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Tales of Two Lives
Wednesday’s Congressional testimony of Treasury Secretary Timothy Geithner and the Department of Justice’s incredible shrinking case against former Enron CEO Jeff Skilling got me to thinking. Geithner has made his share of dubious decisions over the past several years....
The DOJ’s Merits Brief in the Skilling Appeal
On the heels of last month’s filing with the U.S. Supreme Court of Jeff Skilling’s brief on the merits of his appeal to the U.S. Supreme Court, the Department of Justice filed its brief on the merits of Skilling’s...
Tech update
Sorry about the problems accessing the blog over the past couple of days. The blog’s host server went down, so everything had to be migrated to a new server. It looks as if things are working reasonably well now....
One step forward, a big step back
Well, so finally the Department of Justice did the right thing and dismissed the remaining criminal charges against former Merrill Lynch banker, Dan Bayly, in connection with the shameful Enron-related Nigerian Barge prosecution. Even in the heavily-littered landscape of...
Understanding Adoption
One of the most discouraging aspects of the societal tide of resentment and scapegoating that has permeated the corporate criminal prosecutions since the demise of Enron has been the utter lack of perspective regarding the horrendous human cost of...
On the Tiger Myth
I really didn't think that I would do more than one post on the Tiger Woods affair, but a couple of recent articles merit taking the topic up one last time. First, in this weekend op-ed piece, the NY...
"Mr. Ruehle, you are a free man"
Larry Ribstein and the WSJ's Holman Jenkins -- both of whom exposed the vacuity of the federal government's backdating witch hunt from the very beginning -- provided their usual insightful perspective on U.S. District Judge Cormac Carney's decision earlier...
The Skilling Merits Brief
On the heels of the U.S. Supreme Court's hearing earlier this week in Conrad Black's appeal of his criminal conviction on honest services wire-fraud charges under 18 U.S.C. § 1346 ("Section 1346), former Enron CEO Jeff Skilling filed his...
John O'Quinn, R.I.P.
The Houston legal community remains in shock over the death yesterday in a car accident of famed trial lawyer, John O'Quinn. He was 68 years old at the time of his death. O'Quinn was a remarkably talented plaintiff's lawyer...
More thoughts on business "crimes"
Clear Thinkers favorite Holman Jenkins has yet another excellent column this week entitled When Bad Luck is a Crime (or, stated another way, the new crime of violating the obligation to throw in the towel). Among other points, Jenkins...
An Enron Task Force-induced nightmare ends
So, the Fifth Circuit followed the instructions of the U.S. Supreme Court and finally directed the U.S. District Court in Houston to dismiss all remaining charges against former Enron Broadband executive, Scott Yeager. The appellate court's order effectively ends...
The Leader of the Mob reacts
You know, it's not every day that a federal appellate court concludes that a newspaper's coverage of a particular event was a major factor in the creation of a presumption of community prejudice. But that's precisely what the Fifth...
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...
The mind of a true thief
Disgraced New York City attorney Marc Dreier's letter to his sentencing judge was quite interesting. His recent 60 Minutes interview is just as fascinating. Dreier -- who unquestionably stole over $400 million -- received a lighter prison sentence than former...
While you're at it, Judge Rakoff
The legal and business communities are still buzzing over U.S. District Judge Jed Rakoff's scathing refusal earlier in the week to approve the proposed $33 million "settlement" (i.e., sweep under the rug) between the SEC and Bank of America...
Enron, the play
It was probably inevitable, although I would have guessed an opening Off Broadway rather than in London. But the play is actually getting decent reviews. And it almost has to be better than this trash. Where are Zero Mostel...
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 increasing cost of public equity
Frank Quattrone, the former CSFB investment banker who has an interesting perspective, notes a dynamic of the now almost decade-long criminalization of business that I have been warning business owners and lawyers about for quite some time now --...
Why bother with a trial?
This earlier post noted the troubling indications that R. Allen Stanford and that the federal judiciary to date is doing precious little to check the prosecutorial power of the executive branch as it applies to Stanford. This is not...
The Chronicle's continuing Enron hypocrisy
Being generally an optimistic sort, I keep thinking that the financial crisis of the past year or so will eventually prompt the Houston Chronicle to reconsider its generally biased coverage of the demise of Enron over the past seven...
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...
Chalk up another trial penalty deal
With no valid case against former Enron Broadband CFO Kevin Howard, what was the Department of Justice to do? Rattle the saber of the trial penalty and cut a deal. On one hand, the deal appears to be an...
SCOTUS takes up the honest services issue
Well now, that certainly did not take long, now did it? Just a week after former Enron CEO Jeff Skilling appealed his criminal conviction and monstrous 24-year prison sentence to the U.S. Supreme Court on an allegedly erroneous application...
