Washington (May 21, 2004) -- Paula H. Rieker, a former managing director for investor relations and corporate secretary for Enron Corp., pled guilty to insider trading and agreed to cooperate with the government's ongoing investigation into the energy firm's collapse.
Rieker, 49, of Spring Branch, Texas, entered a guilty plea this week in a U.S. District Court in Houston. She faces up to 10 years in prison and a fine of up to $1 million. So far, 30 defendants have been charged in connection with the work of the Enron Task Force, and with Rieker's plea, 11 defendants have been convicted.
According to the Department of Justice, Rieker sold 18,380 shares of Enron stock on July 5, 2001, after she found out that Enron's Broadband Services business planned to announce a loss of $102 million for the second quarter -- far more than previous financial guidance provided by Enron to the public.
As part of her plea deal, Rieker agreed to settle civil charges brought against her by the Securities and Exchange Commission. The SEC said Rieker violated federal securities laws when she traded on material inside information about significant losses in EBS and by helping Enron executives and senior managers mislead the public about Enron business units.
Without admitting or denying the SEC's charges, she agreed to pay a civil fine of $499,333 and to return $130,000 in bonus payments she received after Enron filed for bankruptcy in December of 2001. She also agreed to be barred from acting as an officer or director of a public company. The commission said its investigation is continuing.
-- WebCPA staff
