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In this series, we take a look at the 25 stocks on the S&P 500 Index (SPX) that have turned in the worst performance during the past decade -- what went wrong, and what happens next.

Permit me, if you will, to draw up an analogy: Qwest Communications (NYSE: Q) is to Wall Street as Lindsay Lohan is to Hollywood. At first, the little redheaded upstart seems to come out of nowhere, and dazzles everyone with her amazing performance. Then, just as quickly as the newcomer rose to fame, she sinks into a massive meltdown, the scope and severity of which is shocking even to seasoned vets. Okay, so this little comparison probably won't find its way onto the SATs, but -- minus the "redheaded" part -- the similarities are kind of eerie.

What went wrong? At lucky number 13 on our list of SPX underperformers, Q shed 77% of its value during the decade that ended on June 30, 2008. The shares peaked at $66 in March 2000, and bottomed out at $1.02 in August 2002 - a 98.5% plunge, top to bottom.

When Colorado-based Qwest burst onto the Big Board in June 1997, it was a company with a vendetta. CEO Joseph Nacchio defected from his executive position at AT&T (NYSE: T) after it became clear that Ma Bell didn't see him as president material. Qwest was in the process of building a massive fiber-optic network, and the upstart was determined to grab market share away from the industry's old giants -- including AT&T, naturally.

This post is part of a series where retirement expert Dan Solin offers simple answers to the ten toughest retirement questions. See all 10.

Q: Should I invest my 401(k) funds in company stock?

A: No.

A recent study revealed a very troublesome trend.

Most of the cash in the the retirement plans of some of the nation's biggest blue chip firms was sunk into company stock.

Since the Enron fiasco, employees are painfully aware of the dangers of investing their 401(k) funds in company stock. But it shouldn't take a meltdown like Enron to dissuade employees from making this mistake.

Don't be fooled into believing that, because you work at a company, you have some special insight into how that company's stock will perform.

Your paycheck depends on the economic health of your employer. Don't make the same bet with your retirement money.

You want a portfolio that has the right asset allocation for you and is globally diversified. If you invest in company stock, you are violating basic rules of investing by concentrating assets in one stock. This gives you much more risk, without a commensurate increase in expected returns.

Dan Solin is the author of The Smartest Investment Book You'll Ever Read (Perigee Books 2006) and The Smartest 401(k) Book You'll Ever Read (Perigee Books, June 24, 2008)

Remember when former Enron boss Ken Lay's wife Linda went on TV and cried that "It's all gone. We've lost everything!" in perhaps the least sympathetic televised display of misery since the Wicked Witch of the West cried that she was melting in The Wizard of Oz?

Well, it turns out she hasn't quite lost everything. In fact, she managed to come up with the cash to pay "all amounts currently due" to the Huntingdon Council of Co-Owners, the condo association for her luxury residence in Houston. The association had sued claiming she owed $109,000. In condo fees! That's enough to cover about 60 years of condo fees for my unit.

According to the Associated Press, "Linda Lay's assessment was based on ownership of nearly 3% of the 34-story building, the Houston Chronicle reported. She owns a 12,827-square-foot condo on the 33rd floor worth more than $4 million, plus 10 parking spaces and four storage units, the lawsuit said."

I'm on the floor crying with sympathy for this poor woman. Living all alone in that 12,827 square foot condo! Perhaps BloggingStocks readers could all pitch in and buy her a violin. She'd be a natural.

This post is part of a series on some of the most memorable companies that have disappeared.

Whenever I hear a company chief executive talk about "creative destruction" or "breaking the rules" or some other business buzzwords, a chill runs down my spine. You see, I have heard this sort of talk many times before -- from a company in Houston called Enron.

I was one of the many journalists who drank the Enron Kool-Aid. It was easy to understand why. Enron was the underdog, doing battle against the stuffy electric power industry to free up markets for competition, which in turn would save consumers tons of money. Everybody would win -- at least in theory -- and Enron would make tons of money in the process. The narrative the company spun was compelling, and I bought it hook, line, and sinker.

I dutifully scribbled down electricity and natural gas prices from Enron traders when I covered energy markets. Enron traders were always a chatty bunch. Enron's trading floor seemed to beehive of activity when I visited it during tours escorted by the company's public relations staff. It sure looked high-tech and had almost as many Bloomberg terminals as there were in the Bloomberg offices where I worked as a reporter.

