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Ellen Podgor on the trial penalty
Stetson College of Law Professor Ellen S. Podgor, who authors the popular White Collar Crime Prof Blog, has written an important law review article on a key issue that is confronting defense attorneys and courts in this age of...
The reeling prosecution in the Skilling case
On the heels of the U.S. Supreme Court's decision earlier this year to hear Conrad Black's appeal of his criminal conviction on honest services wire-fraud charges under 18 U.S.C. § 1346 ("Section 1346), the Court yesterday granted former Enron...
Reflecting on astonishing abuses of power
As Congress contemplates an historic extension of governmental control in regard to health care finance, a couple of stories relating to the growth of unrestrained exercise of governmental power in another area grabbed my attention. First, former Dynegy executive...
The thin line of business criminality
In this earlier post regarding former Enron Broadband CFO Kevin Howard's recent plea deal, I predicted that the factual basis for the plea deal would barely describe wrongdoing, much less criminality. Turns out I was right. Check out paragraph...
The Fifth Circuit rules in the Skilling appeal
In this current anti-business climate, not many folks were expecting that the Fifth Circuit Court of Appeals would set aside former Enron CEO Jeff Skilling's conviction. On the other hand, not many folks expected this decision, either. In the...
But what about that case in which the threat worked?
This Wall Street Journal editorial from earlier in the week rightly notes that the "Department of Justice finally got something right" by electing not to appeal the Second Circuit's decision earlier this year upholding U.S. District Judge Lewis Kaplan's dismissal...
Do as I say, not as I do
Andrew Weissmann is a rather odd advocate (see here and here) for limiting corporate criminal liability, don't you think? Let's take a look back on Weissmann's business prosecution scorecard. A unanimous U.S. Supreme Court overturned Weissmann's dubious prosecution of Arthur...
Cutting the Pai
Former Enron executive Lou Pai's recent settlement with the Securities and Exchange Commission confirmed that the Greed Narrative is still embraced by much of mainstream American society. Take, for example, Charles Kuffner's reaction: Reading this story reminds me why...
The latest Enron book
Harvard Business School issued this press release and interview yesterday of Malcolm S. Salter, the Harvard professor who has written the latest book -- Innovation Corrupted: The Origins and Legacy of Enron's Collapse (Harvard University Press) -- in what...
An odd spokesman for limiting corporate criminal liability
The always-alert Ellen Podgor notes that former Enron Task Force chief Andrew Weissmann (see also here and here) recently wrote an amicus brief on behalf of various business and defense-oriented organizations in the United States v. Ionia Management, S.A....
Look at what Mary Flood has been reading
Chronicle legal reporter Mary Flood covered many of the Enron-related criminal trials, so it was only natural for her to pick up a copy of former Enron Task Force prosecutor, law professor and current Oregon attorney general candidate John...
The Enron Task Force laid bare
In this previous post on former Enron CEO Jeff Skilling's Supplemental Brief regarding prosecutorial misconduct in connection with covering up exculpatory evidence contained former Enron CFO Andrew Fastow's interview notes, I noted that the Skilling brief would likely have...
The Spitzer Lesson
The mainstream media and the blogosphere have been buzzing over the past 24 hours regarding the fall from grace of New York's governor and former Lord of Regulation, Eliot Spitzer. As noted in this previous post, there is an...
The winds of prosecutorial power
When the Department of Justice decided to prosecute Arthur Andersen out of business despite a manifestly weak case, that confirmed that the creation of enormous wealth for thousands of employees and an impeccable reputation built over decades of fine work...
Criminalizing the legal advisors
Regular readers of this blog know that the federal government's criminalization of business since Enron has been steadily encroaching on professionals who provide advice to business interests. First, it was Arthur Andersen, then the Merrill Lynch bankers in the Nigerian...
Jamie Olis seeks another chance
A little over a month after I started this blog back in early 2004, former Dynegy executive Jamie Olis was sentenced to over 24 years in prison for allegedly cooking Dynegy's books. That shocking sentence aroused my interest in the...
The Skilling Appeal Brief
As Ashby Jones and Peter Henning noted on Friday, lawyers for Jeff Skilling filed his appellant's brief this past Friday along with a motion requesting that the Fifth Circuit Court of Appeals waive length-of-brief rules under the special circumstances of...
Judge Kaplan hammers the DOJ in the KPMG case
As widely anticipated, U.S. District Judge Lewis Kaplan dismissed all charges today against 13 former KPMG partners in the KPMG tax shelter case because of the prosecution's interference with the defendants' Constitutional rights under the Fifth and Sixth Amendments. A...
Threatening to go Arthur Andersen on KPMG
This earlier post noted how the shadow of the sad case of Jamie Olis continues to hang over the KPMG tax shelter case in New York, and this post explored how Olis' defense was financially undermined by the Justice Department's...
Giuliani's hypocrisy
Doug Berman notes that Rudy Giuliani thinks that Scooter Libby got a raw deal. That is unquestionably correct, but what Giuliani failed to mention is that he is one of the politicians primarily responsible for the culture of criminalization that...
