Motley Fool Withdraws April 1 Lawsuit!
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Dear fellow Fools, We are withdrawing our class action lawsuit -- launched on Saturday, April 1 -- against the U.S. government on behalf of Enron executives. In fact, we'd like to announce that we never had any intention of mounting a legitimate defense of Enron. That's right. The entire Motley Fool suit against the U.S. government: ... was all part of our annual rite of spring: Our April Fool's Day joke. As we've done in the past (with fluffy IPOs, mutual fund underperformance, and the sad truth about lotteries), we used an important subject as our springboard, doused it liberally in folly, and, most importantly, used the ruse to shine the spotlight on an important topic for every investor. Our apologies to those who cleared their calendars for The Million Ken March. We will now share in detail the lessons of our prank, as well as your many responses! Truth is scarier than fiction In 2001, Bill Mann presented Enron as Icarus, showing how management teams more focused on appearances than on good corporate governance are destined for spectacular flameouts. Whitney Tilson argued that Enron was a stock to avoid long before its funky financials were discovered. We kept up with the investigation and even testified before the Senate Commerce Subcommittee on Consumer Affairs. And yes, early on, some of us even fell for Enron's lies. Whether you're convinced by the government's case or not, there is no question that Enron's leadership was arrogant, cynical, and selfish. The combination of those traits has led to some of the greatest commercial frauds in human history. In pulling together our April Fool's joke, we decided to embrace all four of those traits -- creating a class action suit from which we stood to benefit the most; making a completely indefensible argument based on self-interest; and attacking others. This approach is exactly what raised the ire of many readers over the weekend. Many emailed and posted on the discussion board to remind us of our mission. We now share a collection of the responses to our April Fool's Day spoof. They didn't get the joke Dear David and Tom Gardner, I have lost respect for you. -- DC I am extremely disappointed. I thought you were about helping the average Joe Blow out here that was trying to learn how to invest. Now I see you supporting the scumbags that invented all kinds of shady dealing with "creative" accounting practices. You should know that most people would feel about this action the same way we did about President Bush supporting the port security run by a company with strong ties to the Arab world. Bad move. -- HP Dear David & Tom -- Dear Tom and Dave, You are nuts. The company was going to implode anyways. If the business was robust, blowing the whistle would have had no effect. I suspect that many, if not most people, outside the USA scratch our heads and wonder what is going on in your country. Feels like Rome before its fall. Have you thought of taking responsibility for your own actions. ... Or do you sue every time, since somebody has got to pay ... -- KG Dear Gardners, I have 3 signers of the Constitution of the U.S., and my great, great grandfather started the textile industry in the South in 1837, so I am not unfamiliar with commerce and business in the U.S. It is an awful shame that apparent trailer trash think the only way to happiness is $$$$$$$$$$$$$$$$$ -- no matter how it's gotten! They never learned the basic principles of honesty, patience, frugality, and INTEGRITY. It is truly a shame that they squandered their obvious and God given talents to cheat their employees and make a mockery of the Stock Exchange. I'm quite sure they never imagined in their wildest dreams, they would be caught and prosecuted, as we still have, thankfully a wonderful system of checks and balances, and God definitely has a great sense of humor. I hope the proverbial book is thrown at them, to drive home the idea to others, there's a price for eveything, including fraud in business! -- M i understand the principle of your argument, but it's completely lost by making it on behalf of Enron -- and Kenny Boy. Kenny Boy did lie (allegedly)... Enron did commit fraud (allegedly) ... go find another company -- one that isn't corrupt and fight on their behalf ... or are you doing this just for the publicity? ... and speaking of publicity, stop blaming reporters. you sound as stupid as Fox News. I look to the fool for investment advice-not to be a political think tank, and certainly not to be a media watch group. -- FS You guys are really out in left field on this one. My first thought was the whole [thing] is a dumb parody/satire or bad joke or something. My second thought was (and is) -- if these guys are so whacked out to file such a stupid and inane lawsuit why should I listen to anything they have to say about investing. You better think twice about what this action is going to do for your reputation. Hmmm ... on the other hand wouldn't this be a neat way to get free attention for a failing "foolish" business enterprise. In our perverse world negative attention can be as valuable as positive. -- O I find it astonishing that the Fool can so easily overlook the criminal activity that existed at Enron and likely exists at some other large corporations. I find it completely inexcusible for a corporation to blatantly overlook, and rewrite information in their balance sheet to the extent that Enron did. I suppose it is true that many employees made