Only years later did I realize that the whole thing was a sham.

This post is part of a series on some of the most memorable companies that have disappeared.

Arthur Andersen (1913 to 2002) spent decades as a leading accounting and consulting firm. Founded in 1913, it was once a member of the "Big 8" accounting firms, which later became the "Big 5." Andersen was the accountant for MCI and Worldcom. Even though it's been dead for six years, it left one offspring -- it spun off its Andersen Consulting unit in 1989. The renamed Accenture (NYSE: ACN) went public at $14.50 in July 2001 -- the share price is up 176% since then.

Andersen's downfall was its role as Enron's auditor. It used its credibility to bless Enron's special purpose entities and a whole host of illegal accounting. In 2002, the firm voluntarily surrendered its licenses to practice as CPAs after being found guilty of criminal charges, resulting in the loss of 85,000 jobs.

The lesson is to resist the lure of big money to pull you away from your values. Enron's pile of cash was irresistible to Andersen's leaders. And their lack of moral fiber cost a storied and proud firm its existence.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Accenture.

Let us know in the comments what you remember about Arthur Andersen. And be sure to check out other Companies That Have Vanished.

Because a long, holiday weekend can be a great time to pause and reflect -- to take a step back and look at the bigger picture -- here are some highlights from BloggingStocks a year ago today: May 25, 2007.

• Consumers and investors alike were eager for the launch date of Apple Inc.'s (NASDAQ: AAPL) ballyhooed iPhone.
• Coca-Cola Co. (NYSE: KO) announced its acquistion of Vitaminwater.
• Online retail shopping was on the upswing.
• Dell Inc. (NASDAQ: DELL) planned to begin offering its products at Wal-Mart Stores Inc. (NYSE: WMT).
• Declining new home sales in April signalled more weakness in the housing market.
• Home Depot's (NYSE: HD) new CEO began the 2007 annual meeting with an apology.
• Microsoft Corp. (NASDAQ: MSFT) denied rumors about its interest in acquiring Yahoo! Inc. (NASDAQ: YHOO).
• BloggingStocks speculated about the blue chips of 2017.
• Georges Yared reflected on the state of the market conditions and prospects for the future: Part 1 and Part 2.

And two years ago, May 25, 2006:

• Microsoft admitted that there would be delays in the relase of its Vista operating system.
• Ken Lay and Jeff Skilling were found guilty of defrauding Enron investors.

All the drama on Wall Street these days -- from the credit crunch to the housing slump, everything from runs on the bank to rogue traders -- had the Hollywood Reporter wondering recently why Hollywood isn't cashing in on the fun. Given how well most of the serious Iraq War/War on Terror movies have done lately, perhaps moviemakers will be searching for greener pastures. Heck, Gordon Gekko is scheduled to make a reappearance next year in a Wall Street sequel tentatively called Money Never Sleeps.

Until then, with a little help from the Internet Movie Database, here is a list of some of Hollywood's best takes on Wall Street so far.

• American Psycho (2000). Christian Bale stars as a soulless investment banker with a taste for violence and kinky sex. Based on the bestselling book by Bret Easton Ellis.
• The Bank (2001). This award-winning Australian film is set in a corrupt corporate bank, and like Pi features a maverick mathematician who may have found a way to accurately predict stock market fluctuations. Stars Anthony LaPaglia.
• Barbarians at the Gate (1993). This Emmy-winning made-for-television movie is based on the leveraged buyout of RJR Nabisco in the 1980s. James Garner won a Golden Globe for his portrayal of the company's CEO.
• Boiler Room (2000). A college dropout joins a small brokerage house and discovers that his new career isn't all it's cracked up to be. This film has been compared to both Wall Street and Glengarry Glen Ross. Stars Giovanni Ribisi and Ben Affleck.

Yesterday I wrote that former Enron CEO Jeff Skilling is appealing his various convictions related to conspiracy, securities fraud and insider trading.

Now the Houston Chronicle is dropping a bombshell: "Thanks to an appeals ruling in a separate Enron case, issued less than two months after Skilling was convicted in 2006, legal experts say Skilling has a strong chance to get most - and perhaps all - of his 19 convictions overturned."