Is Jamie Olis' freedom worth less than ours?
The title to this post poses an unsettling question on this day when we pay tribute to those who sacrificed their lives for our freedom. But recent revelations from the trial of the civil case relating to the criminal trial...
The DOJ's threat to go "Arthur Andersen" on Dynegy
This post from last week reported on how a recent civil lawsuit against Dynegy, Inc. involved issues relating to the Justice Department's 2003 threat to indict the company that contributed dramatically to the barbaric prosecution and prison sentence of former...
The Bill Fuhs of the Conrad Black trial
In this post from last week, I noted the similarities between the federal government's vacuous case against Conrad Black and the notorious prosecution of the four former Merrill Lynch executives in the Enron-related case known as the Nigerian Barge case....
An interesting consequence of
criminalizing the right to counsel
One of the most egregious aspects of the federal government's criminalization of business during the post-Enron era has been the prosecution tactic of threatening to go Arthur Andersen on companies if they fulfilled a corporate policy or obligation to pay...
The politics of destruction
In this International Herald Tribune article, Michael Oxley -- the "Oxley" of the Sarbanes-Oxley corporate governance statute -- confirms the vacuous nature of the politicians who passed that destructive law and encouraged the destruction of Arthur Andersen and various Enron...
Thinking about the criminalization of business
Given that the governmental onslaught against business interests over the past several years is still a relatively recent occurrence, my sense is that we're still too close to it to be able to place it in the proper perspective. However,...
The injustice of the Jeff Skilling case
In a few days, unless the Fifth Circuit grants his motion to remain free on bond pending appeal of his conviction, Jeff Skilling will report to prison to begin serving a 24-year prison sentence. The image of Skilling entering that...
Epstein on the deferred adjudication racket
Richard Epstein of the University of Chicago and the Hoover Institution authors this WSJ ($) op-ed that takes up a common topic on this blog over the past couple of years (see also here) -- the improper use of deferred...
The Accidental AG
GQ interviews former Attorney General John Ashcroft and it's an interesting read. For example, the following is Ashcroft's explanation on how he got into politics: The way my life unfolded would have required the kind of vision that could make...
Berkowitz cashes in
So, as Peter Lattman reports, most recent Enron Task Force director Sean Berkowitz is the latest in a long line of former Task Force prosecutors who parleyed prosecuting unpopular Enron executives into a more lucrative career than government work. Berkowitz...
The Skilling sentencing hearing
Former Enron CEO Jeff Skilling's sentencing hearing is Monday afternoon, so it's a good time to provide some links that will provide a basis for an objective evaluation of Skilling's case as a counterbalance to what the mainstream media typically...
Profiting from business prosecutions
So, now it's Debra Wong Yang, U.S. Attorney for California's central district, is resigning to take a job with Gibson, Dunn & Crutcher LLP where she will serve as co-chair of the firm's crisis management practice group. Sounds sort of...
Previewing the Skilling appeal
Former Enron CEO Jeff Skilling filed a motion for bail pending appeal earlier in the week (download a copy here; Carrie Johnson's WaPo article on the motion is here) and, in so doing, previews the major issues that he will...
The untenable corporate crime liability standard
John Hasnas is a professor of ethics and law at Georgetown University's McDonough School of Business and is the author of the book, Trapped: When Acting Ethically is Against the Law (Cato 2006), which is an adaptation of Professor Hasnas'...
The insidious nature of criminalizing business
Under mounting criticism over its dubious tactics in regard to threatening to go Arthur Andersen on KPMG in the prosecution of the firm's promotion of questionable tax shelters, the Justice Department is now making nice in Congress. Yesterday, deputy attorney...
The real issue in the Grasso case
Eliot Spitzer's long-running propaganda campaign and lawsuit against former New York Stock Exchange chairman and CEO Richard Grasso has been a frequent topic on this blog, so I couldn't help but notice this NY Post article (hat tip to Peter...
The sinking Milberg Weiss ship
Class action securities powerhouse Milberg Weiss Bershad & Schulman has been attempting to keep a stiff upper lip in the face of the Justice Department's decision to go Arthur Andersen on the firm earlier this year (previous posts here), but...
Quattrone walks, but what about Andersen?
As noted earlier here, former CSFB investment banker Frank Quattrone's ordeal (previous posts here) came to a close yesterday as the Court in the criminal case against him approved a a deferred-prosecution agreement under which the charges will be dropped...
Grundfest takes on the sad case of Jamie Olis
A heavyweight has entered the ring on behalf of Jamie Olis. The WSJ's Peter Lattman reports that Joseph A. Grundfest, W.A. Franke Professor of Law at Stanford University and one of the leading securities law experts in the US, is...
An Enronesque public scam
This NY Times article reveals a scam that New York AG ("attorney general" or "aspiring governor," take your pick) Eliot Spitzer won't touch with a ten-foot pole: Every year since 1999, New York City has reported that it has all...