The state of the Skilling case
The attorneys for former Enron CEO Jeff Skilling filed a petition for a writ of certiorari with the U.S. Supreme Court yesterday, which is quite interesting and is being widely reported in the mainstream media. However, as interesting as...
McClain keeps mailing it in
This really was not meant to be my "bash the Chronicle" week. I mean, really -- the local newspaper already has enough problems. But what else can one do when confronted with this blather from the Chronicle's lead NFL columnist,...
Permanent Enron myopia
Inasmuch as what took place with regard to Enron earlier in the decade has now happened to much of Wall Street, the vacuity of the Houston Chronicle's coverage of Enron-related matters has become clear. Nevertheless, Chronicle business columnist Loren...
Remember Ken Lay?
Joe Weisenthal and Henry Blodget over at Clusterstock have been all over the breaking story yesterday that, as many of us suspected, former Treasury Secretary Henry Paulson and perhaps other governmental officials threatened Bank of America CEO Ken Lewis...
The Chronicle's Enron myopia
Even when it is on the right side of an issue, the Chronicle reminds us of its failings. As noted earlier here, it has become fashionable among the Old Media to support the recent decision of the Justice Department...
Losing the grip on AIG
The business blogosphere was abuzz yesterday over publication of AIG executive Jake DeSantis' remarkable resignation letter to AIG CEO, Ed Liddy. But what was even more remarkable was the reaction of some commentators that makes abundantly clear that common...
Getting a grip on AIG
Geez. I leave the country for ten days on a European trip and, upon my return, the entire U.S. body politic appears to be going batshit over a couple hundred million dollars of performance bonuses that the now-thoroughly Enronized...
The Journal's curious case of myopia
Bully for the Wall Street Journal for running this editorial last week decrying the prosecutorial misconduct of the Justice Department in obtaining the conviction of former Alaska Senator Ted Stevens on ethics charges (Mike over at the Crime and...
The potential consequences of being tricky
It's rarely pleasant for a businessman to have his personal affairs splashed across the front page of the New York Times business section. But it has to be particularly unsettling for the businessman when he is already the target...
Making bad policy
It sure is getting hard to keep up with all the rules involved in determining whether an important person gets prosecuted for an alleged business crime. First, there was the Apple Rule, which was quickly followed by the Dell...
Skilling fires back
As noted earlier here, the Fifth Circuit Court of Appeals panel decision in former Enron CEO Jeff Skilling's appeal of his criminal conviction was unusual in several respects. For example, even though the three-judge panel reversed Skilling's sentence and...
The criminalization-of-business lottery
The owners of Long Term Capital Management may have been the earliest winners in the most recent era of what Larry Ribstein has coined the criminalization-of-business lottery. On the other hand, Jamie Olis may have been the earliest big...
Another Angry Mob
The Fifth Circuit's decision yesterday reminded us of the angry mob that lynched Jeff Skilling. Now, as this timely Roger Parloff/Fortune article notes, an even larger mob is gathering to lynch the businesspeople who were attempting to save their...
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...
Lessons of LTCM
Marginal Revolution's Tyler Cowen makes a similar point in this NY Times op-ed about the 1998 federal bailout of the Long-Term Capital Management hedge fund that this earlier post made about Enron and the current Treasury bailout: At the...
Playing fair
So, now Alaska Senator Ted Stevens is finding out that some federal prosecutors do not play fair (H/T Doug Berman). Of course, we've known that for quite some time down here in Houston. Oh well, at least the mainstream...
Making sense of Madoff
Loren Steffy, the Houston Chronicle's business columnist, has been having a hard time lately. You will recall that Steffy was one of the leaders of the mainstream media lynch mob that embraced the myth of the Greed Narrative in...
A tuna wins a small lottery prize
As a result of the Buffet Rule, the federal government decided to land a bunch of tuna rather than the barracuda in regard to an AIG-General Re finite risk insurance transaction that was not clearly illegal, much less criminal....
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...
He should know
You just never know what those former Enron Task Force prosecutors are going to say. Last week, one of them was incongruously advocating limitation of corporate criminal liability. This week, David Westheimer points out that former Task Force prosecutor...
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...
Ghosts of Enron
Ken Lay was prosecuted to death for promoting Enron even though he had a reasonable basis for believing that what he was saying about his company was true. Fast forward a couple of years. Yesterday, the W$J reported (NYTimes...
The NatWest Three are finally going home
The NatWest Three -- the three U.K. bankers who were dragged through the Enron mud for the past five years -- are finally going home after serving about six months of their sentences in U.S. prisons. After a hearing in...
