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Lou Pai
Former CEO; Enron Energy Services
Enron executive who sold $270 million in stock before collapse; escaped prosecution while spending lavishly on strip clubs; became second-largest landowner in Colorado
Overview
Lou L. Pai was the CEO of Enron Energy Services (EES); a division of Enron Corporation; and one of the most enigmatic figures in the Enron scandal. Pai sold approximately $270 million worth of Enron stock before the company's collapse; making him one of the most profitable insiders. Remarkably; Pai was never criminally charged; making him the highest-ranking Enron executive to escape prosecution entirely. His departure from Enron in mid-2001 was reportedly precipitated by his divorce and an affair with a former stripper named Melanie Fewell (later his second wife); which required him to liquidate his stock holdings as part of the divorce settlement. This coincidental timing allowed him to cash out before the company's stock price collapsed from approximately $90 to under $1. Pai used his Enron fortune to purchase the second-largest ranch in Colorado; a 77;000-acre spread in the Sangre de Cristo Mountains. EES; the division Pai ran; was later revealed to have used "mark-to-market" accounting to book estimated future profits from long-term energy contracts as current revenue; massively inflating the division's apparent profitability. Former colleagues described Pai as spending extravagantly at strip clubs; sometimes bringing dancers to the Enron office. Despite the SEC investigation; Pai was never charged; settling with the SEC in 2008 for $31.5 million without admitting wrongdoing.
Key Affiliations
Controversies & Concerns
Sold approximately $270 million in Enron stock before collapse; one of the most profitable insider exits in corporate history
Highest-ranking Enron executive to completely escape criminal prosecution; settled with SEC for $31.5 million without admitting wrongdoing
EES division used mark-to-market accounting to book estimated future profits as current revenue; massively overstating profitability
Departure timing coincided with divorce requiring stock liquidation; allowing him to cash out before price collapse from $90 to under $1
Described by colleagues as spending extravagantly at strip clubs; sometimes bringing dancers to the Enron office
Used Enron fortune to purchase 77;000-acre ranch in Colorado; becoming the state's second-largest private landowner
Related Investigations (1)
Known Associates & Connections
Kenneth Lay
Enron chairman under whom Pai profited enormously before collapse
Jeffrey Skilling
Enron CEO who designed the mark-to-market accounting Pai's division exploited
Sources & Documentation
2 documented sources from official records, investigations, and reports
Personal Information
- Birthplace
- Nanjing, China
Education
- •University of Maryland; B.S.
- •University of Maryland; M.A. Economics
Key Timeline
1997
Becomes CEO of Enron Energy Services
2000-2001
Sells approximately $270 million in Enron stock; among the largest insider liquidations
Mid-2001
Leaves Enron; reportedly due to divorce requiring stock liquidation; affair with former stripper
December 2001
Enron files for bankruptcy; stock price collapses from approximately $90 to under $1
2008
Settles with SEC for $31.5 million without admitting wrongdoing; never criminally charged