
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To: wideawake
Yes - the sentencing was excessive. The man committed fraud - he didn't murder anyone.

The sentence will be appealed ... he'll probably end up serving 12 to 15.

114 posted on 10/23/2006 3:03:30 PM PDT by BluH2o
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To: wideawake

Show me where they 'tripled down', wa. The only way you could know that was if you'd seen a breakdown of what parts of the funds held Enron stock.


115 posted on 10/23/2006 3:04:23 PM PDT by Ready4Freddy ("Everyone knows there's a difference between Muslims and terrorists. No one knows what it is, tho...)
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To: BluH2o

It will be appealed, but to the 5th Circuit, which is highly unlikely to overturn Judge Lake.

Skilling is toast.


116 posted on 10/23/2006 3:06:07 PM PDT by Dog Gone
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To: Ready4Freddy
Show me where they 'tripled down'

There are two possibilities:

Either an Enron employee put all or most of their contributions into Enron stock, or they put only some or none into Enron stock and put it in mutual funds instead.

People who (1) were employed at Enron, (2) took Enron matching shares and (3) spent all their discretionary contributions on Enron shares tripled down.

Those who declined to invest their voluntary contributions in Enron shares did not put all their eggs in one basket.

No "breakdown" is necessary.

If someone used their contributions over the life of their employment to invest in mutual funds, they did not lose all their money.

If someone used their contributions to buy Enron stock they did lose all their money.

The people who are complaining about losing their lifesavings are by defintion the people who put all or the lion's share into Enron stock.

117 posted on 10/23/2006 3:09:37 PM PDT by wideawake ("The nation which forgets its defenders will itself be forgotten." - Calvin Coolidge)
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To: wideawake

OK, so you're just speculating. Thank you.


118 posted on 10/23/2006 3:11:44 PM PDT by Ready4Freddy ("Everyone knows there's a difference between Muslims and terrorists. No one knows what it is, tho...)
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To: wideawake

Skilling would loved to had you on the jury.


119 posted on 10/23/2006 3:14:18 PM PDT by Orange1998
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To: wideawake

Good grief. Nearly all the people at Enron worked 80-hour work-weeks, generating all that pie-in-the-sky stuff they generated.

No one had time to even do lunch with a friend, much less juggle a bunch of diversified investments, trying to corner the best deal and lowest vig, to make a good impression on an overly critical FR poster later when it was all analyzed.


120 posted on 10/23/2006 3:20:26 PM PDT by Rte66
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To: Ready4Freddy

There's no speculation there that I can see. Enron employees were already getting the company match entirely in Enron stock. They had no choice about that.

Assuming most employees only contributed what the company did, they were already overly invested in one stock, i.e., 50% of the account was in Enron, which is ridiculously overconcentrated.

But many used their contributions to make that lack of diversification worse by using their contributions to buy even more Enron stock.

They did that either out of greed (Enron stock was appreciating dramatically as the chart on this thread shows) or they did it because Ken Lay and others in Enron management were encouraging that, and they didn't know any better.

However, it did violate the cardinal rule of investing large sums of money. Don't put it all in one particular investment.

There's nothing speculative about noting that.


121 posted on 10/23/2006 3:25:23 PM PDT by Dog Gone
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To: wideawake

I can tell you *exactly* what any possible mutual fund investments during that time would have been doing for them - losing them 6% per year, like mine did for 4 years = minus 25% of initial investment.

They believed the fraud and hype of their bosses, who were selling their own Enron stock while telling them to keep buying and drinking the Kool-Aid.

I'm glad I never liked that crew or I would've been right in the middle of all of it, like friends and acquaintances were. Ironically, I wound up the same way, but by a different path.


122 posted on 10/23/2006 3:26:12 PM PDT by Rte66
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To: Lunatic Fringe

"sentenced to 24 years"

Reminds me of that game in Red Dwarf..."Better Than Life".


123 posted on 10/23/2006 3:28:17 PM PDT by mrsmith
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To: Diddle E. Squat
Or a sentence reflecting a logical accounting of the (literally) thousands of persons who lost most of their savings as a result of Enron's illegalities.

Yep, thousands of families affected. I don't know of any serial killers that received less than life after being convicted.

124 posted on 10/23/2006 3:33:24 PM PDT by RGSpincich
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To: Dog Gone

Except that he gets 6-8 more weeks to walk around and contemplate the universe, as he is wont to do.