Hedging the Enron trial penalty
On the heels of this news, and given the mainstream media's ubiquitous characterization of Enron as the harbinger of the current Wall Street financial crisis, it's really not surprising that former Enron Broadband co-CEO Joe Hirko opted to cop...
Refracting Enron myopia
One of the more entertaining aspects of the current Wall Street financial crisis has been reading how some of the business columnists have been interpreting it. Take, for example, Houston Chronicle business columnist, Loren Steffy. You may remember him...
The Treasury Bailout is not rocket science
The debate over the proposed Treasury bailout of Wall Street firms is coming at a fortuitous time -- the election season. Be wary of any candidates who, after looking appropriately concerned about the dire predictions of the plan's promoters,...
That other hurricane
So, while the Houston area was enduring a hurricane, the financial markets were enduring one, too. As with Enron and Bear Stearns, the demise of Lehman Brothers reinforces the inherently fragile nature of a trust-based business (related posts here). ...
Glass houses
Dan Slater of the Wall Street Journal's Law Blog notes the Kremlin's recent refusal to grant parole to former OAO Yukos CEO Michael Khodorkovsky, who is serving an eight-year prison sentence in Siberia for tax evasion and fraud. Khodorkovsky's...
Criminal justice?
The always-insightful Larry Ribstein points out that Jamie Olis would have been better off providing material support for Osama Bin Laden than working on the beneficial structured finance transaction that ultimately led to his criminal conviction. The sad case...
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 Usual Suspects
Given the recent turmoil in the financial markets, it's a bit hard to keep up with the morality plays and the villains. After the Enronesque fall of Bear Stearns, the villains of the moment were the two Bear Stearns...
An Enron "hero" is looking for work?
This JoAnn Greco/Portfolio.com article bemoans that "famed Enron whistleblower" Sherron Watkins is having a hard time finding a job. Those dastardly employers just don't trust honest employees such as Watkins, now do they? On the other hand, perhaps the reason...
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...
Criminalizing Failure
As Larry Ribstein reports, the Enron prosecutorial veterans are already picking up the usual suspects in regard to the Bear Stearns meltdown. Meanwhile, John Carney wonders whether any investors really feel safer as a result of these criminal probes?...
Bill King's story
As Republican presidential nominee John McCain is doing his best to stoke public prejudice against job-creators and wealth builders, longtime Houston lawyer and businessman Bill King is promoting his new book, Saving Face (Somerset 2008), which is King's personal...
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....
So, what's the difference?
Mel Weiss was sentenced to 2.5 years in prison yesterday for making undisclosed payments to class representatives in class action lawsuits that his firm handled. As noted here about a year ago, Weiss didn't have much of a choice given...
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 subprime mortgage criminal lottery
Well, well, well. Look who is resurfacing in connection with the creation of the Justice Department's latest criminal Task Force to investigate whether crimes were committed when the subprime-mortgage market collapsed (just what we need -- another corporate crime...
The Wall Street Journal's Enron embarrassment
In anticipation of the oral argument on Wednesday in New Orleans on former Enron CEO Jeff Skilling's appeal of his criminal conviction, don't miss this Larry Ribstein post on Wall Street Journal Enron reporter John Emshwiller's tardy realization that...
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 Economist gets it
Following on recent posts here and here, The Economist produces the best mainstream media article that I've seen to date placing the prosecutorial misconduct of the Enron Task Force toward former Enron executives Jeff Skilling and Ken Lay in...
The Nacchio debacle
I'm shocked, absolutely shocked, that a former Enron Task Force member would have ever been involved in improperly suppressing exculpatory testimony at trial that would ultimately lead to the Tenth Circuit's reversal of the conviction of former Qwest CEO,...
That pesky trust-based business model
Over the weekend, we learned that the Fed had bailed out New York-based investment bank Bear Stearns during this unsettled time in the financial markets. Almost seven years ago, a much larger company that shared many characteristics with Bear...
The stench of prosecutorial abuse
The stench of prosecutorial abuse has long hung over the Enron-related criminal cases. But the extent of that abuse became crystal clear this afternoon when the Fifth Circuit Court of Appeals granted former Enron CEO Jeff Skilling's motion to...
More rumblings in the Skilling appeal
This post from last week noted some interesting docket entries in former Enron CEO Jeff Skilling's Fifth Circuit appeal of his conviction on criminal charges in connection with the demise of Enron. Now, it looks as if the mainstream media...
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...
What's going on in the Skilling appeal?
First, thank you to all of the many readers who have communicated their concerns and prayers for the family crisis that is precluding me from daily blogging for now. Your kind thoughts and words are comforting and much appreciated....
