Who's Accountable?

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Democratic Senators Barbara Boxer of California and Jon Corzine of New Jersey have proposed that plan assets be limited to no more than 20% of any one stock. Their bill would also reduce tax breaks for companies that make matching contributions with stock and would free employees to sell matching stock after 90 days. Senator Bingaman wants to allow companies to offer financial advice without being liable for investment losses, as they currently are.

Says David Certner, chief lobbyist for the American Association for Retired Persons: "In 401(k) plans, we are asking people to take the risk and responsibility for investing, yet we set up this system where we are violating the first basic rule of investing: diversification." Where company stock is a savings option, employees invest almost a third of their assets in it.

Behind all the front-page headlines last week, Enron was struggling to manage its bankruptcy reorganization. One key all along has been to keep the vaunted energy-trading unit operating. That group accounted for 90% of Enron's revenue, and Friday it was sold at auction to UBS Warburg for a price to be disclosed this week. The courts must approve the sale, however, which promises to spark legal fireworks from creditors, who will want to make sure the company got a fair price. Not that it will matter much to Enron. The company has little chance of emerging from Chapter 11 intact. Says Peter Chapman, president of Bankruptcy Creditors' Service: "Assets are being liquidated for the benefit of creditors." But even if the company disappears, the name Enron will be with us for a while.

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