Search the Internet          Tips  Sites: Finance, Investment

Employees file class action suits against Enron

T V Parasuram in Washington

Enron now faces class action suits filed on behalf of its employees who have suffered heavy financial losses because part of their retirement funds -- administered by the management -- was allegedly invested in shares whose value is now down from $90 a share to $5 a share.

The embattled Houston energy and trading company has been accused in the suits of not informing plan participants that the company stock was in peril.

Enron refused to comment, saying that its corporate policy is not to comment on pending lawsuits.

The employees' suits against Enron are the latest in a series of suits filed against the company over losses in the company-stock portion of their employee retirement plans.

Enron recently agreed to be acquired by Dynegy Inc of Houston because of mounting financial losses.

Under Federal pension law, companies are allowed to offer their own stock in retirement plans, and are allowed to force employees to hold onto the stock.

Enron doesn't let employees diversify shares they receive as matching contributions to the plan until age 50.

However, plan trustees are supposed to operate the plan in the best interest of the participants.

The Wall Street Journal noted the company's stock has fallen, amid mounting losses and disclosures that it had extensive off-balance sheet dealings with a web of partnerships headed by former company officials.

The Securities and Exchange Commission has launched a formal investigation into the company's accounting, and Enron has said it will restate years of financial information.

Tell us what you think of this report