PA and Secretary Community - Deskdemon.com

Film at 11:00.    (Just joking, here).  But, seriously, I think that a lot of the details have not come out to press, yet, so I don't want to start pointing fingers when it comes to President Bush and his administration's involvement, and I don't want to say their hands are dirty in this mess.  I personally don't think they are.  But, when you have big companies like Enron giving a lot of money to both the Republican and Democratic parties, it's just like any other big company making those types of donations.  Andrea, I've seen the American's version of the "news" and I've seen the "other side of the story" from outside the U.S.  It's very interesting to see the slant that's put on both sides.  They only tell you what they want you to hear.  I don't completely trust the press, whether it's coming from inside or outside the United States.  Both have their own twist!  Somewhere in the middle is the real story.  

Regarding Enron:  If you ask me, (from the news I've heard so far) the mucky-mucks on the executive floors of Enron are to blame for all of the downfall.  They knew exactly what was going on, made some bad decisions, behaved unethically, and I hope they pay for it.  They were a client of Aurthur Anderson, and with the corporate politics and multi millions of dollars at stake, Enron asked Aurthur Anderson to play "creative accounting" with Enron's books.  That's not to say that Aurthur Anderson is innocent in this dirty scheme.  They were probably gambling by playing the political Russian roulette game, and ended up getting into mud that was too deep and hoping they could take a risk with these balance sheets and numbers.  The big boys (and girls) at Aurthur Anderson stepped over the line ethically and morally trying to protect their client.  They were wrong, and they should have said something long before $H!+ started to hit the fan.  They should have stood their moral ground and said "no" we won't cook your books.  But, you know how corporate politics goes.  There is probably a lot of incestuous behavior going on between those two companies....

I might be a little premature in saying this, but I hope that the top brass at Enron and at Aurthur Anderson end up sharing prison cells for the next 20 years for the mess they've created!  Can you imagine the ripple effect this one incident is creating in our already shakey-ground US economy?  Trust me, the innocent employees of Enron and Aurthur aren't the only victims here.  All of us will be feeling the tremors from the Enron collapse for a long time to come.  Hopefully those other big companies in somewhat similar circumstances out there will get the message and won't get into this sort of mess!  

Your question about future employability is a good one.  I can't really comment on the Enron/Andersen matter because quite frankly I don't know enough about it but I am reminded of the crash of the Bank of Credit and Commerce - remember that? The repercussions were worldwide but the thing I remember most is the hundreds of ordinary employees of that Bank - the clerks, the secretaries etc who found it so hard to get other employment - prospective employers seemed to take the view that the Bank was dishonest so those that worked for them must be as well.

Regards.

Lemmie.

I believe this is definitely the end of Enron and Arthur Andersen will take a serious hit on this.  I'm not sure if it will be the end of AA because it is a company that has been around for a very long time and has a lot of big name clients that have been with them forever.  Having said that I believe their business will never be the same because people won't trust them and that could definitely bring an end the company.  

Everyone who destroyed documents should be held accountable just not on the same level (e.g. some jail, some fined, some fired, etc.)  

I thank God every day that I got out of Arthur Andersen last year.  I have a few friends over there that are seriously worried about their jobs and I feel for them.  There are going to be a lot of layoffs coming soon.  

Julie

Jewels,

I think that you may be right regarding the layoffs however, I think that the support staff will be spared as they are bigger fish that need to go.  Having worked for AA, you know that they will first let the senior managers and managers go and the partners only if they are part of the problem.  I too have friends that work for AA and the general consensus is that they will survive and their clients will stand by them.   I can only hope, in this economy, that they are correct.

My 0.02

Laura
Deskdemon Forum Board Staff

Some legalaties that I've learned through Business Law and Financing classes (with much communication with my instructors who are also working folks in the real world) is that those folks who put their 401K plans into investments strictly with the company will get something back through the legal system.  Insider trading would be the issue here, if in fact upper levels of the company were telling the lower folks to buy more of their (Enron's) stock.  Also, if they did in fact de-regulate the % of stocks that the employees were allowed to buy, you cross over into another set of federal laws that regulate that specifically.  A company cannot just arbitrarily sell stocks to employees -- there are rules that regulate how much stock any employee can purchase at various times.  So, those folks that did end up putting more of their money into Enron just before it capsized (or at least started sinking) will have some avenue available for them through the courts.  The problem?  Limited liabilities for partners and boards (different company set-ups have different liability laws) may affect who and how much gets reimbursed.

