Brief Says Execs May Be Liable for Losses
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The Labor Department filed a court brief that says Enron Corp. executives could be personally liable for retirement plan losses by workers who are suing the company.
The Labor Department’s friend-of-the-court brief, filed in federal court in Houston, says if executives continue to offer company stock as an investment option in its retirement plan with knowledge of Enron’s problems, “They are personally liable for the losses.”
The filing details the government’s position on employers’ responsibilities to company-sponsored 401(k) plans and for the first time outlines its position on the Enron case.
Many workers lost retirement savings that were heavily invested in Enron stock as the price steadily declined last year. Overall, the 20,795 participants in Enron’s 401(k) plan had about 63% of their assets invested in company stock.
The court brief was written in opposition to motions filed by former Chief Executive Kenneth L. Lay and others to dismiss the lawsuit.
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