FORMER ENRON EXECUTIVE PAULA RIEKER PLEADS GUILTY TO INSIDER TRADING, AGREES TO COOPERATE WITH ONGOING PROBE

WASHINGTON, D.C. - Assistant Attorney General Christopher A. Wray of the Criminal Division, Enron Task Force Director Andrew Weissmann, and Executive Assistant Director Grant Ashley of the Federal Bureau of Investigation announced today that Paula Rieker, former Enron Vice President, Managing Director of Investor Relations and Corporate Secretary, has pleaded guilty to insider trading.

Rieker, 49, of Spring Branch, Texas, entered the guilty plea today before Judge Melinda Harmon at U.S. District Court in Houston, Texas. Rieker pleaded guilty to a one-count information charging her with insider trading, in violation of 15 U.S.C. 78ff and 78j(b). Rieker faces a maximum sentence of up to 10 years in prison and a fine of up to $1 million at her sentencing, which will be scheduled at a later date. As part of her plea agreement, Rieker has agreed to cooperate fully with the government’s ongoing criminal investigation of the collapse of the Enron Corporation.

As described in the information and plea agreement, Rieker sold 18,380 shares of Enron stock on July 5, 2001, shortly after learning that Enron intended to announce that its Broadband Services (“EBS”) business lost $102 million in the second quarter of 2001, but before this information had been provided to Enron’s shareholders or the financial markets. The amount of this loss substantially exceeded the previous financial guidance provided by Enron to the investing public regarding EBS.

As part of her plea agreement, Rieker agreed to immediately pay a civil fine of $499,333 to the Securities and Exchange Commission and to settle civil charges against her. Rieker also agreed to return immediately to Enron $130,000 in bonus payments she received after Enron filed for bankruptcy.

Enron, at one time the seventh-ranked company in the United States with stock trading as high as $80 per share in August 1999, filed for bankruptcy protection on Dec. 2, 2001 and its stock became virtually worthless.

The investigation into Enron’s collapse is being conducted by the Enron Task Force, a team of federal prosecutors supervised by the Justice Department’s Criminal Division and agents from the FBI and the IRS Criminal Investigations Division. The Task Force also has coordinated with and received considerable assistance from the Securities and Exchange Commission. The Enron Task Force is part of President Bush’s Corporate Fraud Task Force, created in July 2002 to investigate allegations of fraud and corruption at U.S. corporations.

Thirty defendants have been charged in connection with the work of the Enron Task Force, and with the plea today, 11 defendants have so far been convicted. The total forfeiture for victims obtained to date is over $161 million. The Task Force investigation is continuing.

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