[Call me Nellie Forbush. At some point Americans are going to look into the echoing void of their retirement accounts and be mighty upset -- not just because of palpable frauds like the Enron team, but also because of strictly legit swindlers like the Global Crossing folks. From today's NY Times:]
How Executives Prospered as Global Crossing Collapsed
By Geraldine Fabrikant with Simon Romero
Even as the government looks for evidence of accounting fraud at the troubled communications company Global Crossing, some analysts are shaking their heads over the apparently legal ways the company's executives were able to walk away with personal fortunes.
No one did better than Gary Winnick, a former executive at Drexel Burnham Lambert who founded Global Crossing in 1997, took it public the next year and sold shares worth $734 million before the company collapsed.
Global Crossing's creditors may be lucky to get pennies on the dollar. Many employees lost significant parts of their 401(k) funds. And anyone still holding shares has a stock that closed at 7 cents on Friday. The shareholders include Mr. Winnick, who has 75 percent of his original holdings, a stake now worth just $5 million.
But he, like other executives, made millions from the company and its stock before the telecommunications recession took down Global Crossing and many other start-ups. Mr. Winnick declined a request for an interview.
The Global Crossing saga resembles another corporate collapse — Enron — in that executives did well while many employees and small investors did not.
Despite investigations by the Securities and Exchange Commission and the F.B.I., so far Global Crossing executives have not been accused of wrongdoing. Even so, in the view of one analyst, the outcome raises serious questions about corporate management.
"What they did is not a crime, but it so thoroughly favors corporate insiders," said Nell Minow, the editor of the Corporate Library, a corporate watchdog Web site, who first raised questions about Global Crossing's management practices two years ago. "I have no objection when shareholders make money, too," she said, "but this turns investment in a public company into a shell game."
[http://www.nytimes.com/2002/02/11/technology/ebusiness/11GLOB.html]
Carl
_________________________________________________________________ Join the world’s largest e-mail service with MSN Hotmail. http://www.hotmail.com