From the Puget Sound Business Journal:
Employees held about 31 million stock options at the end of 2007, according to WaMu’s annual report. Not all of the options were fully vested.
“It’s an unbelievable amount of money that got evaporated,” said the former WaMu executive, who declined to be named. “I think the only difference between this and Enron is the majority of WaMu employees will end up having jobs where everyone at Enron lost their job.”
The amount of company stock owned by WaMu employees through their 401(k) retirement plans, isn’t known. But “it’s significant,” the former executive said.
Historically, there were no limits to how much employees could invest of their 401(k) in company stock.
At the end of August, WaMu sent a notice to 401(k) plan holders informing them that contributions to the Washington Mutual Stock Fund would be capped at 20 percent. The notice was obtained by the Puget Sound Business Journal.
WaMu’s letter of explanation warned employees that it’s “important to mix investments among different asset classes” and “investing large amounts in a single holding or stock — like the Washington Mutual Stock Fund — can leave a portfolio under-diversified.”
The new cap would have gone into effect on Wednesday.