The US government is bringing a legal action against now-bankrupt Enron and former executives and directors as it seeks to recover retirement money that Enron employees.
The Labour Department filed a civil lawsuit late yesterday, alleging the company and its officials, including President Bush's friend and contributor Mr Kenneth Lay, mismanaged retirement plans full of overpriced company stock.
The energy trading company spiraled toward bankruptcy in late 2001, and the stock collapsed. Employees were not told about the deteriorating finances and were blocked for a time from selling the declining Enron stock in their retirement accounts.
It was the government's first legal action against Mr Lay, who had been Enron's chairman, and former chief executive Mr Jeffrey Skilling.
More than 20,700 participants in Enron's 401(k) plan had nearly two-thirds of their assets invested in company stock. Private suits filed on behalf of the employees allege that they lost more than $1 billion.
Mr Lay disputes the government's allegations. His attorney, Michael Birrer, said the Labor Department was trying to create new law by requiring a company to apply a strict new standard for evaluating its own stock that is held in employee retirement plans.
The Department's suit, filed in federal court in Houston, seeks to have the defendants barred from any future positions of responsibility as trustees of pensions funds and, in some instances, seeks financial damages from them.