During the blackout from October 29 to November 13 – which Enron officials claimed they repeatedly announced in a mailing to employee homes and through their internal e-mail system – Enron shares fell from $13.81 to $9.98. Earlier reports said the blackout lasted for three weeks.
“Outside of the brief transition period, Enron employees have always been able to transfer their own contributions in the 401(k) at any time,” the Houston-based energy trader said in a statement. “They have 20 investment options to choose from, Enron stock being one of them.”
However, the company admitted in the statement that an employee couldn’t move Enron’s matching contribution of 50% up to 6% of pay, made in company stock, until he was at least 50 years old.
A Seattle lawyer representing Enron employees called Friday’s statement “a bunch of baloney” in an interview with the Associated Press.
Attorney Steve Berman said 401(k) accounts were frozen October 17, the day after Enron’s release of a $618 million third-quarter loss unleashed an unprecedented descent that prompted the company to file for federal bankuptcy protection December 2.
Enron’s bankruptcy application, listing $49.8 billion in assets, was the largest in US history.
“None of my clients have ever mentioned, nor have I seen any of these reminders that Enron supposedly sent out,” Berman told the AP. He also criticized Enron for the freeze, regardless of whether it was planned or not.
Friday’s statement was the first official comment on allegations made in a flurry of lawsuits that Enron employees were losing large sums of money on their company stock investments during the blackout – estimated in one suit at $850 million.
Enron shares have fallen from a high of $90 in August 2000 to 63 cents Friday, the decline accelerating since October 16 amid a series of disclosures about its deteriorating money picture.