Maintaining Enron myths
Ever wonder how the mainstream media maintains Enron-related myths? In reporting on the sentencing hearing later this week in the Enron-related case of the three former UK bankers dubbed "the NatWest Three" (prior posts here), the Chronicle's Kristen Hays observes...
A lingering question about Refco
So, Refco's former CEO and chairman Phillip Bennett pled guilty late Friday in a Manhattan federal court to fraud and other charges stemming from the 2005 collapse of the company (previous posts here). Peter Henning analyzes the plea here. Bennett's...
The DOJ loses another Enron criminal case
As expected, the Fifth Circuit denied the government's appeal yesterday of U.S. District Judge Vanessa Gilmore's decision to vacate the final count of the government's odious five count conviction against former Enron Broadband CFO Kevin Howard. The Fifth Circuit's decision...
Criminalizing Capitalism
If I didn't know better, I'd say that Nicole Gelinas has been reading (H/T Professor Bainbridge) my blog over the past several years: [I]n the end, Sarbanes-Oxley has just made it easier for ambitious government attorneys to criminalize bad business...
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...
Another Enron Task Force alum rings the bell
Fresh off his victory in the Joseph Nacchio trial, former Enron Task Force prosecutor Cliff Stricklin is the latest former Enron Task Force prosecutor to land a cush job at a big firm. Sean Berkowitz and Andrew Weissmann, among other...
Warning labels?
Remember when the various credit-rating agencies contended that their relatively sanguine ratings of Enron's debt up until the company went belly-up were the result of the company's misrepresentations? One of the more ludicrous allegations was that the rating agencies didn't...
The human cost of questionable prosecutions
One of the more discouraging aspects of the societal tide of resentment and scapegoating that has permeated the Enron related criminal prosecutions has been the utter lack of perspective or compassion regarding the horrendous human cost of those prosecutions. We...
The power of myths
A common topic on this blog has been the power of anti-business myths within American society. Take Enron, for example. We all know how the myth played out. Enron, which was one of the largest publicly-owned companies in the U.S.,...
The Fastow notes
The big Enron-related news this week was the U.S. Supreme Court's refusal to hear the appeal of the Fifth Circuit's decision to dismiss securities fraud claims against several of Enron's banks (Ted Frank explains the decision). In light of the...
The rotting Enron criminal prosecutions
You won't read about it much in the mainstream media, but the Enron-related criminal prosecutions increasingly smell like a rotting carcass. After Jeff Skilling was lynched by an angry mob, most of the mainstream business media moved on to other...
Landing the tuna rather than the barracuda
As noted here last month, Berkshire Hathaway chairman and mainstream media folk hero Warren Buffett is a key player and, as these NY Times and W$J articles report, perhaps even a key witness in the upcoming criminal trial of a...
Behind the scenes in the Skilling appeal and the Nigerian Barge case
I normally throttle down blogging during the holiday season to just one post a day, but I wanted to pass along something that you don't see every day in connection with former Enron CEO Jeff Skilling's appeal of his convictions...
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...
A forerunner of business ethics?
Mary Flood notes that former Enron Task Force director Andrew Weissmann has been named in this Ethisphere article as one of the "100 Most Influential People in Business Ethics." They are kidding, right?. If it's acceptable to promote business ethics...
The real NatWest Three deal
I gave up hope long ago that the mainstream media would ever provide particularly accurate reports regarding the Enron-related criminal prosecutions. However, the mainstream media news reports on the plea bargain hearing earlier this week in the Enron-related NatWest Three...
Hedging the trial penalty
Although some have questioned his business ethics, no one has ever questioned that legendary Houston oilman Oscar Wyatt is good at hedging risk. After Wyatt was sentenced yesterday to a year in prison as a result of his plea deal...
The faux Enron whistleblowers
First, it was Sherron Watkins portraying herself for profit on the rubber-chicken circuit as a whistleblower of wrongdoing at Enron when, in fact, she was no such thing. Now, this USA Today article raises substantial questions regarding the credibility and...
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 NACDL's amicus brief in the Skilling appeal
The National Association of Criminal Defense Lawyers has requested permission from the Fifth Circuit Court of Appeals to be allowed to file a friend of the court brief (you can download a copy here) in the appeal of former Enron...
The Lerach deal
Former class action securities plaintiffs' lawyer William Lerach finally cut a non-cooperation plea deal (Nathan Koppel's WSJ Law Blog post is here) to resolve the longstanding criminal investigation into alleged undisclosed payments that Lerach and his firm made to class...
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...
Loren Steffy's Enron myopia
Houston Chronicle business columnist Loren Steffy is a particularly vitriolic critic of former Enron executives Jeff Skilling and the late Ken Lay. Steffy convinced himself early on that Skilling and Lay had lied to investors about Enron, so he made...