Christine Hurt is working on an interesting paper
Christine Hurt, Conglomerate blogger, former Houstonian and currently the Richard W. and Marie L. Corman Scholar in the University of Illinois College of Law, is working on an interesting paper that she describes here: The prosecutorial response to white collar...
The WSJ said what about the Enron Task Force?
The Wall Street Journal has had a spotty record in covering the corporate scandals that emanated from the stock market bubble of the late 1990's, as noted earlier here, here and here in regard to its coverage of the Enron...
Finally, some justice in the Nigerian Barge case
As foreshadowed by this post from last month on the Fifth Circuit's decision to release from prison three of the four former Merrill Lynch executives pending disposition of their appeal in the Enron-related Nigerian Barge case (extensive discussion here), the...
Ken Lay and the Enron Myth
Former Enron chairman and CEO Ken Lay died yesterday of a heart attack and, given the stress that Mr. Lay had endured over the past five years, such a fate is certainly not surprising. However, my sense is that the...
A Quick Enron Reality Check?
As expected, the Conglomerate Enron online symposium last week generated over 15 interesting posts, including ones by the reliably insightful Larry Ribstein (see also here), Ellen Podgor, Don Langevoort, Lisa Fairfax, and Thomas Joo. However, one of the final posts...
The shrinking of Milberg Weiss
As noted earlier here, the indictment of Milberg Weiss Bershad & Schulman is likely to put the firm out of business regardless of the outcome, although the firm is officially keeping a stiff upper lip and making a go of...
Closing arguments in the first Enron Broadband re-trial
Inasmuch as I had a couple of hearings yesterday in federal court, I was able to slip in and watch most of the closing arguments of the Enron Task Force's case against former EBS CFO Kevin Howard (picture on the...
Shoe drops on Milberg Weiss
As anticipated by this post from earlier this week, a federal grand jury indicted Milberg Weiss Bershad & Schulman yesterday in Los Angeles for allegedly funneling kickbacks to plaintiffs in dozens of securities class-action cases over a 20-year period. The...
Milberg Weiss continues to reel
In a development that drips with irony, this NY Times article (see also here) reports that David Bershad and Steven Schulman -- two of the top partners in the class action plaintiffs firm, Milberg Weiss Bershad & Schulman LLP --...
Lay-Skilling, Week Fifteen
Week 15 of the corporate criminal case of the decade (previous weeks summary posts here) was the relative calm before the final battle of closing arguments next week. Although there was a skirmish over the Ostrich jury instruction, the lull...
Overreacting a bit to the Ostrich instruction
Alexei Barrionuevo, who has done an excellent job covering the Lay-Skilling trial for the NY Times, weighs in today with this article reporting on U.S. District Judge Sim Lake's decision to include in the jury charge an instruction relating to...
Anything for a conviction
As noted here yesterday, the Enron Task Force refused Ken Lay and Jeff Skilling's request to have the prosecution recommend to U.S. District Judge Sim Lake that half-a-dozen former high-level Enron executives who have declined to testify during the trial...
Criminalizing the right to counsel
This earlier post examined the Justice Department's policy under the controversial Thompson Memo to threaten to go Arthur Andersen on companies that fulfill an obligation to pay defense counsel for current or former employees who are under criminal investigation or...
The Great Waste
As noted earlier here, I was able to attend the Lay-Skilling trial for several hours on a couple of afternoons this past week. As I watched Jeff Skilling defend himself against criminal charges amidst the overwhelming societal bias that exists...
Criminalizing an executive's right to counsel
In the post-Enron era of criminalizing business, a business executive's attorney-client privilege with the company counsel of the executive has already become largely illusory (posts here, here here and here). Now, according to this Nathan Koppel/WSJ ($) article, the government...
Did Fastow forge Causey's initials on Global Galactic?
As noted on several occasions previously, the Lay-Skilling trial has settled into a rhythm during the Enron Task Force's case-in-chief in which long stretches of boring testimony regarding rather dry topics is interrupted intermittently with a tidbit that really appears...
Quattrone conviction overturned
In a result that was anticipated by this earlier post, the ever-observant Peter Lattman reports this afternoon that the Second Circuit Court of Appeals in this 61-page opinion has overturned the conviction of former Credit Suisse First Boston investment banker...
More on the risk of going for the cheap score
Remember Kevin Hannon? He is the former Enron Broadband executive whose testimony was the subject of this earlier post on the risk for the Enron Task Force of attempting to score points with the jury by eliciting seemingly helpful testimony...
Lay-Skilling, Week Seven
As the seventh week (earlier week summaries here) of the epic corporate criminal trial of former key Enron executives Ken Lay and Jeff Skilling drew to a close, U.S. District Judge Sim Lake gave the lawyers and the jurors an...
The insufferable Sherron Watkins
Yesterday was Sherron Watkins day at the criminal trial of former key Enron executives Ken Lay and Jeff Skilling, and despite her self-portrayal as a paragon of virtue amidst a cauldron of corruption at Enron, Watkins came off in person...
