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Academic
: ConglomerateEnron's Lou Pai -- The Rest of the Story
By Gordon Smith, Christine, Hurt, Vic Fleischer, Fred Tung, Lisa Fairfax, David Zaring
If you saw Enron: The Smartest Guys in the Room, then you may well remember the discussion of Lou Pai, head of Enron Energy Services, left Enron at the top of the market and sold his stock as part of a divorce settlement in spring of 2001 to the tune of almost $300 million. As you may remember, the Fall of 2001 was not good for Enron (or Enron shareholders). The same stock of course would have been worth less than a $1 per share in December 2001 (and worth twice as much as he sold it for had he sold in 2000). The documentary makes Pai seem like the "smartest guy in the room," as he headed out of Houston to buy a mountain in Colorado.
Pai was never indicted in any of the criminal proceedings, and he was dismissed as a defendant in the ultimately unsuccessful Enron shareholder suit. However, he was the target of a civil SEC investigation for insider trading, which he settled this week for $31.5 million. If the SEC really had evidence that he broke insider trading laws by selling stock worth $280-plus million, then $31.5 million seems like a small price to pay (seems less than sales tax in Chicago these days). However, as much of the Enron criminal prosecutions are proving to have only symbolic long-term value, perhaps the Pai settlement is symbolic as well.
Full post as published by Conglomerate on August 01, 2008 (boomark / email).

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