A continuing abuse of power
Economist James Buchanan won a Nobel Prize for his work on applying economics to explain how incentives impact the behavior of government officials. In short, Buchanan concluded that government officials are people who behave in the same selfish manner as...
One of downtown Houston's charms
The New York Times discovers one of the literally coolest characteristics of downtown Houston -- the pedestrian tunnel system: Where is everybody? Seared by triple-digit heat and drenched by tropical storms, midday downtown Houston appears eerily deserted, the nation’s fourth-largest...
Judge Hughes finalizes his Hyde Act ruling
These earlier posts reported on U.S. District Judge Lynn Hughes' decision to sanction the Department of Justice under the Hyde Act for its sloppy indictment and handling of a criminal fraud prosecution of Oklahoma lawyer John Claro. The always alert...
The DOJ's bumbling Enron Broadband case
As noted here and here, the Enron Broadband trials were not the Enron Task Force's finest hour. Now that the Task Force has been disbanded, Justice Department attorneys are left to pick up the pieces of the Task Force's shattered...
Tilman's bad dream
It wasn't a good end of the week for Landry's Restaurants, Inc CEO Tilman Fertitta (previous posts here). First, there was Landry's public disclosures that the company was delinquent in its regulatory filings with the SEC and that it was...
Talk about a misleading P.R. campaign
Get a load of this press release (hat tip Ellen Podgor) from the Department of Justice heralding the five year anniversary of the DOJ's Corporate Fraud Task Force. Here is the press release's description of the Task Force's accomplishments in...
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...
The influence of junk evidence on juries
What do the juries in the Conrad Black , Dr. William Hurwitz and the Enron-related criminal trials have in common? In response to the verdict in Lord Black's trial, Professor Bainbridge observed that the result appeared to be a "compromise"...
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...
$12 million = Billions in damages
American Enterprise Institute's Ted Frank provides this excellent WSJ ($) op-ed on the stakes involved in the upcoming Supreme Court decision in Stoneridge v. Scientific-Atlanta, which could seriously erode the Central Bank rule against holding financial institutions secondarily liable for...
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 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...
More on the Enronesque prosecution of Conrad Black
David Radler, the key prosecution witness against former Hollinger International chairman and CEO Conrad Black, is currently testifying in the trial. Mark Steyn's blog of the trial continues to be the "go to" site for keeping up with the proceedings....
The Glisan Interview
Tongues were wagging all over Houston this weekend as a result of Wall Street Journal reporter John Emshwiller's exclusive interview ($) with former Enron treasurer and Andy Fastow confidant, Ben Glisan (excerpts of the interview are here). The theme of...
"Somebody was guilty because they were guilty"
Mary Flood, the Houston Chronicle's lead reporter on the criminal trial of former Enron executives Jeff Skilling and Ken Lay, reports that some of the former Lay-Skilling jurors are now hitting the rubber-chicken circuit: Deliberating the fate of Jeff Skilling...
Stockman's story
Former Reagan Administration budget chief David Stockman is fighting to stay out of prison for the rest of his life as a result of a federal indictment over his stewardship of the defunct auto parts supplier Collins & Aikman. Stockman...
The real presumption in the Conrad Black trial
As I noted many times in regard to the criminal trial against former Enron executives Jeff Skilling and Ken Lay, the real presumption in the case was not the usual presumption that the defendants were innocent until proven guilty. Rather,...
The embarrassment that is the Enron Task Force
Remember when the Wall Street Journal characterized the Enron Task Force as having "a good record overall?" Well, the latest development in that "good record" is that the Department of Justice Criminal Division -- the successor to the disassembled Task...
Boom Town, USA
Maybe it's because I cut my teeth in business law during a prolonged recession in the Houston area in the mid-to-late 1980's that followed a boom cycle earlier in the decade, but these kinds of articles always worry me a...
Eichenwald's non-disclosure
Former NY Times reporter Kurt Eichenwald -- best known for his coverage of the Enron scandal for the Times and his book on the scandal, Conspiracy of Fools -- penned this Times article (related blog post here) over a year...
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...
Rich Kinder's Enron lesson
The following blurb from Houston-based Kinder Morgan's recent 10K certainly indicates that chairman and CEO Rich Kinder learned a thing or two from his experience at Enron, particularly in the area of public relations: Unlike many companies, we have no...
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,...
Enronizing the Nacchio trial
Peter Lattman notes this Jeff Smith/Rocky Mountain News article on Cliff Stricklin, the former Enron Task Force prosecutor who is gearing up as lead prosecutor in the upcoming criminal trial in Denver of Joseph Naccio, the former Qwest CEO. Naccio...
