On top of the ongoing investigations by the Securities and Exchange Commission (SEC) and departments of Justice and Labor, two senators now have called on the Federal Trade Commission (FTC) to launch a probe into Enron Corp. and its officers and directors to determine whether any federal fraud and consumer protection law violations and other irregularities occurred leading up to the collapse of the former energy giant.

Sens. Byron Dorgan (D-ND) and Fritz Hollings (D-SD) urged FTC Chairman Timothy J. Muris to take this action immediately following a hearing by the Senate Commerce Committee last week, during which Enron investors, employees and retirees told of the millions in 401(k) pension funds and investments that they lost when the company barred them from selling their shares last fall as the value of Enron stock began to plunge. In all, it’s estimated that more than $60 billion in Enron stockholder equity was lost.

Specifically, the senators asked the agency to explore “whether the company, through the actions of its officers and directors, engaged in any unfair or deceptive acts or practices, or any unfair methods of competition, as are prohibited by Section 5 of the FTC Act, or any other conduct that the Commission would deem to be harmful to consumers.”

While the SEC has oversight over federal securities laws, “we believe that the impact of this failure extends well beyond possible violations of securities regulations. The charges against the company include allegations of commercial fraud, inaccurate and misleading disclosures, unlawful accounting practices, and illegal partnerships with third-party entities,” Dorgan and Hollings said in their Dec. 21 letter.

In addition, they noted that a witness at last week’s hearing “leveled charges of conflicts of interests at several groups that were connected to Enron. These include: 1) company officials that served as officers of the company while also profiting from the company’s outside partnerships; 2) the company’s accounting firm, that functioned simultaneously as the company’s accountant and as a paid consultant to the company; and 3) financial institutions that had a financial stake in Enron while simultaneously promoting the company’s stock to consumers,” the senators noted.

In light of these allegations, “we believe each of the federal government’s major law enforcement and consumer protection agencies must be involved in investigating Enron’s operations.”

The Senate Commerce panel’s Subcommittee on Consumer Affairs, which Dorgan chairs, plans to hold a another hearing into the Enron financial collapse on Feb. 4, at which time Enron Chairman Ken Lay has promised to appear.

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