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CNN Live At Daybreak

Former Employees Tell Congress Enron Kept Them From Selling Company Stocks

Aired December 19, 2001 - 05:48   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: Some Enron employees say they were virtually handcuffed to their company's stock, even as the stock's value went into a freefall.

As CNN's Tim O'Brien reports, they want to know what happened to the rules that were supposed to protect them.

(BEGIN VIDEOTAPE)

TIM O'BRIEN, CNN CORRESPONDENT (voice-over): It was a sad, frustrated and angry group telling a Senate Commerce Committee that loyalty to Enron was a mistake.

CHARLES PRESTWOOD, ENRON RETIREE: It was from rags to riches, back to rags.

O'BRIEN: Charles Prestwood says he lost $1.3 million as a result of the Enron collapse.

Janice Farmer lost virtually all of her $700,000 401k, but even when her trust turned to alarm, she was helpless to do anything about it.

JANICE FARMER, ENRON RETIREE: When I saw the stock drop, I called to sell, and was told that I was locked out. So I had to stand by and watch my savings disappear.

O'BRIEN: Enron says it was a coincidence that it was changing retirement plan administrators just as its retirees were desperate to sell. Labor advocates question that.

DAMON SILVERS, AFL-CIO: Why did Enron go ahead with changing its 401k adviser, apparently on October 17, when Enron itself was controlling the release of the critical information here that opened the gates.

O'BRIEN: The floodgates, that is, for Enron stock, which fell from $82 in January to around $37 in October to just pennies now. Enron's accounting firm, Arthur Andersen, offered little support for its client.

C.E. ANDREWS, ARTHUR ANDERSEN: It appears that important information was not revealed to our team. We have notified the audit committee of possible illegal acts within the company.

O'BRIEN: There wasn't any good news on this day, but Janice Farmer, currently receiving just $63 a month from another pension, gave Congress a new mission.

FARMER: It may be too late for you to help me, but it is not too late for you to take some action to help make certain that this does not ever happen to anyone else again.

O'BRIEN (on camera): Enron officials, including CEO Ken Lay, were invited to testify but declined. They promised to appear later. As one Enron board member confided to CNN, "with shareholder lawsuits pending, we're talking to our lawyers first."

Tim O'Brien, CNN Financial News Washington.

(END VIDEOTAPE)

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