DOJ throws in the towel on appealing the Fifth Circuit's Nigerian Barge decision
The Chronicle's Kristen Hays reports on the news that was bubbling through the Houston legal community on Thursday afternoon -- the Department of Justice has decided not to mount an appeal to the U.S. Supreme Court of the Fifth Circuit...
Will Dell be saved by the Apple Rule?
It's been anything but a smooth ride for Austin-based Dell, Inc. since founder Micheal Dell announced that he was stepping aside as CEO almost three years ago. The saga came full circle this week as the company announced that Dell...
Has the BOP forgotten about Jamie Olis?
Earlier this week, Michael Kopper, one of the few true crooks in the Enron affair, traipsed off to a federal prison in west Texas to begin serving the 37 month sentence that he received in return for his testimony that...
Judge Gilmore vacates Kevin Howard's conviction
As predicted in this prior post, U.S. District Judge Vanessa Gilmore this afternoon vacated the conviction of former Enron Broadband executive Kevin Howard (prior posts here) on five counts of conspiracy, wire fraud, and falsifying books and records. A copy...
The price of favorable testimony
In response to my recent lengthy posts (here and here) on the injustice of the conviction and brutal sentencing of former Enron executive Jeff Skilling, many folks who have not followed the Enron criminal cases closely have observed to me...
Reacting to Gladwell's Enron article
It's been a week now since Malcolm Gladwell's New Yorker article on the injustice of the case against Jeff Skilling. One of the more revealing reactions to the article resulted from a question that Gladwell posed in this blog post...
Some of the reasons why Crane is taking EGL private
Channeling one of the dynamics involved in the increasing cost of public equity, Henry G. Manne (prior post here) provides this excellent Wall Street Journal ($) op-ed (available free here for the next 7 days) in which he systematically disassembles...
Jim Crane proposes to take EGL private
Last year, the Houston business community saw Kinder Morgan bail out of the increasing headache of operating as a public company. With the coming of the new year, Houston-based EGL announced that it is going private in a $1.2 billion...
Malcolm Gladwell on Enron
Malcolm Gladwell, he of Tipping Point fame, has authored this must-read New Yorker article on the demise of Enron. Although Gladwell gets a couple of things wrong, his article provides a refreshingly candid and objective view of what happened to...
Uncommon common sense to close out the year
Several items making uncommonly good sense in financial matters caught my eye on the final day of the year. First, Don Boudreaux noticed the following letter to the Financial Times from Larry Ribstein's colleague at the University of Illinois College...
The ordeal of Jamie Olis continues
As noted earlier here, former Enron CEO Jeff Skilling will report to a minimum-security prison in Waseca, Minnesota on Tuesday to begin serving the brutal 24 year sentence that he was assessed on October 23rd. On January 2, former Enron...
The injustice of the Jeff Skilling case
In a few days, unless the Fifth Circuit grants his motion to remain free on bond pending appeal of his conviction, Jeff Skilling will report to prison to begin serving a 24-year prison sentence. The image of Skilling entering that...
The Delta Center becomes the Melta Center
Naming rights deals on stadiums and arenas are notoriously speculative ventures, and sometimes the naming itself becomes rather odd. Inasmuch as debtors in bankruptcy such as Delta Airlines don't normally renew naming rights deals, a nuclear waste company has bought...
Epstein on the deferred adjudication racket
Richard Epstein of the University of Chicago and the Hoover Institution authors this WSJ ($) 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...
An NY Times snit fuels Gretchen Morgenson's nightmare
It's not every day that a newspaper editor's defense of one of the newspaper's star columnists ends up fueling the cause to expose the vacuity of the columnist's work. As noted earlier here and here, Clear Thinkers favorite Larry Ribstein...
Kopper and Koenig step up to the plate
Two more former Enron executives who copped pleas will be sentenced this morning, former Andy Fastow confidant, Michael Kopper, and former Enron investor relations chief, Mark Koenig. Both men will likely be presented today as paragons of virtue who simply...
The Enron Task Force's next loss
This earlier post highlighted the Enron Task Force's extraordinary concession regarding the invalidity of four of five counts upon which the the conviction of former Enron Broadband executive Kevin Howard was based. As noted in that post, the Task Force...
Another dirty secret of the Enron Task Force
Former Enron chief accountant Richard Causey will be sentenced tomorrow by U.S. District Judge Sim Lake, and Causey's sentencing hearing highlights another of the Enron Task Force's dirty secrets that the mainstream media has largely ignored in favor of demonizing...
Fastow singing like a canary
The NY Times' Alexei Barrionuevo provides this entertaining article on former Enron CFO Andrew Fastow's deposition in connection with the various civil lawsuits involving the demise of Enron. Frankly, it's rather remarkable that anyone would be particularly interested in what...