CountriGal
Deskdemon Editorial Board Member

That's all well and good Keena, and yes, that is the law, however looking at the track record for insolvent companies and the relative recovery via the legal system takes more than quoting from a text book.  The simple fact of the matter is, there is no infrastructure left to handle any potential litigation.  Those that do initiate a suit will be large entities, not the little guys who lost their shirts. Even a class action, will prove fruitless(doubtless taking years and refunding literal pennies on the dollar of investment).

Quoting the law to these people is cold comfort indeed. It solves nothing, once again, the little guy is gonna take it on the chin and the only ones who will receive any kind of justice at all are those who don't actually need to recoup the money they've lost.

And I do realize that, hence me putting the last line in there regarding the problems...  But it also helps in other avenues because those who broke fed laws on how much and who could purchase can and should (I sincerely hope) be held responsible in fed court and end up with jail time, at the minimum.  Not thinking litigation here, thinking hard time for folks who played God with others savings.  Which is what others were stating too... I just looked at it from another viewpoint.

CountriGal
Deskdemon Editorial Board Member

It is also my understanding (and correct me if I'm wrong) that Enron gave their employees more Enron stock instead of cash in their 401-K.  If that's the case, then I'd be really mad.  Not only would I be losing my hard-earned money, but the company I trusted to look out for my future gave me air instead.  I know I've learned a lesson from this.  When all this hit the fan.  I took my 401-K and divided it up evenly through the different levels.  I also took my other savings and made sure they were also diversified.  After the stock market upset, 9-11, and this I'm seriously considereing the "under the matress" Bank.

Also, if any of the people are charged and convicited breaking the law, there will be a lot of civil suits brought against that individual(s).  Plaintif may not win, but I'll bet $.50 that the defendant(s) will spend all those millions they thought they saved on lawyers fees.  Anyway you look at it, it will boil up to a "What comes around, goes around".


Ellen in TX

Don't put it under the mattress, ellen!  Just make sure you are w-e-l-l diversified.

GE,

You make a good point which kind of leads into what I wanted point out.  What I get from this huge mess is a HUGE slap in the face reminder that the stock market is just like gambling.  Only put in what you can afford to lose - and that includes investing in your own employer.  Each time I have had a 401k plan introduced to me, its been the spiel of high risk, high return.  What they forget to point out is that any investment is a risk and every investment has a risk of loss.  Many of our employees who participate in 401k have lost thousands in the past year.  And many of these folks neglected to fully educate themselves on the risk of loss.  All they heard was the high risk, high return get rich quick speech.  I asked so many questions that the rep "couldn't/didn't want to/wasn't prepared for" that he hates to even deal with me when he calls the office.  Because of his attitude towards my questions, I don't trust him and have chosen not to participate at this time.  Unfortunately, I know I'm not getting any younger and need to start looking ahead.

If you have money invested anywhere, you need to pay close attention to what is going on with those investments.  You need to educate yourself on how the stock market works and ask questions of your plan administrator.  If not, you could very well end up like these poor lemmings at Enron.  I have to wonder how many of them actually saw the signs and chose to ignore them because of the promise of big $$$.  I mean, c'mon, just because my boss says to put my money in such & such fund doesn't mean I should blindly do what he says.  Its my money, not his.  If it goes south, I lose, not him.

Nothing is infallible.  NOTHING!!


Michelle

I firmly believe in the 401k program IF it is administed by a trustworthy person at your company, IF the plan administrator is strong, and IF you, the participant becomes and stays educated about where you have your money invested, and trends in the market(s).  It is YOUR investment and YOU need to stay up to date on what is happening not only with the types of investments you have but the companies those investments consist of as well.  

Yes, this is a risk.  But is social security going to be here when I retire in another 25 years?  That is a risk also.  I have a lot more control over my 401k than I do the social security system.  I will accept the risk and responsibility for such.

