Survey Supports 401(k) Enron Reforms

March 21, 2002 ( - Four out of ten respondents to a recent survey said lawmakers need to bar companies from locking employees into sinking 401(k) investments.

That was the scenario with Enron where employees lost millions of dollars when the value of Enron stock in their 401(k) accounts plummeted as the once giant Houston energy trader’s finances disintegrated. The employees weren’t allowed to sell the stock despite its price decline.

According to the survey by Peter D. Hart Research Associates and Public Opinion Strategies for Deloitte & Touche, other issues ripe for Congressional reform include:

  • dealing with investment banks, which advise clients to buy stock whose price is dropping, cited by 29% of the sample,
  • corporations making political contributions, mentioned by 28%,
  • companies giving extra rich compensation packages to executives, listed by 26%, and
  • companies hiring the same company for auditing and consulting services, mentioned by 20%

With the many questions raised about Enron’s accounting practices and corporate audits conducted by the now-beleaguered Arthur Andersen, 87% of respondents pushed for Congress to make it a crime to lie to auditors and for auditors not to report corporate wrongdoing when they discover it.

The poll included comments from 800 registered voters.