The Enron Task Force's extraordinary admission
Flying somewhat beneath the radar screen of the lynch mob that is fascinated with watching former Enron CEO Jeff Skilling imprisoned for the rest of his life is the case of former Enron Broadband executive, Kevin Howard. As you may...
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...
Professor Podgor on the trial penalty
As noted in this prior post, one of the most perverse elements of the government's criminalization of business in the post-Enron era has been the trial penalty -- that is, the substantially longer prison sentences that executives face if they...
The media's mistreatment of Jeff Skilling
As noted here, here, here and several other times on this blog over the past couple of years, the mainstream media's coverage of the Enron-related criminal trials has been spotty at best, shameful at its worst, particularly as it embraced...
What Skilling was really sentenced for
Former Enron CEO Jeff Skilling was sentenced on Monday to spend most of the rest of his life in prison for causing Enron's bankruptcy and resulting loss to investors. However, Skilling was neither prosecuted nor convicted for that crime. Skilling...
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...
Fifth Circuit raps the Enron Task Force's knuckles again
This news just in -- the Fifth Circuit Court of Appeals has denied the Enron Task Force's petition for en banc review of a Fifth Circuit panel's decision (previous posts here, here and here) that struck down the wire fraud...
Judge Lake dismisses the indictment against Ken Lay
US District Judge Sim Lake has overruled the Enron Task Force's dubious opposition and dismissed the indictment against the late Enron chairman, Kenneth Lay. Judge Lake's memorandum opinion is here, and his conclusion pretty well says it all: Since the...
Spitzer: Populist Warrior or Reckless Business Foe?
In this New York Sunday Times article, Mike McIntire explores the above question regarding the true nature of future New York Governor, Eliot Spitzer. I could have saved McIntire a lot of time. Seriously. A lot of time. Spitzer and...
The trial penalty issue in the Skilling case
One of the many troubling aspects of the Enron Task Force's prosecution of former Enron CEO Jeff Skilling is the "trial penalty" that Skilling faces in connection with his sentencing (which is next Monday, October 23rd) -- that is, the...
What happened behind closed doors in regard to the Fastow sentence?
As noted earlier here, the six-year prison sentence handed down earlier last month to former Enron CFO Andrew Fastow was surprising on several levels, not the least of which was that the Enron Task Force elicited extensive testimony from Fastow...
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...
So, what's the big deal about paying key witnesses?
If you're in Baltimore on Friday, you should make a point to drop in on Larry Ribstein and Bruce Kobayashi's presentation at the University of Maryland's 2006 Business Law Conference of their paper entitled What's So Bad About Paying Plaintiffs?...
GOP cruising for a bruising?
I'm certainly no political prognosticator, but a couple of matters caught my eye over the past week or so that indicate to me that the Republican Party has become dangerously concerned with maintaining power rather than providing leadership. The first...
More ripples from the Fifth Circuit's Nigerian Barge decision
Amidst the publicity on the Andy Fastow sentence and the upcoming sentencing hearing of Jeff Skilling, the legal wrangling related to the conviction of former Enron Broadband executive Kevin Howard (previous posts here) has been flying somewhat under the radar...
The surprising Fastow sentence
This Kristin Hays-Tom Fowler/Chronicle article picks up on an aspect of the six-year sentence assessed to former Enron CFO Andrew Fastow earlier this week that has largely been ignored in the media but noted earlier here -- the Enron Task...
More on the Fastow sentence
It's a good thing that Andy Fastow's counsel did not mention Fastow's following testimony on March 8 in the Lay-Skilling trial during Fastow's sentencing hearing today in front of U.S. District Judge Kenneth Hoyt: Q. Does the government decide your...
Try to make sense of this
Let's see if I get this straight. On one hand, Andrew Fastow -- who served up his wife as a sacrifical lamb for his embezzlement of millions from Enron that triggered one of the largest bankruptcy cases in U.S. history,...
An interesting letter to Judge Lake
The day before one of the relatively few real Enron criminals is scheduled to be sentenced, an interesting letter to U.S. District Judge Sim Lake became public in regard to the sentencing of former Enron CEO Jeff Skilling. During and...
Demagoging Amaranth
Following on this earlier cue, NY Times business columnist Gretchen Morgenson contends in this column (Times Select, registration required) that Amaranth Advisors, LLP's loss of $6 billion or so last week on the natural gas trading market is conclusive proof...
Jamie Olis resentenced to six years
U.S. District Judge Sim Lake resentenced Jamie Olis to six years in prison this afternoon (Olis has already served about 2.5 years in prison) in the latest chapter of the three year saga that has become arguably the starkest example...