I do think that the high ups at Enron deserve to be punished for their wrongdoing.  That is the American way.  I hope they get paid back for all the heartache they have caused.

cdalhamer

I agree that 401k is a good investment.  But there are so many folks out there that don't get the real picture.  Its not a savings account.  Any money you put in it may not be there a month later.  I have chosen not to participate in ours because the administrator was annoyed that I asked questions.  That told me that it was not going to be administered well.

However, you are right about Social Security.  We have no guarantee that it will still be here in 20 or 30 years.  The main point I was trying to make is that any person who invests money should be on top of those investments.  Notice what is going with the companies and ask questions.  Anyone who doesn't, is only asking for trouble in my opinion.   No I don't believe Enron's employees deserved what they got, but I still have a hard time believing they didn't see some signs.  This problem didn't happen overnight.

Michelle

According to some of the articles I've read, the CEO said in a press release that the company was doing great and that they had a big future ahead of them.  The next day they announced all the problems they had.  They also put a freeze on the stock so employees could not sell their shares.  Enron hid this very well for a long time.

Ellen

mlm - you are right that, like writing wills and buying insurance, learning about finances is something a lot of people avoid.  Our company hires an outside financial guy to come in once a quarter and meet with people who want to learn more or who want guidance on making decisions relative to their individual plan.  I don't know whether this is obligatory by law, but I almost think it is.  You may want to dig into the laws surrounding this stuff and encourage your employer to set up at least an annual meeting to educate folks, or to get literature that would do the same.  

Unfortunately, in the 401(k) area, the old saying, "You can lead a horse to water, but you can't make him drink," is very true.  Our company has a tremendous 401(k) plan and match, but many feel that they can't afford to put the % match into it.  I convinced one single mom to at least check out with payroll what effect contributing the match would have on her paycheck, because I didn't think it would be much.  She then increased from 1/2% match to the 6%.  Previously, she was convinced that she couldn't afford even $1 more a month (yet she was smoking about $6 of cigarettes a day . . . yes I mentioned that after asking permission to comment on a personal observation that might help her put things into a different perspective).  She won't be a millionaire at the current rate she's going, but something is ALWAYS better than nothing.  I have to remember that if I had never worked with finance people, I might still not be preparing for my retirement, and that is a scary thought.  I guess all there is to do, mlm, is talk to one person at a time until our respective little corners of the world are covered.  Ciao!  GE

Having several freinds that have worked both at AA and Andersen Consulting (which broke off from AA to form another company,  does this tell you anything?)..I really don't see this as the "end" for AA, but it will be the beginning of a very, very long uphill battle to regain confidence and marketshare.  After all, you can't be known as "the Firm", and not retain some clout.  But Enron...well, that's just another in a very long line of business failures, both on the large and small scale.  And it probably won't be the last!  You just have to be mindful of the baskets your eggs are in at all times.  But I really do feel for those people that will loose any gains they may have made.  I hope there is some recourse for them.

Which brings me to another point....in most mutual funds, (and 401K's) you always have the option of opening a money market acount within the fund, and move your money into it so you don't loose it when the market becomes voliatle.  You would be earning much less...but EARNING nonetheless.  Then when the market picks back up, you can start to "re-buy" shares in the mutual fund again.  I was lucky enough to have done this when we rolled over from my old company to the new. I haven't lost a cent! (Let's call it a very happy accident!) And as the old saying goes, no one will take care of you as well as you can! And folks, I say this to you with nothing but your financial well-being at heart!

Here's a toast to a speedy financial recovery to all of us...and the companies we all work for!

Daisylee

Three months later and the fire is a little hotter. AA has been indicted, clients are leaving (though not a mass exodus), and employees are fiighting back with email, voicemail and presence on the capital steps.   Lou Dobbs made a powerful commentary last night on Moneyline and there are still talks of mergers, bankruptcy, and spin-offs.  What do you think of the latest news and what is your opinion what has happened.
Should Enron or any of the officers have been the indicted ones?  Is AA the only one that should be held accountable?

Laura
Deskdemon Forum Board Staff

I also heard at one point that Deloitte & Touche was looking into buying out Arthur Anderson, any truth to that rumor?  If they were wise, they would stay clear of AA name and just go after as many clients as possible when they leave AA.



Chris68
Deskdemon Forum Board Staff