Department of Coercion
John Hasnas is a professor of ethics and law at Georgetown University's McDonough School of Business and is the author of the new book, Trapped: When Acting Ethically is Against the Law (Cato 2006), which is an adaptation of Hasnas'...
Be careful what you ask on re-direct
As predicted yesterday, the media frenzy over former Enron CFO Andy Fastow's testimony relegated the previous Enron Task Force witness -- former Enron Broadband chief operating officer Kevin Hannon -- to obscurity rather quickly. However, before leaving the stand, the...
The criminalization of business mindset
Peter Lattman -- whose WSJ Law Blog has quickly become essential daily reading on business law matters -- points us to this Corporate Crime Reporter article on former Enron Task Force director Andrew Weissmann, who is leaving the Justice Department...
Good news and bad news for Milberg Weiss
This NY Times article reports that Mel Weiss and Bill Lerach received good news and bad news earlier in the week regarding the longstanding criminal investigation against the two men and the Milberg Weiss Bershad & Schulman law firm over...
Omnicon's nuclear waste dump
In addition to maintaining the Wall Street Journal's essential Law Blog, Peter Lattman continues to contribute interesting news articles for the WSJ, including this one from yesterday that he co-authored with Jesse Eisinger about something that is close to the...
Lay-Skilling, Round One
Well, I wasn't able to put other pressing matters aside to attend opening arguments yesterday in the criminal trial of former key Enron executives Ken Lay and Jeff Skilling, but I did score a transcript yesterday evening and was able...
Are you ready to rumble?
To the surprise of no one who has ever tried a case before U.S. District Judge Sim Lake, a jury was empaneled yesterday (NY Times article here) in the Enron Task Force's legacy case against former key Enron executives Ken...
And in this corner . . .
Although not as well-known as John Emshwiller of the Wall Street Journal and Kurt Eichenwald of the NY Times when it comes to covering the Enron scandal, Carrie Johnson of the Washington Post has been doing some of the best...
Winding up an Enronesque experience
This Wall Street Journal ($) article on Friday (USA Today article here) reports that government authorities led by New York Attorney General Eliot Spitzer are finalizing a settlement with American International Group under which the company would settle civil business...
Getting ready to rumble
The Chronicle's Mary Flood reports on one of the final pre-trial hearings before the commencement of the January 30 criminal trial against former key Enron executives Ken Lay and Jeff Skilling, and while it looks as if U.S. District Judge...
Is the Task Force gripping in preparation for the Lay-Skilling trial?
An unusually high number of the prospective jury pool for the upcoming trial of former key Enron executives Ken Lay and Jeff Skilling already have concluded that the two men are guilty of various business crimes merely because of their...
Causey plea deal expected today
The Chronicle, the Wall Street Journal ($), the NY Times and the Washington Post began reporting last night that former Enron chief accountant Richard Causey will enter into a plea bargain with the Enron Task Force this afternoon in Houston...
Thinking about the WSJ's Enron conflict of interest
The Chronicle's Loren Steffy thinks I'm stretching a bit in noting the conflict of interest that the Wall Street Journal has apparently decided to overlook in allowing John Emshwiller to report on the upcoming trial of the Enron Task Force's...
Lunch with Ken Lay
Lunch was interesting in Houston yesterday as former Enron CEO and federal criminal defendant Ken Lay was the featured speaker at the Houston Forum's monthly luncheon. An earlier post on the lunch is here and the NY Times article on...
What's the big deal with the Lord of Regulation?
Matthew T. Bodie is a Hofstra law professor who is guest blogging over at the Conglomerate blog and, in this post, wonders why fellow law professors such as Stephen Bainbridge and Larry Ribstein are critical of New York attorney general...
Spitzer backs off criminal charges against Hank Greenberg
On my way out the door to College Station, I note that the Lord of Regulation simply cannot stay out of the news. After publicly flogging former American International Group, Inc. CEO Maurice "Hank" Greenberg for months (note earlier posts...
How does the Enron Task Force really feel about Arthur Andersen?
This earlier post noted the 180 that the Enron Task Force has recently taken in regard to defunct accounting firm Arthur Andersen. After demonizing the firm, gutting it with a misguided prosecution, and alleging that a number of the firm's...
NY Times on the sad case of Dan Bayly
Landon Thomas, Jr. of the New York Times has written this major Sunday Times article about the sad case of Daniel Bayly, the former head of Merrill Lynch's global investment banking division who is presently serving a two and a...
Take this auditing job and shove it
So, how would you like being an auditor? First, Arthur Andersen was prosecuted out of business by the Justice Department in an ill-advised prosecution. Next, KPMG almost melted down in the face of a criminal investigation into its promotion of...
Beating a dead Andersen
The Chronicle's Mary Flood, back from a well-deserved vacation, is again writing on Enron matters and, in this article, notes that the Fifth Circuit has asked the attorneys involved in the Arthur Andersen criminal case to advise the Court on...
