Investors Have Lost Faith

June 25, 2002 ( - The Enron scandal and subsequent investigations of possible wrongdoing by a number of publicly traded companies has taken its toll on investors, a new survey found.

According to the poll by online research firm InsightExpress, three out of five investors believe companies are artificially pumping up their stock price by keeping secret company financial information from the general public.

Not only that, but nearly 60% of investors polled believe chief executive officers (CEO) don’t have shareholders in mind when they make decisions. They’re motivated by their own short-term personal gain, respondents said.
Some 75% said a CEO’s actions directly reflect his or her company’s operations; only 32% of respondents generally see CEO’s as trustworthy.

That’s particularly important since almost 75% of respondents said investors should consider a CEO’s credibility when making an investment decision.

The InsightExpress survey also found:

  • 54% of investors believe that CEO’s are fully aware of their company’s accounting, revenue recognition, and investment activities
  • 65% of investors believe that it is likely that there will be more Enron-like situations within the Fortune 500 before year’s end

The survey was conducted online among 300 investors in late June 2002.