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U.S. Securities and Exchange Commission

Securities and Exchange Commission

Litigation Release No. 18124 / May 7, 2003

SEC Sues Richard M. Ryan for Fraudulent Tender Offer for Enron Corporation

Securities and Exchange Commission v. Richard M. Ryan, No. 03 C 3018 (N.D. Ill., filed May 6, 2003)

The Commission today announced that it filed a civil action in the U.S. District Court for the Northern District of Illinois against Richard M. Ryan (Ryan) of New Lisbon, Wisconsin alleging that Ryan violated the antifraud and tender offer provisions of the federal securities laws when he made false and misleading statements to the press regarding Standard's alleged plan to commence a tender offer to purchase Enron Corporation (Enron). Ryan, who settled the action, is the President and CEO of Standard Power and Light (Standard), an Oakbrook, Illinois corporation.

The Commission's Complaint alleges that, on November 30, 2001, Ryan filed a notice with the SEC and issued a press release publicly announcing plans by Standard, a company with no revenues or substantial assets, to commence a tender offer to purchase the majority of shares of Enron, an acquisition which Ryan expected to cost approximately $750 million to $1 billion. The Complaint also alleges that Ryan attempted to convince investors that his plan to purchase Enron was legitimate by asserting, both in a November 30 press release, and in subsequent statements to the press during the first week in December 2001, that he had firm financing commitments, including $300 million, in place to complete the tender offer, and was imminently forming a management team to further the acquisition. In fact, neither Ryan nor Standard had the financial means or commitments to commence or complete the tender offer, and had failed to arrange for anyone to be on a management team. Ryan thus made materially false public statements regarding the tender offer for Enron, and made these statements without the intent to commence the tender offer within a reasonable time, or to complete the offer, and without the reasonable belief that Standard had the means to purchase Enron securities to complete the offer. As a result, he violated the antifraud and tender offer provisions of the federal securities laws.

Without admitting or denying the allegations in the Commission's Complaint, Ryan consented to the entry of a judgment that permanently enjoins him from future violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 10b-5 and 14e-8. The Commission did not impose a civil penalty against Ryan based upon Ryan's sworn financial information.



Modified: 05/07/2003