[ QUOTE ]
After the Enron Scanel, the stock for U-Haul company (parent company Amerco Inc) fell to $1.56 from the $20 something range because they were using the same accounting firm.
My dad was a regional VP for U-haul at the time and had to go to an emergency meeting in Phoenix.
They had the CEO and a rep from the accounting firm (I think it was Arthur Anderson)... They went over the company financials, the tangible assets of the company, and got an explanation from the accounting firm that U-Haul was NEVER In the wrong and had done everything correctly.
Things should be back on track within 6 months once the last two years corporate taxes were re-stated and the Enron debacle wasn't in the news every day.
My dad BEGGED my mome to take $75K out of their savings and invest in U-haul Stock. She said no... for good reason. She didn't want a spend a substantial part of their savings on about 50,000 shares.
Sure enough within 18 months Amerco was trading in the $80 range. It hovers in the $60 range now...
I'm guessing my dad would have cashed out incrementally and had an after tax profit around $2.5 Million.
[/ QUOTE ]
This isn't exactly true.
Amerco has always been a mess. It's filed for bankruptcy twice and restated 8 years of accounting because they were using off balance sheet partnerships (just like enron did) to make their results look better than they really were. The difference appears to be that Amerco didn't have the liquidity problems that Enron had.
And an accounting guy is always going to defend his companies work. It's the SEC and courts that force the accounting firm and company to restate results.
Though it's not insider trading for a Sr. VP to buy more company stock if he thinks it's prospects are good. It's only insider trading if he bought based on material non public information. From the description I don't see anything wrong. Privately stating that your publicly released financials are accurate isn't new information.
But I'm not sure I would have believed that particular CEO or that particular accountant