I didn't even see his ankle bracelet when he spoke just now and walked around. Surely he has it on - they can't be trusting him to come back and have it fitted! Even Martha Stewart showed off her bracelet and where it was chafing her leg.

Egad, he is such pondscum. You should have heard his little pontificating speech to the media a while ago.

*All we needed was an A+ rating instead of a BB- and we'd have had the $2bn-3bn float we needed. That's all! We wouldn't even be here talking if the credit bankers had done it right. Yeah, broadband was a mistake on my part, but if we'd had that other $3 billion, that would've just been a blip.*


125 posted on 10/23/2006 3:34:06 PM PDT by Rte66
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To: wideawake
I'll accept the first flaw you point out but not the second. It was proven beyond a shadow of doubt that the Enron directors abused their power to falsify company records and therefore defrauded shareholders, knowing full well that they were going to drive the company into the ground. It was proven beyond a shadow of doubt that the reported "assets" and "profits" of Enron were inflated by the directors and in many cases, non-existent.

What the Enron executives didn't count on was that they would be exposed before they could fully cash out and that they would be held criminally liable for their actions in the same manner that a bank robber doesn't count on getting caught before they can get away with their money.

126 posted on 10/23/2006 3:43:24 PM PDT by SamAdams76 (The Program is Morally Good)
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To: wideawake
Yes - the sentencing was excessive. The man committed fraud - he didn't murder anyone.

As was noted at NRO.com this afternoon, Lynne Stewart gets a slap on the wrist for aiding terrorists, Skilling gets 24 years. Disgraceful!

127 posted on 10/23/2006 3:47:15 PM PDT by veronica (http://www.freerepublic.com/~starcmc/)
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To: veronica

I guess that's the difference between a Reagan appointee and a Carter appointee.

Vote!!


128 posted on 10/23/2006 3:51:18 PM PDT by Dog Gone
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To: Dog Gone
Vote!!

I did. Today. By absentee ballot. :)

129 posted on 10/23/2006 3:53:11 PM PDT by veronica (http://www.freerepublic.com/~starcmc/)
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To: wideawake

No, Skilling did not kill anyone, but his fraudulence permanently affected and broke the lives of many both young and old. The lives of many retirees were destroyed without the possibility of rebuilding. Skilling is one of the few crooks who received what was coming to him.


130 posted on 10/23/2006 3:55:10 PM PDT by 353FMG (Unity=Life ; Diversity=Death)
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To: wideawake
Yes - the sentencing was excessive. The man committed fraud - he didn't murder anyone.

I disagree. Ruining thousands and thousands of lives is worse than murdering one person.

131 posted on 10/23/2006 3:58:45 PM PDT by NurdlyPeon (Wearing My 'Jammies Proudly)
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To: wideawake
No, it isn't. That punk Skilling is exactly the equivalent of someone who holds up a 7-11; the negligence or lack of wisdom of the person they damage has *NO* bearing on the immorality of their action. There is an assumption of risk inherent in many if not most actions, but that does not exclude a CRIMINAL from full and complete liability for ALL of the consequences of their actions. Any and every thief should get a sentence proportionate to what they stole or damaged. I think he, as with all criminals, should be required to labor as a slave until everyone damaged has been made whole.
132 posted on 10/23/2006 4:01:55 PM PDT by RedStateRocker (Nuke Mecca, Deport all illegals, abolish the IRS, ATF and DEA)
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To: veronica

I can't criticize you, then, since I haven't voted yet. I'll do it on the way home from work tomorrow.


133 posted on 10/23/2006 4:07:18 PM PDT by Dog Gone
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To: Lunatic Fringe
Jeff Skilling, once the smartest guy in the room, is now the smartest guy in the pen

Goodbye and good riddance.

134 posted on 10/23/2006 4:43:30 PM PDT by monkfan
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To: wideawake
Yes - the sentencing was excessive. The man committed fraud - he didn't murder anyone.

That is 24 years PLUS what is basically, 45 million dollar fine.

Excessive to say the least.

135 posted on 10/23/2006 4:52:39 PM PDT by OBXWanderer
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To: taxcontrol

I agree.


136 posted on 10/23/2006 4:57:31 PM PDT by plain talk
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To: wideawake

OK, well-said.