lots of money with the dramatic raise in Enron's stock price over the years, but this doesn't change the fact that it was all a house cards. The employee investments you are refering too, was retirement savings. Not simply the investment of disposable income. In the day of 401(k)s and IRAs, it would be terrible for the courts to send the message that blatant lieing and deception is OK when it comes from corporate executives to the shareholders. The executives held the cards and knew the truth all along. I fail to see how the average shareholder benefits in the long run in this playing field. -- L.O. Disappointing to see people who seem to give sound investment advice, go crazy on this. I believe you are wrong! -- TE Dear Tom, David, Bill, & Motley Fool Staff, Dearest Fools, It appears you people have gone mad -- next you'll be claiming Michael Millken didn't clearly break security law. -- WH OK, I am openminded to your claims, but so far the articles on TMF have not convinced me. This is your April Fool's Joke, Right? -- GB They barely got the joke I actually spent about 15 minutes reading through the various articles addressing the class action lawsuit against the government. I was more than a little confused, but intrigued that an organization as credible as the Motley Fool would make such a claim. Suddenly, I noticed that every article was written on the same day -- today. I felt lucky that I had stumbled on this monumental day when investors would take on the government. Then, I noticed the date. ... Thanks for the laugh. -- AH I can't stop laughing at you fools. They say a sucker is born every minute, and apparently they all work at The Motley Fool. I now do not trust the opinions presented at Motley Fool. My initial reaction is, are you out of your minds? I do, however, have alot of repsect for what the fool has done to date, so I have not just junked you into the same bin as the guy who stands on the corner downtown trying to make us all realize that we were duped and that the world is really flat. I perused the information you have offered to date, however, and other than trying to drive the elephant of Enron's misconduct through the loop hole of rule 346(a-7.2), I have not seen much to cause me to cast aside my pitchfork and torch. I did, however, feel your attack against whisleblowers was mean-spirited and unfair and supported with no facts at all. I have seen what generally happens to whistleblowers in corporate America, and usually it involves no fame or money, only hostility and the need to find a new job and the knowledge that you did something right even when it was against your best interest to do so. Guys, Nice try! :) I almost bought it. Happy Fool's Day! Hahaha! -- VA Dear Fools, It is April fools day after all. So I'm hoping this is just a Fools sense of humor and not a couple fools tilting at windmills. -- KD This has got to be an April Fools joke. When I read who can qualify I knew it. Have Foolish fun -- JH To think that I believed my non-believing eyes for about one minute before realizing that it was April 1!!! -- A They knew what we were up to Dear Motley Fool: I own multiple similar business that have strived to meet my greedy expectations through creative finanical engineeering and they have been thrown under the "Enron Bus"! There goes my $%&*%%$*^* dreams of retiring at 25 and I'm condemned to my cubicle to 33 at least. Death to the Feds! -- C I so look forward to this day each year. Not for the pudding that my kids put in my shoe or the flat caused by my neighbor, but because of the Motley Fool's annual gag. Not as good as Shakespeare's stocks, but comical none-the-less. -- JR I wish more companies would take a page from Enron's playbook. We'd all be better off for it! -- H Look, I knew Ken Lay, and he is a great man! Well, at least I knew the Ken Lay YMCA, where I used to work out in Katy, a suburb of Houston. Anyone who has a 'Y' named after him has to be a great man, right? It got so awful that I stopped going to the gym, gained forty pounds, and finally, fled Houston for Austin, a much safer town with far fewer Enron executives running around. I am still afraid to work out, for fear of stumbling across a sweaty Enron-exec on the next treadmill. I claim damages for ill-health brought on by being overweight and afraid to enter a gym. -- TK My losses due to U.S. government interference with Enron amount to $1,400,000,000. If you don't belive me, you can confirm this with my accountants at Andersen. -- AD Beautiful ... just beautiful! Almost as good as the plunger-waving masses ;). -- RP Just hilarious! I knew there was a reason why I liked your site. -- SH I was enRaged to see a white collar paragon of society nailed by U.S. injustice once again. Ken Lay was a shining example of outstanding corporate leadership and though I never had shares I want to be compensated for opportunity loss by Uncle Sam. Here's my figurin': if I'd put a million bucks into Enron in 1992 (my year of graduation) and sat tight until now that investment would have risen by at least 5000% or there abouts – that if they hadn't locked up the main man. Now Lay is just laying around all day wasting that integrity. Seeing him marched out of that court-house made me feel like I'd been French kissed at a family reunion. I'm disgusted and need compensation. I hereby file for damages of no less that US$550,000 and not exceeding $2,550,000. On receipt of said funds I will procure the following: Shouldn't we add, "Significant proceeds from the class action lawsuit may be