Remember the stories told about how Enron executives like Ken Lay were encouraging their employees to buy stock in the company, even as those executives were supposedly unloading their own stock? It sounded like a clear case of plutocrats hypocritically fleecing the little guy, with insider trading thrown in. A story that launched a thousand Paul Krugman columns.
Well, the New York Times now explains that with respect to Ken Lay, the story is a little more complicated:

It has become an indelible moment of the recent corporate scandals: Kenneth L. Lay, then chairman and chief executive of Enron, encouraging employees in the summer of 2001 to buy company stock, even as he was secretly unloading much of his own stake.
Mr. Lay's representatives have always denied that he had any ill intent, arguing that the sales resulted from margin calls on his collapsing portfolio. But his critics remain unmoved.
Enron employees accused him of betrayal. Members of Congress demanded his indictment on insider trading charges. The event even figured in a recent television movie about Enron as evidence of corruption at the company's very top.
But this story of a hypocrite unmasked suffers from one significant flaw: it appears to be untrue.
A review of previously undisclosed personal records — including years of trading, accounting and other documents — as well as interviews with Mr. Lay's financial advisers and other witnesses in the government's investigation indicates that Mr. Lay retained his faith in the company virtually until its collapse.
Ultimately, people involved in the investigation say, the records — many of which were provided by people sympathetic to Mr. Lay — have transformed what appeared to be an open-and-shut case of criminal insider trading into a more complex mosaic of hubris and financial recklessness. Indeed, outside experts who were told of the data said, the case seems far less likely to support charges of the type once imagined.
"This would be a case that the government would normally shy away from," said John C. Coffee Jr., a securities law expert at Columbia University.

The Times even fesses up to its own role in promulgating the now-discredited version of the story:

All told, experts said, the records indicate that Mr. Lay believed what he said when he told employees the stock was a good buy in August 2001.
"That trading pattern is consistent with Ken Lay sincerely believing that Enron stock had reached a trough and had nowhere to go but up," said Kevin J. Murphy, who specializes in executive compensation at the Marshall School of Business of the University of Southern California.
That differs sharply from the story put forward early last year, after many news organizations, including The New York Times, reported that Mr. Lay had sold large numbers of shares as he urged others to buy. Many people seized on those facts as evidence of duplicity, not accounting for other possible explanations.
(Emphasis added.)

Good for the Times. The angle of "plutocrat-fleecing-the-little-guy-while-protecting-his-own-millions" is a popular one, and certainly exists in reality. But I think that the picture painted of Ken Lay - a true believer in his own company, to the extent of ignoring all guidelines of diversification and bad news - is probably at least as common among founders of successful companies, especially those that pride themselves on being "pioneers" or "visionaries." When you consider the amount of self-confidence and committment required to develop a successful business, people who have those qualities seem as likely to develop fanatical, delusionary confidence as the cold-blooded rationality necessary to fleece their employees and stockholders in the hypocritical fashion described above. (There's a reason they call it "drinking the Kool-Aid" - it's not just an Apple phenomenon.)
UPDATE: A warm welcome to all Andrew Sullivan and Kausfiles visitors. Come back often.
This old Michael Lewis article has a good description of the founder personality I discuss above:

The job of the entrepreneur isn't to act prudently, to err on the side of caution. It's to err on the side of reckless ambition. It is to take the risk that the market allows him to take. What distinguishes a robust market economy like ours from a less robust one like, say, France's, is that it encourages energetic, ambitious people to take a flier -- and that they respond to that encouragement. It encourages nerve, and that is a beautiful thing. As the business writer George Anders puts it, ''The personality that allows you to be Jeff Bezos in the first place does not have a shutoff valve.'' If it did, Amazon.com wouldn't exist.

The Lewis piece is a great contrarian defense of the Internet boom and its excesses.
ANOTHER UPDATE: Donald Luskin isn't as forgiving of the Times as I am. Neither is Robert Musil.