Signs of desperation at the Enron Task Force?
Already having engaged in intimidation of witnesses and dubious plea-bargaining tactics, the Enron Task Force is showing signs of becoming desperate regarding its legacy case. As noted in this post from earlier in the week, the Enron Task Force has...
Piling on Arthur Andersen
It's looking as if the Texas State Board of Accountancy needs to catch up with the government's investigation into Enron. In this Chronicle article, John Roper and Purva Patel report that the Texas state accounting board is seeking disciplinary action...
Thinking about the Enron legacy case
It is currently the calm before the storm that will be the trial of the legacy case of the Enron Task Force -- that is, the criminal trial of former Enron executives Ken Lay, Jeff Skilling, and Richard Causey that...
Criminalizing everything
George Melloan, the deputy editor, international, of The Wall Street Journal, has recently written two columns (here and here) in which he has addressed a common topic on this blog -- i.e., the increasing criminalization in American society of ordinary...
Epstein on Bork's Originalism
In this previous post, former Solicitor General and unsuccessful Supreme Court nominee Robert H. Bork provided a handy shorthand description of the judicial philosophy of originalism. In a letter to Wall Street Journal's ($) editor yesterday, Richard A. Epstein --...
KPMG serves up more sacrificial lambs
As KPMG LLP attempts to survive as a going concern after cutting a deal with the federal government to avoid a criminal indictment in connection with its controversial tax shelter practice, the firm served up 10 additional criminal defendants for...
It's a small world in auditing
As accounting firm Grant Thornton, LLP reviews its liability insurance limits in connection with its audits of Refco, a couple of interesting facts are emerging. Turns out that Refco hired Grant Thornton in 2002 to replace Arthur Andersen as the...
The hypocrisy of Republican outrage over the DeLay prosecution
In reading the various Republican statements (see here and here) alleging that Travis County District Attorney Ronnie Earle is engaging in an outlandish abuse of power in regard to his decision to indict House Majority Leader Tom DeLay, a thought...
Will the NY Times blame Enron for the delay in the Hurricane Katrina relief effort?
My sense is that the New York Times editors need a little psychiatric help in letting their "Enron-thing" go. In this article, the Times reports on a working paper by a couple of East Coast economists who propose the rather...
Thank you, Andersen and Enron
Allan Sloan in his Washington Post column has an interesting take on the Justice Department's decision not to indict KPMG over the firm's involvement in the creation and promotion of allegedly illegal tax shelters: The government didn't dare file criminal...
Shoe drops on eight former KPMG partners
With its deferred prosecution agreement with the government finalized, the first criminal indictments were filed today against former KPMG partners in connection with the creation and promotion of tax shelters that still threatens the firm ability to survive as a...
KPMG - DOJ settlement done
The anticipated settlement of criminal charges over KPMG, LLP's creation and promotion of allegedly illegal tax shelters has been finalized between the accounting firm and the Department of Justice and will be announced on Monday. Here are the previous posts...
Piling on KPMG
As KPMG attempts to finalize a deferred prosectution agreement with federal prosecutors that would avoid an Arthur Andersen-type indictment and probable meltdown, now they have another front on the criminal battlefield to be worried about: Mississippi likely will file criminal...
But what about Jamie Olis?
Doug Berman points out that Thursday was a busy day in New Orleans as the Fifth Circuit Court of Appeals issued over 160 published and unpublished decisions that appear mostly to involve rejection of various Booker sentencing claims. It's safe...
KPMG noose tightens
On the heels of this post from yesterday, this NY Times article reports on the plea bargain of Domenick DeGiorgio, a 42 year old former managing director at the New York branch office of Munich-based HVB, (formally known as Bayerische...
KPMG strikes deal in tax shelter probe
You know that the criminalization of business in the post-Enron era has become routine when it's newsworthy that the government has decided not to use its prosecutorial power to prompt another Arthur Andersen-type meltdown of a major accounting firm. This...
More thoughts on the Merrill Lynch defendants' Nigerian Barge appeal
Having tended to my "day" job at the end of last week, I wanted to pass along some further thoughts on the lively discussion that erupted between Vic Fleischer, Larry Ribstein, other commentators, and me last week in regard to...
You knew this was coming for KPMG
This Washington Post article reports that at least 20 former partners KPMG LLP -- including some who were members of its senior management team -- have been informed by the Justice Department that they are targets of the criminal investigation...
The Merrill Lynch defendants appeal in the Nigerian Barge case - criminalization of business run amok
The Enron-related Nigerian Barge case has been a frequent topic on this blog as a prime example of the Justice Department's dubious criminalization of common business practices in the post-Enron era. As a result of that questionable policy, four former...
The Chron interviews outgoing Enron Task Force Director
The Chronicle's Mary Flood, who has done a fine job of covering the Enron case for the local newspaper, interviews Andrew Weissmann, the former Enron Task Force director who resigned as director of the Task Force this past week amidst...
