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| 2002 News and Press Releases |
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HEADLINE ARCHIVED:
Duffey Promises New Push To Punish Corporate Fraud
By: Janet L. Conley
Fulton County Daily Report. November 6, 2002
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EXCERPT: Tom Padgett had lovely plans for his future. After 30 years of working in the petrochemical industry, Padgett had intended to retire last June at age 59. Now he expects to keep working for another 10 years. Padgett had planned to help pay for his grandchildren's college education and to offer financial assistance to other friends and relatives. "Now," said Padgett, "we have to concentrate on helping ourselves." What happened? Padgett was an employee of Enron Corp. and, over the years, he had transferred almost all of the money in his 401[k] account into Enron stock. The value of that 401[k] has plummeted from $650,000 in December 2000 to $15,000. He has joined a class action against Enron, hoping to recover all the money he's lost. "But I'm realistic enough to know that won't happen," he said. "Hopefully, we'll get half of it back." It is unlikely that Padgett and the thousands of other disappointed shareholders will be able to recover anything close to 50 cents on the dollar, according to two recent studies on securities class actions. These reports indicate that securities class actions-which have many similarities to ERISA suits brought by disgruntled 401[k] owners such as Padgett-typically recover damages worth just 5 percent to 6 percent of a stock's market decline. Moreover, various complications may reduce any recovery in the Enron suit and in the well-publicized civil suits against other troubled giants such as Tyco International Ltd., WorldCom Inc. and Adelphia Communications Corp. Plaintiffs' attorneys said it is far too early to estimate the amount of any potential recovery; discovery hasn't started. But they express optimism, disputing the results of the studies on class actions and pointing to legal strategies that, they say, may increase the recovery in these particular cases.
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