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> but this is definitely why I think the 401k/private saving model is the best. Not sure if it made outside just the Houston news cycle at the time but as an e
by technofiend 7y ago
> but this is definitely why I think the 401k/private saving model is the best.
Not sure if it made outside just the Houston news cycle at the time but as an employee of a competitor I heard from friends at Enron that their employer froze all sales of their stock in employee 401ks before going under. Lou Pai managed to cash out as part of a divorce settlement as documented here https://www.chron.com/business/enron/article/Ex-Enron-exec-Pai-target-in-many-lawsuits-2066163.php https://www.chron.com/business/enron/article/Ex-Enron-exec-P... but most employees were not able to divest themselves and protect their retirement.
- javagram 7y agoDefinitely don’t put your own company’s stock in your 401k. The 401k plans I’ve seen all had an option to invest the money in a diverse fund. Either a target date retirement fund that auto allocated to a mix of stocks and bonds, or to other funds such as an S&P 500 index. Freezing employee stock sales is fairly normal as I understand it. I get emails all the time from my publicly traded employer stating I cannot trade in their stock during certain times (due to the risk of insider trading).
- technofiend 7y agoFreezing stock to prevent insider trading is one thing... Freezing it to prevent a stock price crash and buy the company a few more days at the expense of employees is another.
- javagram 7y agoIn the case of a company going bankrupt I could certainly seeing the lawyers ordering a trading freeze to prevent insider trading. That said, I looked it up and it seems like the claim at the time was there was an “administrative change” to the plan during that period, so not what I speculated it might be.