Former Enron Exec Lou Pai “Coughs” $31.5 Million to Pay Settlement

According to federal regulators, Lou Pai cashed out close to $300 million in stock just before the 2001 collapse of Enron. The $31.5 million dwarfs any other individual payments ever made towards settlements for accusations of insider trading. In fact, it is the largest.

“Mr. Pai is pleased to conclude his negotiations with the SEC in a settlement that involves no admission of wrongdoing, “said Lou Pai’s lawyer, Roger Zuckerman in a statement.

The settlement includes a $1.5 million civil fine and $30 million in restitution plus interest. The SEC gave the former chairman and chief executive officer of Enron Energy Services credit for $6 million due him under his insurance policy as a company officer that he previously forfeited as a payment to Enron shareholders in a class-action lawsuit. The Securities and Exchange Commission will put the remaining $25.5 into a fund for injured shareholders.

Pai did not deny or admit to any wrongdoing in settling the civil suit filed by the SEC in federal court in Houston. However, he said that he would refrain from any future violations of the securities laws.

Lou Lung Pai was CEO of Enron Energy Services and Enron Xcelerator, a venture capital division of Enron. He left Enron with over $280 million. Pai became the second largest land owner in Colorado when he purchased the 77,500-acre Taylor Ranch, though he later sold the property in 2005. He has not been charged with any criminal wrongdoing in the Enron scandal and has exercised his 5th Amendment right in regard to the subsequent Enron class action lawsuit.

Source The Associated Press