137 posted on 10/23/2006 4:58:06 PM PDT by Husker8877
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To: Hydroshock

They should not have had all their eggs in one basket and they should have bailed out before the bottom dropped out.

I think sentences should be proportionate to the crime and financial criminals should not receive harsher sentences than murderers and treason.


138 posted on 10/23/2006 5:26:10 PM PDT by plain talk
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To: SamAdams76

Not to mention, murder is a state crime and lack of funding sometimes means the release of a murderer well before their sentence is served. That doesn't happen as much in the federal system. Skilling will probably serve at least 15 years before any chance of parole.


139 posted on 10/23/2006 6:08:28 PM PDT by Lunatic Fringe (Say "NO" to the Trans-Texas Corridor)
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To: wagglebee
"They are taking most if not all of his money."

...and giving 20 million to his defense team.

I won't even begin to give you my opinion of lawyers.

140 posted on 10/23/2006 6:13:09 PM PDT by don'tspeak4me
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To: L.N. Smithee
A white white collar criminal is going to serve nearly twice the time a treasonous, Islamofascist symp lawyer is going to serve?

24 years is twice as long as 28 months?
141 posted on 10/23/2006 6:15:05 PM PDT by Xenalyte (Viva Espaņa!)
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To: Lunatic Fringe

According to the legal talking heads on our local newscasts, there is no parole in federal prison. He will have to serve all of it, except any small breaks he earns for good behavior.


142 posted on 10/23/2006 6:40:18 PM PDT by Rte66
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To: Lunatic Fringe

Wonder what he would have gotten if he had just removed National Security records in his socks from the Archive?


143 posted on 10/23/2006 6:48:02 PM PDT by Hattie
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To: Lunatic Fringe

Point of Order:

Under Federal sentencing guidelines Skilling has to serve 85% of sentence i.e. 85% of 292 months sentence = 20.4 years.


144 posted on 10/23/2006 6:56:33 PM PDT by flattorney ( The DeLay Chronicles - Updated 24/7: http://www.freerepublic.com/~flattorney)
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To: wideawake

I don't believe those other people cooked the Enron books and engaged in a premeditated effort to defraud them...or did they.


145 posted on 10/23/2006 7:14:38 PM PDT by Dick Bachert
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To: Xenalyte

Well, I would like to see that particular lawyer sent into the general population with a lot of New Yorkers ....


146 posted on 10/23/2006 7:28:24 PM PDT by RedStateRocker (Nuke Mecca, Deport all illegals, abolish the IRS, ATF and DEA)
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To: RedStateRocker

You and me both!


147 posted on 10/23/2006 7:29:09 PM PDT by Xenalyte (Viva Espaņa!)
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To: RedStateRocker
some people will natter "well, they shouldn't have had all their money in Enron". I can only hope that if one of their loved ones is shot/stabbed/raped no one ever says "well, you shouldn't have gone to a 7/11 at night".

Not the same at all. Investments are by their nature inherently risky, going to 7/11 at night generally is not. Who hasn't heard the caution, "don't put all your eggs in one basket?"

Investing 75% of your retirement nest egg in one basket is felony stupid and entirely their doing. No one forced them to make such a idiot decision. Seems they got burnt by their own greed.

148 posted on 10/23/2006 7:33:42 PM PDT by newzjunkey (Arnold-McClintock-YES 85 Parents Notified-YES 90 Eminent Domain-SanDiego:NO A,YES B & C)
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To: Lunatic Fringe
Skilling oughta be on a jet out of the country of O.J. Simpson, and Lynne Stewart to night!


149 posted on 10/23/2006 7:35:55 PM PDT by Revolting cat! (We all need someone we can bleed on...)
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To: Lunatic Fringe

Of comparative interest, the two people that plea bargained in the horrific February 20, 2003 West Warwick, Rhode Island nightclub fire, that was started by a pyrotechnic device used by the rock band “Great White”, killing 100 people and injuring another 200 in a matter of minutes – they both pleaded no-contest and received 4 years in a low security prison and qualify for a work release program. Under state sentencing guidelines they quality for parole in only 16 months.

Very obvious this country values the loss of money over the loss and injury of innocent human life.


150 posted on 10/23/2006 7:36:08 PM PDT by flattorney ( The DeLay Chronicles - Updated 24/7: http://www.freerepublic.com/~flattorney)
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