Epstein on judicial activism
Richard A. Epstein is the James Parker Hall Distinguished Service Professor of Law at the University of Chicago, and the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution. In this Wall Street Journal ($) op-ed on the nomination...
A crushing defeat for the Enron Task Force
In yet another stunning blow in a series of setbacks to the Enron Task Force, the jury in the Enron Broadband trial returned late this afternoon and advised U.S. District Judge Vanessa Gilmore that they had acquitted three of the...
The illusory attorney-client privilege
In this timely post, White Collar Crime Prof Peter Henning notes a recent Fourth Circuit decision that bears on an increasingly knotty issue in this post-Enron era of criminalizing business -- that is, an employee's waiver of the attorney-client privilege...
Weissman steps down as Enron Task Force chief
In a development that is intriguing by its timing, Andrew Weissmann is resigning as director of the Justice Department's Enron Task Force, reportedly to enter private practice, although that report has not been confirmed. Another Task Force prosecutor -- Sean...
Another Enron plea bargain
On the day that the jury in the Enron Broadband trial began deliberations, the Enron Task Force announced that Christopher Calger, a former executive with Enron North America, had pleaded guilty to a criminal conspiracy count and agreed to cooperate...
The high price of cooperation
Berkshire Hathaway's decision to roll over and provide government investigators anything they want in connection with the multiple investigations into the transactions between Berkshire General Reinsurance Corp. and American International Group, Inc. is starting to look like a very costly...
Ebbers receives an effective life sentence
Former WorldCom CEO 63 year old Bernard J. Ebbers received a 25 year sentence for his conviction on charges of securities fraud, conspiracy and seven counts of filing false reports with regulators relating to an a multi-billion accounting fraud...
Andersen II?
Amidst echos of the Supreme Court oral argument in the Arthur Andersen case, this NY Times article reports that the oral argument before the Second Circuit Court of Appeals in former Credit Suisse First Boston investment banker Frank Quattrone's appeal...
DOJ decides not to go Arthur Andersen on Shell
Over 15 months after opening a criminal investigation into Royal Dutch/Shell Group's overstatement of oil and gas reserves, federal prosecutors announced Wednesday that they will not charge the company in the continuing criminal probe. Here are previous posts over the...
Meanwhile, checking in on the Enron Broadband trial
With the Scrushy trial out of the way, those interested in the criminalization of business are now focusing on the Enron Broadband trial, which is slogging through its eleventh week. Houston Chronicle Enron reporter Mary Flood battles through the chloroforming...
Scrushy is acquitted
Former HealthSouth Corp. CEO Richard M. Scrushy was found not guilty today by the jury in the trial over over his alleged participation in a $2.7 billion accounting fraud at the huge health services company. Along with the sentencings in...
Is Lerach a target?
The dozens of securities fraud lawsuits against Enron and various other parties are consolidated under the federal multi-district litigation rules in Houston federal court. The legal community involved in those cases is abuzz today with the news that a federal...
While Theodore Sihpol goes home, William Fuhs goes to jail
Continuing relentlessly to avoid addressing the real issue, this NY Times article speculates that the problem with Eliot Spitzer's recent unsuccessful prosecution of Theodore C. Sihpol, III was not that he charged Mr. Sihpol in the first place, but that...
The effects of criminalizing auditors
This Wall Street Journal ($) article picks up on the theme of this post from late last year -- i.e., that the government's regulation of accounting firms through criminalization of their services is contributing to the shortage of accounting firms...
More on the Sihpol acquittal
The Sihpol acquittal from last week has generated much needed criticism of the demagogic ways of New York AG Eliot Spitzer, including this Wall Street Journal ($) editorial the day after the acquittal. While the WSJ editorial rightly criticizes Mr....
KPMG = Arthur Andersen?
Over this past weekend, this NY Times article reviewed the civil litigation and criminal investigation into KPMG's mass-marketing of dubious tax shelters from the late 1990's through late 2003. Here are the previous posts over the past year and a...
Is the NY Times really reading this blog?
I speculated facetiously awhile back that some NY Times editors are reading this blog. Now, I'm really starting to wonder. First, over the weekend, the NY Times ran this less than flattering article on the Lord of Regulation's recent defeat...
When "Justice" destroys good reputations
The Sihpol acquittal yesterday focuses attention on an important aspect of the current wave of criminalizing merely questionable business transactions -- that is, the government's destruction of good reputations in its quest to obtain convictions and prevent juries from hearing...
The Lord of Regulation comments on the Anderson decision
In an interview yesterday with Wall Street Journal columnist Alan Murray, New York AG ("Attorney General" or "Aspiring Governor," take your pick) Eliot Spitzer observed that he agreed with the recent Supreme Court decision in Arthur Andersen LLP v. United...
George Melloan on the Andersen decision
George Melloan is deputy editor of The Wall Street Journal, where he is responsible for the editorial pages of The Wall Street Journal Europe and The Asian Wall Street Journal and writing a weekly column called Global View. Mr. Melloan...
