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WALL STREET:
INSIDE/OUT
THE ENRON STORY
As a
leading energy analyst for 30 years (ranked First Team by
Institutional Investor for nine consecutive years), the Enron
story has played a strange role in my career. During my tenure
on Wall Street, beginning at Standard & Poor's and later at
several other top investment banks, I lived under the constant
fear that one bad call would end my career. I had earned a
reputation for making bold calls and, to my surprise, I was
always correct. While such a record of success might seem
impressive there was the underlying chance that I might push the
envelope too far. I knew that with every report I ran a risk of
getting it wrong. So it was ironic that the "best" prediction of
my 30 years on Wall Street would lead to my downfall. By all
accounts, my Enron call should have been the high-water mark of
my career. Instead, it marked the end of my institutional
employment. In August 2001, with the stock trading in the mid
$40 range, I advised both stock and bondholders to "use Enron as
a source of funds" (for the uninitiated this is Wall Street’s
signal to sell all securities in the company). Enron’s house of
cards began to fall when Jeffrey Skilling, the company's chief
executive officer, resigned in mid-August “for personal
reasons." That a CEO of the seventh largest corporation in
America should suddenly quit “for personal reasons” should have
immediately set off alarm bells with investors. My reports and
frequently bold investor guidance eventually led to a parting of
ways with my then employer. It was this experience that led me
to found my own firm, Whitehall Financial Advisers LLC., where
investors and others could be assured of my continued
independent advice and counsel.
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