used to provide former Enron leaders a penthouse suite at "Club Fed." ? These "hero's" of corporate America just can't go around in orange prison dress suits, now can they? It just wouldn't befit their status. We could at least give them an orange tie to go with it! -- JM My 23 grandchildren (some of whom are employed by the federal government) have suffered great mental anguish due to the action of the "feds" in hounding the businessmen who valiantly tried to keep Enron stockholders and employees solvent and worry free. MARCH ON FOR JUSTICE! -- B You guys have outdone yourselves this year! Every April 1, I wait with anticipation for the subject of this years "foolish" message, and this is a great one! In my opinion, it's only outdone by the "80% of the mutual funds DO beat the market!" letter! -- TE NEXT TIME YOU SEE KEN LAY AT THE COUNTRY CLUB PLAYING GOLF WITH HIS CRONIES TELL HIM I SAID WASSUP POP. -- RM You guys are my heroes. It's a shame April Fools Day only comes around once per year. -- AS I think it's April the 1st. What do you think? -- AE
While we had some guilty fun preparing our joke for you, we all acknowledged that what happened at Enron is serious business. By all of our analysis, Enron was one of the biggest frauds in American history, and more than just these few leaders deserve to spend time behind bars.
You have got to be kidding me. You should be ashamed. I think I just spent my last day at the fool.com. -- PL
I am a long-term Fool reader and subscriber. I have developed both comfort level and trust in the integrity of your site. This leaves me concerned by what appears to be a crusade on behalf of Enron executives. The strength, expanse, and variety of activities leaves me wondering whose bread is being buttered and why.
You may well be right that Enron did nothing wrong. I haven't yet explored your arguments. BUT-class action lawsuit? million ken march? These sorts of hyperbolic plans, along with a complete lack of disclosure make me wonder whether you or other Fools are friends with Ken Lay. Are you? Related to him? Business dealings? Did you lose money on Enron stock? See what I mean? You are failing in the fundamental standard of disclosure that you promote to others. I don't know (and you haven't told us) whether you are interested or disinterested, whether you are enraged in a spirit of public service, or whether you have a dog in the fight.
And the idea of a $100 billion lawsuit against the federal government by the hundred million Americans who were scared away from the stock market is frankly, kindergarden hour. The Federal goverment is "owned" by us, gentlemen. If a silly lawsuit like that were ever to win and collect, we would all pay with higher taxes or debt, enrich lots of lawyers, and have a bunch leak out in governmental friction. C'mon gents, I thought better of your financial acuman. So far, you've piqued our interest. But you have some ground to cover in the area of disclosure and recapturing the integrity high ground. We're waiting. -- JW, Chairman (FD Corp)
You do what you know so well. I am sorry to learn that you are entering the political arena. I am sure you do not see it that way. I do. Yes, Skilling and Lay have been tried and convicted in the court of public opinion. However, the judicial system has been built to handle cases just like this. Please, do what you do best and leave the rest to those who are trained and expert at it. This is not your field. -- SB
Whether you do or do not have a legitimate grievance is not important to me. You are using circular reasoning to justify your law suit. What do I mean? If you're claiming that I lost money as a stock holder or wage earner because of the legal actions of the government then you are probably right. Let's go ahead and pretend like it is a fact that I lost money because of the governments actions. What do you think will happen if you file a class action law suit against the government? Instead of taking down a one billion dollar company, you are costing the average tax payer, "ME" more money and that's a best case scenario. I can think of much worse! In the article you referred to rounding as accepted accounting principals; are you referring to 10cents or 10 million dollars? I once applied at the Fool because I value your opinions and wanted to be a part of something special. I value your opinions because you seem to look at all the facts but this time you've left out the big one while including it in some odd since. Tax payers got screwed so we should fix it by screwing tax payers again. Hey, when this one is over can we have the government counter sue someone else; we could really screw the emerging bull market that way. I'm graduating in May and trying to build a future for myself but your lawsuit will take away from my bottom line one way or another; whether it's through taxes, finding a job or killing my bull. -- JB
I'm a new subscriber and was truly saddened this morning when I became aware of your stance on Enron and the practices of its former executives. I'm not a former Enron shareholder, nor did I ever trade in Enron, and so I'm not "feeling the pain" as many do. I did however own and hold (a substantial amount of) WCOM as it went bankrupt, along with 2 or 3 other painful lessons over the years. I read every one of your articles I could find on Enron, including Bill's discussion of the accounting behind the fall. What I found were rationalized, selfish and sometimes childish arguments such as:
-- "tattling" is bad for your "friends" (so don't do it?)