More ripples from the Anderson decision
Ellen Podgor over at the White Collar Crime Prof Blog points us to two documents that raise important issues relating to the federal government's questionable policy of attempting to regulate business through criminalization of what it deems to be questionable...
What killed Arthur Andersen?
One of the most difficult lessons to learn in becoming a wise counselor is to say "no" to a good client that desires to do something wrong. In this NY Times op-ed, Times business writer Floyd Norris observes that the...
Ripples from the Andersen decision
This NY Times article reports that former Credit Suisse banker Frank Quattrone, who was convicted of obstruction of justice last year for sending out an email regarding the bank's document retention policy, is raising new issues on his appeal based...
Andersen wins at the Supreme Court
In a unanimous decision, the Supreme Court overturned the conviction of the defunct Arthur Andersen accounting firm for destroying documents relating to its client, Enron Corp., before Enron collapsed into chapter 11 bankruptcy in late 2001. Here are the previous...
Is Andersen a winner?
Although such matters are notoriously unpredictable, the SCOTUS blog -- the premier U.S. Supreme Court blog -- reports that observors of the oral argument earlier today on Arthur Andersen's appeal to the Supreme Court of its witness tampering conviction unanimously...
Deloitte pays $50 million in SEC settlement over Adelphia audit
It appears to be settlement week for big accounting firms as Deloitte & Touche joined KPMG and Arthur Andersen in settling a troubling litigation matter. Deloitte & Touche LLP announced yesterday that it will pay a $50 million fine to...
Andersen finally settles with WorldCom
The last defendant standing in the WorldCom securities fraud litigation stood down on Monday as Arthur Andersen announced that it had settled with the WorldCom class for $65 million. The settlement occurred at the beginning of the fifth week of...
Upcoming Supreme Court argument in the Arthur Andersen case
On Wednesday of next week, the U.S. Supreme Court will hear arguments over the meaning of the law under which now defunct accounting giant Arthur Andersen was prosecuted and convicted. Previous posts are here, here, here, here, and here...
Dynegy settles class action claims
Former Enron suitor Dynegy Inc. has agreed to pay $468 million to settle a class action suit that accused the Houston-based company and several of its former officers and directors of conspiring to cook the company's books to mislead investors....
Justice Department's brief in Arthur Andersen appeal
Here is the Justice Department's brief in Arthur Andersen's appeal to the U.S. Supreme Court of its criminal conviction of witness tampering in connection with its destruction of Enron Corp.-related documents during the latter stages of that company's collapse in...
Former WorldCom chairman finally settles
Former WorldCom chairman Bert C. Roberts, Jr. -- the final settlement holdout among WorldCom Inc.'s former outside directors -- agreed to settle the WorldCom investors' class-action lawsuit claims against him for $5.5 million, including $4.5 million out of his own...
WorldCom directors settle (again)
Eleven of WorldCom Inc.'s former directors who served on the WorldCom board between 1999 and 2002 yesterday agreed to revive a settlement that the District Court had earlier rejected (see earlier posts here and here) under which the directors agreed...
JP Morgan Chase settles WorldCom class action
J.P. Morgan Chase & Co. became the final major holdout in WorldCom investor class-action lawsuit to settle as it agreed to pay a cool $2 billion in the WorldCom settlement pot. The settlement came a day before jury selection was...
B of A settles in WorldCom class action
In two weeks, the trial cranks up of claims by investors and creditors who lost billions in the WorldCom accounting scandal against WorldCom's former underwriters, outside directors, and Arthur Andersen. Consequently, over the next several weeks, there will probably be...
Enron saga turns Grisham
This Weekend Advisor column in the Wall Street Journal ($) advises us that the market for books on the Enron scandal has not been all that great. The best book on the subject to date -- Bethany McLean and Peter...
NACDL files amicus brief in Andersen SCOTUS appeal
Here is the amicus curie brief of the National Association of Criminal Defense Lawyers in Arthur Andersen's appeal of its witness tampering conviction to the United States Supreme Court. The NACDL's brief addresses the prejudicial impact that the Andersen conviction...
Andersen's opening brief in Supreme Court appeal
Here is Arthur Andersen's opening brief in its appeal to the U.S. Supreme Court of the firm's 2002 criminal conviction in connection with the Enron scandal. The following is an excerpt from the brief's Statement of the Case: This case...
The same old Enron story
Following on this earlier post regarding the new Enron documentary Smartest Guys in the Room, the Houston Press' Joe Leydon is breathless in praising the documentary: Please don't misunderstand: Alex Gibney has no great beef with capitalism. Indeed, many of...
WorldCom directors settlement on the rocks
Less than a month after it was announced, the tentative settlement by 10 of 12 WorldCom Inc. directors to pay $54 million (including $18 million out of their own pockets) to settle the class-action claims against them has collapsed after...
The honest idiot defense
In this article, NY Times business columnist Floyd Norris notes the common defense that the various indicted CEO's of the business world are using these days to defend themselves against criminal charges -- i.e., that the executive was "honestly ignorant"...
