The Dynegy Chief Executive Officer Charles L. Watson resigned after investigations of the energy company's trading and accounting contributed to a sixty two percent drop in its stock this year.
Watson, who has run Dynegy for seventeen years and last year made an aborted bid for Enron Corp., departs after the company disclosed bogus electricity trades with CMS Energy Corp., whose CEO resigned last Friday. The top two traders at Reliant Resources, which did similar “round-trip” trades with CMS, have also quit the company.
Regulatory probes of sham trades have led investors to doubt the growth of energy trading at Dynegy and other companies. Dynegy's revenue surged to $42 billion last year from $602 million a decade earlier as the company mirrored the strategy of Enron, before it filed for bankruptcy last year.
“Dynegy has been viewed as Enron's little brother, primarily as a trader,” said Larry Alberts, who helps manage $2.3 billion in the AXP Utilities Income Fund, including shares of Dynegy. “They want to get away from that.”