The appeals ruling centered around the "honest services" law that the Enron Task Force used to pursue convictions involving various former employees. Essentially, they argued that engaging in fraud deprived their employer, Enron, of honset services. But that argument has been tossed out on the grounds that their behavior was consistent with Enron's goals of increasing reported profits and the share price -- the employees didn't steal, embezzle etc.

Logically, that might make sense for lower-level employees. But as the man at the top of the company, Jeff Skilling was responsible for the company's dishonest services. Mr. Skilling decided what the corporate goals were and, from the very beginning he sought to inflate the company's earnings: he joined Enron on the contingency that the firm would employ a perversion of mark to market accounting for booking profits from deals it entered into -- an accounting gimmick that was a major part of what allowed Enron to inflate its income statements. Testifying before Congress, he later claimed that he "wasn't an accountant" and couldn't be held responsible for the accounting treatment that he demanded!

If Skilling's convictions are overturned, the Enron Task Force will have to be declared a miserable failure: six years for financial mastermind Andy Fastow as part of a plea bargain to provide testimony against the top two men, neither of whom ended up serving significant time in prison, will be seen as a poor crowning achievement.

For a guy who was once at the apex of business running the seventh largest company in America, prison life must be pretty boring. Mopping duty and smuggling pruno can't hold a candle to flying around with politicians and plotting schemes for raping the California energy markets.

So what's a fellow in former Enron CEO Jeff Skilling's unenviable position to do with all that free time? Try to find a way to get out! This week, a court will consider the possibility of overturning Mr. Skilling's convictions on one count of conspiracy, one count of insider trading, five counts of lying to auditors, and twelve counts of securities on fraud. Mr. Skilling is serving a sentence of more than 24 years in Club Fed.

Mr. Skilling and his lawyers have some hope, based on newly-released documents, including 400 pages of handwritten transcripts of interviews with the government's star witness, former CFO Andy Fastow. The Wall Street Journal reports (subscription required) that "The Skilling legal team says the notes undermine trial testimony by Mr. Fastow, a star government witness against Mr. Skilling. It says the notes refute Mr. Fastow's contention that he and Mr. Skilling discussed illegal accounting maneuvers. The Justice Department disputes this characterization."

Skilling's lawyers argue that this evidence was "deliberately and systematically" withheld from the defense which, they say, is grounds for overturning the verdict. Prosecutors replied in their brief that "microscopic and misleading dissection of the Fastow notes provides no basis for overturning the jury's verdict."

An independent report commissioned by the Justice Department concluded that the "improper and imprudent practices" of now-bankrupt subprime lender New Century Financial were condoned and enabled by the company's independent auditor, KPMG.

The accounting firm allowed New Century to change its accounting to report strong profits during the housing boom, when a more conservative treatment would have shown losses. The company lowered its reserves for bad loans that investors were forcing it to buy back, even as the number of bad loans increased.

The New York Times reports that this may pave the way for New Century to sue KPMG. Seven years after the collapse of Enron, conflicts of interest involving "independent" auditors and their clients who pay them are still costing shareholders billions. Back in October, I posed 2 ideas for ways that issues of auditor independence might be fixed:

• Shouldn't companies be required to change accounting firms (rather than just employees within the same firm) every few years to avoid entrenchment and cozy relationships. When accountants see colleagues leaving for lucrative gigs at the company they once audited, can that lead to a conflict of interest?

• Should companies be allowed to choose their own auditors, or should the SEC consider implementing a system where auditors are appointed by a third-party? Allowing companies to hire and fire their own independent auditing firms raises questions about whether they are really independent.

With a recent -- and idiotic, I would say -- Supreme Court decision making it tougher for defrauded investors to sue investment banks and auditors who aided and abetted in fraud, auditor independence may be more important than ever.

My first reaction to the news today that Citigroup (NYSE:C) has settled claims by Enron creditors to the tune of $1.66 billion due to their responsibility in Enron's downfall, was that the two firms were meant for each other.

According to the Reuters report: " The largest U.S. bank is also giving up $4.25 billion of claims against Enron, while Enron is releasing all claims against Citi. The bank said in a statement that it denies wrongdoing, and agreed to the settlements solely to avoid the expense and uncertainty of litigation."