Enron outside directors settlement
On the heels of this post earlier this week about the impending outside directors' settlement in the WorldCom case, this NY Times article reports on the impending $168 million settlement involving the class action securities fraud and related claims against...
SCOTUS grants cert in Arthur Andersen appeal
The U.S. Supreme Court granted certiorari on Friday on Arthur Andersen's appeal of its conviction of felony criminal charges in connection with allegedly destroying and altering Enron Corp.-related documents. The Supreme Court will review this Fifth Circuit Court of Appeals...
The criminalization of investment banking
NY Times business columnist Floyd Norris hits the nail on the head in his column today in which he observes that the rebound in the investment banking industry this year must be tempered with the plight of Daniel Bayly, the...
Criminalizing auditors out of business
As a part of a management shakeup, Fannie Mae decided late last week to fire KPMG LLP as its outside auditor after 35 years of service because its financial statements from 2001 through mid-2004 can "no longer should be relied...
Another financial institution settles in Enron class action
Confirming a deal noted here earlier, Lehman Brothers announced on Friday that it has agreed to pay $222.5 million to settle the the Enron class-action litigation against it in which the plaintiffs claimed that Lehman and other financial institutions helped...
More trouble in one of John Moores' California investments
The Justice Department announced Wednesday that a federal grand jury has indicted eight former Peregrine Systems Inc. executives with taking part in a massive conspiracy that inflated the company's revenue by more than $500 million over several years. Peregrine is...
Ken Lay PR campaign continues
On the heels of his indictment and earlier extraordinary NY Times interview, the Houston Chronicle reporter Mary Flood interviewed former Enron Chairman and CEO Ken Lay on Friday on a wide range of topics relating to the indictment, his initial...
Update on Lay indictment
It looked like a video campsite outside the Federal Courthouse in Houston on Thursday as the media gathered to observe the spectacle of former Enron Chairman and CEO Kenneth Lay being led into the courthouse in handcuffs. Mr. Lay pled...
Andersen loses appeal of its criminal conviction related to Enron
This Chronicle story reports that the Fifth Circuit Court of Appeals in New Orleans announced earlier this afternoon that it has affirmed the 2002 criminal conviction of Enron Corp's former accounting firm, Arthur Andersen for obstruction of justice. Here is...
Enron Nigerian Barge case cranks up
The first Enron-related criminal prosecution to go to trial since the 2002 case against Arthur Andersen begins today in U.S. District Judge Ewing Werlein's court in Houston. This Houston Chronicle story reports on the difficulty of finding unbiased jurors in...
The new definition of "cooperation"
This timely Wall Street Journal ($) article reports on the government's new pressure tactic in investigating and prosecuting business crimes -- pressuring businesses to condition the business' support of its employees who are under investigation on the employee's cooperation with...
Enron Nigerian Barge case gets teed up
This Chronicle article reports on the pre-trial conference yeseterday in the Enron-related criminal case commonly known as the "Nigerian Barge case," which appears to be the first Enron-related criminal case that will actually go to trial. As noted in previous...
Partial settlement in Enron employee class action
This NY Times article reports on the $85 million partial settlement that has been in the works for quite some time in the Tittle class action lawsuit involving claims of former Enron employees who lost their shares in their 401K...
Lea Fastow gets a year
Lea Fastow's plea bargain with the Enron Task Force was approved today, and U.S. District Judge David Hittner sentenced her to a year in the slammer. Mrs. Fastow plea guilty to a misdemeanor charge of income tax evasion. The Task...
Enron criminal trial postponement rejected
This Chronicle story reports on an interesting development in the Enron-related criminal case commonly referred to as the "Nigerian Barge case." U.S. District Judge Ewing Werlein rejected one of the defendants' request for a postponement of a July trial setting...
Calpers: Seperate audit from other services
When it blew up in late 2001, Enron was paying Arthur Andersen at a rate of about $1 million per week for various professional services, including audit services. Although the final chapter is yet to be written, a good case...
Change at the top of the Enron Task Force
This Houston Chronicle article reports that Andrew Weissmann, the lead trial lawyer in the Enron Task Force's Arthur Andersen obstruction of justice prosecution, is replacing Leslie Caldwell as lead lawyer for the task force. Ms. Caldwell will soon leave the...
Enron's reorganization plan
Eric Berger of the Houston Chronicle does a good job in this article summarizing the structure of Enron's plan of reorganization that is scheduled for a confirmation hearing in the New York Bankruptcy Court in April. I'm been quite involved...
Skilling Conviction no tap in
The Houston Chronicle leads with a story today that the long expected indictment of former Enron CEO Jeff Skilling this week does not mean that the government will have an easy time convicting Mr. Skilling of a crime. The same...
Enron Task Force Focusing on Skilling
The Houston Chronicle reports today that the Enron Task Force is close to indicting Jeff Skilling, the former CEO of Enron, possibly as early as next week. The recent plea bargain of former Enron CFO and Skilling protege Andrew Fastow,...
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