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US sues Enron, former executives over pension losses
Washington, June 26: The US Labor Department sued Enron Corp and about 20 of its executives today on charges they helped cause the loss of millions of dollars from the failed energy trader`s pension plans.
Washington, June 26: The US Labor Department sued Enron Corp and about 20 of its executives today on charges they helped cause the loss of millions of dollars from the failed energy trader's pension plans.
Labor secretary Elaine Chao said the suit, filed in a Houston, Texas federal court, was the first to name Enron's former chief executives Kenneth Lay and Jeffrey Skilling and former members of the firm's board of directors and the committee that administered its retirement plans.
"Enron employees had a right to expect that their retirement savings would be managed with prudence and without destructive conflicts of interest," Chao told reporters.
"Today we seek to vindicate that right."
The company had no comment on the suit.
Labor department officials said the civil suit sought to recover losses suffered by Enron workers because of alleged mismanagement of two of the company's main pension plans.
The department, in a statement, alleged the company and executives violated the 1974 Employee Retirement Income Security Act (ERISA) in two ways.
They failed to "consider the prudence of Enron stock as an appropriate investment for the retirement plan," the department said.
Additionally, they "did nothing to protect the workers and retirees from extensive losses" even after it became clear the company's stock would tumble amid accounting scandals, it said.
The 46-page complaint accused lay and others of withholding information about Enron's financial situation.
Bureau Report
"Enron employees had a right to expect that their retirement savings would be managed with prudence and without destructive conflicts of interest," Chao told reporters.
"Today we seek to vindicate that right."
The company had no comment on the suit.
Labor department officials said the civil suit sought to recover losses suffered by Enron workers because of alleged mismanagement of two of the company's main pension plans.
The department, in a statement, alleged the company and executives violated the 1974 Employee Retirement Income Security Act (ERISA) in two ways.
They failed to "consider the prudence of Enron stock as an appropriate investment for the retirement plan," the department said.
Additionally, they "did nothing to protect the workers and retirees from extensive losses" even after it became clear the company's stock would tumble amid accounting scandals, it said.
The 46-page complaint accused lay and others of withholding information about Enron's financial situation.
Bureau Report