Uh huh. No wrongdoing. Just like it bears no responsibility in the whole subprime mess? Why is it that shareholders are the ones always left holding the bag? Investors in Citi have lost over 60% of their money over the last year. That hasn't stopped the board from paying huge bonuses to senior executives, and sending off former CEO Chuck Prince with a huge parting gift.

Enron didn't take any responsibility, Citigroup won't take any responsibility. Who are the ones who end up taking responsibility? Once again it's the little guy who is left holding the bag.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 3/26/08

In case you've missed it, CNBC's American Greed series is one of the best new television shows to come out in awhile. Each 1-hour episode looks at two scams, cons, and schemes, featuring interviews with victims, participants, and law enforcement. It's a great look at the psychology of white collar crime and, even better, it's entertaining.

The show has mostly focused on small, relatively unknown ponzi schemes, art heists, and con games but that's going to change this week. On Wednesday at 9:00 PM ET, American Greed will feature a profile of the "WorldCom scam," which, with $107 billion in assets, was the largest bankruptcy in U.S. history, nearly twice as big as Enron.

I'm looking forward to the WorldCom profile, partly because there's been a discrepancy in the amount of media coverage it's gotten compared with the smaller Enron. Partly this is because Skilling and Co. beat Worldcom to the punch by about seven months. But the story of WorldCom also seems to lack the Greek tragedy elements of Enron.

Hopefully the CNBC special will provide look at WorldCom that is compelling on a human level, something none of the coverage of it so far has really done.

Moody's Corp. (NYSE: MCO) Chief Executive Raymond McDaniel Jr. made a stunning admission at the World Economic Forum in Davos about the subprime mortgage crisis: "In hindsight, it is pretty clear that there was a failure in some key assumptions that were supporting our analytics and our models."

In other words, people lied to us because the 'information quality" the ratings agency got was lacking in "completeness and veracity," as Floyd Norris notes in the New York Times.

Come to think of it, this has a familiar ring to it. Back in 2002, Moody's and S&P whined to Congress about how they missed the implosion of Enron. Those meanies at Adelphia also bamboozled Moody's.

Question: Aren't Moody's and S&P paid a lot of money to check the "completeness and veracity" of the information people tell it so it can rate stuff?

Disgruntled former Enron shareholders looking to recoup some of their losses have been dealt a major blow by the Supreme Court, which declined to review their lawsuit against the investment banks that helped Enron CFO Andrew Fastow enter into sham transactions designed to hide debt and inflate the company's profits.

The Supreme Court's decision not to hear the case is, frankly, insane. Major investment banks entered into deals with Enron that clearly served no economic purpose other than to inflate the company's financial statements.

For instance, some of the transactions involved things like selling a barge to a consortium of investors and then buying it back for more money during the next quarter. What could these sophisticated investment bankers possibly have thought was going on?

In effect, the investment banks served as maitre d's renting out hotel rooms in 15-minute slots to leggy blondes who signed with names like "Crystal Divinity" and men who signed "John Doe." And now they're trying to claim that they didn't know there was any kind of scheme.

These investment banks willingly helped Enron conspire to defraud investors, and now they're being shielded from civil liability for the scheme that they were an integral part of. That's wrong.

The New York Times DealBook recently asked the question "Should banks take back their bonuses?"

The top investment banks will be paying out a record $39 billion in bonuses for 2007, a year in which most posted massive writedowns on bad subprime loans and saw their share prices shrink precipitously.

Making matters worse, traders and investment bankers earned huge bonuses on deals in past year that have now been written down. The deals weren't valued properly in the first place, but who cares! They already got their bonuses.

At the risk of being inflammatory, I have to tell you: This reminds me of Enron, where executives "marked to market" deals based on hypothetical future profits, paid themselves huge bonuses and, in one case, had cashed out and become the largest landowner in Colorado by the time stuff hit the fan.

The problem with the Wall Street bonus system is that it rewards risk over prudence. The compensation philosophy on Wall Street seems to be "Heads I win, tails I still win, as long as I can convince people it was actually a heads at the time I toss the coin. When they find out it was really a tails in a few years, I'll already have spent my bonus on that mansion in the Hamptons, and the shareholders can jolly well deal with it." Or something.

Until someone has the courage to make some changes in the Wall Street bonus structure, we can expect big blow-ups like this from time to time. As economics teaches us, people respond to incentives, and Wall Streeters are incentivized to take big risks with other people's money.