Carnahan seeks more disclosure in sales of stock

WASHINGTON -- As Congress launched a series of high-profile hearings into failed Enron Corp., Missouri Sen. Jean Carnahan said company executives should be blocked "from quietly divesting themselves from their own company, as happened with Enron."

Mrs. Carnahan, a member of two committees investigating the energy giant, introduced legislation Thursday that would require a corporation's officers to reveal sales of their company stock immediately via the World Wide Web.

"Enron executives told the world the company was on solid footing, while at the same time they sold off their own stock," Mrs. Carnahan said in a statement Wednesday. "Such a dramatic insider sell-off would have been a big warning sign to investors, but this information was not readily accessible to them."

She discussed the measure Thursday at a Senate Governmental Affairs Committee hearing on Enron's collapse. Eleven House and Senate committees, the Justice Department, the Securities and Exchange Commission and the Labor Department are investigating Enron.

In a lawsuit, former Enron chairman Kenneth L. Lay and other officials are accused of selling millions of shares of stock while hiding their company's financial condition.

Officials said last week the Missouri pension systems for teachers and state workers lost nearly $32 million; together the retirement funds are worth about $26.4 billion.

"My legislation will prevent executives from quietly divesting themselves from their own company, as happened with Enron," Mrs. Carnahan said. "This single reform could dramatically level the playing field between insiders and ordinary investors. Never again would company executives be able to dump large amounts of company stock without facing immediate scrutiny of the financial health of the company."

Currently, executives of publicly traded corporations have 10 days to report a stock sale to the Securities and Exchange Commission using paper forms that go on file in Washington.