The former director of investor relations for Enron Corp. on Wednesday agreed to pay a $1.49 million fine to settle fraud charges, according to the Securities and Exchange Commission (SEC). Mark Koenig settled with the SEC without admitting or denying the charges.
The SEC action was brought in coordination with the U.S. Department of Justice Enron Task Force, which filed a related criminal charge against Koenig. He agreed to enter a guilty plea in connection with that charge and to cooperate with the government’s continuing investigation. As part of the settlement agreement, Koenig has been barred from serving as an officer or director of a public company.
According to the SEC, Koenig participated in a scheme to defraud the public “when he disseminated and approved the dissemination of false and misleading information to the public about Enron’s business in earnings releases and analyst calls.”
Specifically, the SEC alleged that in his role as director of investor relations and as an executive vice president, “Koenig was responsible for drafting and preparing portions of Enron’s earnings releases and analyst call scripts.” Koenig was responsible for reviewing and editing Enron’s 1Q, 2Q and 3Q 2001 earnings releases, and scripts for the March 23, 2001 analyst call and the 1Q, 2Q and 3Q 2001 analyst calls.
“During his efforts, Koenig learned specific information about Enron’s retail energy business unit, Enron Energy Service (EES), and its telecommunications business unit, Enron Broadband Services (EBS), revealing that EES and EBS were not the successful business units described in the earnings releases and scripts, and as described by Enron in the analyst calls. Nevertheless, Koenig did not correct the false and misleading information provided to analysts and investors in the earnings releases and analyst calls, and affirmatively made false and misleading statements about these two businesses during the calls,” the SEC said.
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