Former Enron Executive Pays SEC $31.5 Million

July 30,2008— -- A former top executive of collapsed EnronCorp. is paying $31.5 million to settle charges that he used insideinformation to illegally profit from sales of thousands of sharesof company stock in 2001, federal regulators said Tuesday.

The Securities and Exchange Commission said the deal with Lou L.Pai -- who was chairman and chief executive of the fallen company'sretail energy division Enron Energy Services -- is one of thelargest ever with an individual for alleged illegal insidertrading.

The settlement includes a $1.5 million civil fine and $30million in restitution plus interest. The SEC gave Pai credit for$6 million due him under his insurance policy as a company officerthat he previously forfeited as a payment to Enron shareholders ina class-action lawsuit. He agreed to pay the remaining $25.5million into a fund administered by the SEC for injured Enronshareholders.

Pai neither admitted nor denied wrongdoing in settling the civilsuit filed by the SEC in federal court in Houston. He did agree,however, to refrain from future violations of the securities laws.

"More than seven years after the sale of his stock, Mr. Pai ispleased to conclude his negotiations with the SEC in a settlementthat involves no admission of wrongdoing," his attorney RogerZuckerman said in a statement.

Pai sold nearly $300 million in Enron stock before he quit theHouston-based company in mid-2001. The massive accounting fraud atEnron, once the nation's seventh-largest company, and its collapseinto bankruptcy in December 2001 made it emblematic of corporatecorruption.

In its suit, the SEC said that between May 18 and June 7, 2001,Pai sold 338,897 shares of Enron stock and exercised Enron stockoptions that put another 572,818 shares on the open market. Paimade the sales after receiving confidential information from EnronEnergy Services management regarding financial and operatingproblems at the division, according to the SEC.

Pai avoided millions in losses from the stock sales when Enron'sstock price plummeted in the fall of 2001, the SEC alleged, sinceit averaged $53.78 a share at the time of his sales and closed at40 cents on Dec. 3, 2001 -- the day after Enron filed for bankruptcyprotection.