In the lawsuit filed in Houston federal court, attorney Steve Berman alleged that the Enron and Anderson officials conspired to keep private news of Enron’s financial problems. That led to Enron workers losing $1.3 billion in retirement savings, the lawsuit charged.
The beleaguered energy trader is now seeking federal bankruptcy protection after its finances collapsed and the value of its stock plummeted.
Berman, of the Seattle law firm Hagens Berman, listed 100 plaintiffs in his court papers and indicated his intention to eventually represent 21,000 Enron savings plan participants in a class action.
Other allegations in Berman’s lawsuit include that:
Anderson’s chief auditor David Duncan repeatedly certified false financial statements to help cover Enron’s debts and losses, while Enron CEO Kenneth Lay knowingly used that false information to promote the overvalued Enron stock to employees,
several Enron officials violated racketeering laws by contributing shares they knew to be worthless to the Enron savings plan,
Enron violated ERISA by not adequately warning employees in advance that they wouldn’t be able to sell stock shares between October 17 and November 19, and recordkeeper Northern Trust, also named as a defendant, should have blocked the lockout since it knew of Enron’s precarious finances,
Enron and Anderson executives conspired to save Enron hundreds of millions of dollars in savings plan contributions by donating what they knew to be worthless Enron stock, the suit alleges.
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