Man Without Qualities

Friday, February 15, 2002

Occam's Update

As noted in a prior post, Sherron S. Watkins now says that at the same time she believed that Enron was withholding invaluable information from the market (information which she, as an insider, possessed) she unloaded tens of thousands of dollars of her Enron stock, thereby risking both criminal and civil liability under various fraud statutes. She says that she did not take her concerns to the Securities and Exchange Commission because she feared that such a move would have only hastened Enron's demise. She has also characterized Mr. Lay as a "dupe."

Ms. Watkins' explanations seem complex, to say the least.

If, contrary to what she has now told Congress, Ms. Watkins did not believe that Enron was withholding material information from the market, then there is no difficulty in understanding her stock sales or her failure to apprise the SEC or her desire to let Mr. Lay off the hook. In that case, her stock sales would not have been tainted by inside information, there would have been nothing to tell the SEC, and she cannot in good conscience impale Mr. Lay.

Enron is a complex matter. Experience teaches that in such cases the simplest answers are usually the right answers.

Fraud and conspiracy theories pose as simple answers, but in reality are the most complex.

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