-- the accounting was technically legal
-- investor's greed unfairly pressured Enron's leaders
-- it's the government's fault; let's recover our losses from them
I'm really shaken by this, because I hold you all in very high regard for past ethical stances--having followed you for many years. A little on my background ... I'm a 1983 graduate of the Air Force Academy, and still a colonel in the U.S. Air Force Reserve. At that institution we had a relatively simple code of honor, which I attempt to live by daily: "We will not lie, cheat, or steal, nor tolerate among us anyone who does." To date I've believed that The Motley Fool founders also lived by a similar code. What seems very clear to me is that Enron's leaders lacked integrity and did not behave ethically, at least by standards higher than the U.S. legal system. They were blinded by greed during those years, as were many Enron investors, WCOM investors, dot-com investors and myself. I have to wonder if The Motley Fool is being driven here by greed (or perhaps unresolved pain from Enron losses). Is it possible that Enron's leaders, employees and investors all made choices for which they are responsible, rather than the U.S. government? I sincerely hope you'll reconsider your ethical position and the pending law suit. Sincerely & Respectfully, JM
Shouldn't the leaders of Enron be held accountable for lying about their earnings? I don't agree with your premise that shareholders "pressured" the company executives to do whatever they had to keep the stock price rising. What about honesty in all things. That's what every father should be teaching. Even if they were using legal accounting practices as you say-is right for them to do that. Why not be honesty about everything and work to get things turned around? Is this the best use of your guy's hard earned money? Won't us taxpayers just be flipping the bill for this? What am I missing? I'd really like to here your response. -- B
Did Enron executives break the law? Maybe, maybe not. Bill Mann's piece is clear and well done but leads to the question, "Why has it taken 3 years to come to this conclusion?" Did he forget about FASB Accounting Rule 346(a-7.2) when he testified to Congress? I do absolutely agree that the Sarbanes-Oxley regulations are absurdly overreaching. You assert that the competition conspired with the government against Enron. How exactly? What are the specifics? Finally, your attack on Ms. Watkins is below what I have come to expect from TMF. I don't know what Ms Watkins' motives were but your implication she acted only to become famous and to have a beautiful movie star play her in a movie is ridiculous and a bit offensive. The poll if it is meant to be a joke is not funny. I hope your class action suit will be a bit more creative then "Mr Brady said not to be a tattletale." I admit it is possible her actions were self serving but you have not convinced me. As a former Naval officer who [lived] through the infamous Tailhook scandal I will tell you that the fame may or may not come later, but being a whistle blower is a very lonely experience at first. Again, you may have a point but your argument so far is completely Ad Hominem. I have come to expect better than this from TMF. On the other hand, the Tailhook investigation turned into the Tailhook witch hunt and perhaps the same is true with Enron. So far your articles have not made the case. -- BO
April Fools! ... or at least I hope it is -- K
(Minutes later, we received this from the same person ...)
This is the third letter, and now I get it. I forgot it was April 1, so everything makes sense. You guys really had me. -- A.P.
(Followed moments later by ...)
Wait, today is April 1. Disregard my last letter. Thank God. -- JE
I started reading your Enron class action stuff, and I thought you completely left the reservation. I like many other investors I know lost money on Enron, and here you were supporting this awful company. Enron's purposeful accounting games cost investors millions. Then i realized what day it was -- April 1.
Happy April Fool's Day, gentlemen. Awesome joke. And keep up the great work. -- MR
It has come to my attention that you wish to stage a demonstration in order that you may rally behind this human being named Kenneth Lay. After reading your very persuasive argument for his defense, I decided to submit a photo of myself in the Lay mask as a way of throwing my support behind this endeavor. After all, guilty or no, he MUST merely be the willing dupe of a more sinister menace who chooses to operate in the shadows. (Trust me, I know of what I speak.) Only TOGETHER can we root out this evil and bring order to Wall Street once and for all.
Best of luck,
Lord Vader
1. A new hip for my granny
2. A place where I can take my mistress without having to worry about her parents coming home
3. An iPod
Yours in support, JS
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