The Fastow sentencing memorandum
As Jamie Olis awaits his resentencing for working on a transaction for which he did not profit, Andrew Fastow's lawyers (one of whom is Olis' attorney -- small world, isn't it?) filed a sentencing memorandum earlier this week that claims...
The resentencing of Jamie Olis
US District Judge Sim Lake announced yesterday that Jamie Olis will be resentenced on Friday at 2 p.m., almost a year after the Fifth Circuit Court of Appeals reversed Judge Lake's previous 24+ year sentence. As we await another chapter...
Wasting talent
So, a tortured Jeff Skilling is back in the news as a result of being cited for public intoxication while visiting Dallas a week or so ago. While many await with anxious anticipation the imposition of the harsh prison sentence...
Former EES CEO gets 2.5 years in prison
David Delainey, former CEO of Enron Energy Services, was sentenced on Monday to 2 and a half year in the pokey in connection with his plea deal in which he pled guilty to insider trading charges and sang like a...
This is "exceptional service?"
Apparently, "service" such as that described here, here and here will get you an exceptional service award from the U.S. Department of Justice. Trampling justice and the rule of law while destroying careers, jobs and wealth is "exceptional" governmental service?...
Three Houston businessmen arraigned in the Premiere Holdings criminal case
In a case that has been swirling around Houston legal and business circles for the past five years, the three former owners of Houston-based Premiere Holdings of Texas -- which promoted itself as a high-yield investment fund to prominent Houstonian...
Former Enron Assistant Treasurer gets four years probation
In the first of many sentencing hearings that will take place this fall n connection with various Enron-related criminal cases, Timothy DeSpain, a 41-year old former assistant treasurer of Enron from 1999 to 2002, was sentenced this morning by U.S....
More rumblings in the Nigerian Barge appeal
In a move that may backfire, the Enron Task Force filed this petition requesting that the entire Fifth Circuit Court of Appeals consider and reject the decision of a Fifth Circuit three-judge panel from last month (previous posts here and...
The Olis market loss hearing
The hearing phase of the re-sentencing of former Dynegy executive Jamie Olis involving the key market loss issue is taking place yesterday and today before U.S. District Judge Sim Lake, and the Chronicle's Tom Fowler files this report on yesterday's...
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 Enronesque prosecution of Conrad Black
Washington attorney Alykhan Velshi writing in this New English Review op-ed examines the Conrad Black indictment and doesn't like what he sees: The trial by attrition of Conrad Black has exposed the dark underbelly of the legal system, where the...
Institutionalized scapegoating
Two news items at the end of this week reflect the festering cauldron of resentment toward business in American society that government is manipulating to advance its troubling regulation-through-criminalization policy. First, there was the news that New York's Attorney General...
Is the backdating options scandal "the Enron of 2006?"
Yes, in an observation made yesterday during a Senate committee hearing that should send shivers up the spine of anyone concerned about the increasing criminalization of business in the United States, that's how Senator Robert Menendez (N.J. Dem) characterized the...
Wanted: Adult supervision at the Enron Task Force
This one takes the cake. After trampling justice and the rule of law for five years while damaging lives, families and careers of former Enron executives and a selected few who did nothing other than have the misfortune of engaging...
Lay and Skilling's legacy of beneficial risk-taking
During the criminal trial of Ken Lay and Jeff Skilling, attorney Paul Fisher and economist Jim Johnston of the Heartland Institute authored this piece (see also here) regarding the unjust prosecution Lay and Skilling that echos a common theme of...
An attempt to withdraw a guilty plea exposes a dirty secret of the Enron criminal cases
As noted in this previous post about the typical mainstream media view toward the Enron criminal prosecutions, most media accounts of the case have perpetuated the myth (see also here) that the Enron Task Force has done a good job...
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 drift of the Nacchio prosecution
This Denver Post article reports on the appointment of former Enron Task Force prosecutor Cliff Stricklin as the lead prosecutor in the Justice Department's criminal case against former Qwest CEO Joe Nacchio on insider trading charges. Stricklin was a member...
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...
The political implications of the NatWest Three case
This earlier post focused on the political controversy that arose in the UK over the case of the NatWest Three, the three former London-based National Westminster Bank PLC bankers who are charged in Houston with bilking their former employer of...
Throw them all in the clink
As noted earlier here and here, the practice of backdating stock options is fundamentally a disclosure issue. However, that has not stopped federal prosecutors from criminalizing the practice as new indictments are now announced almost daily. In this typically lucid...
Perpetuating the Enron Myth
As noted in this prior post on the death of former Enron chairman Ken Lay, the myth of Enron is now so fully embraced within American society that otherwise intelligent people reject any notion of ambiguity in addressing facts and...
Judge Young swings for the fences again
Doug Berman's remarkable Sentencing Law and Policy blog notes another key sentencing decision from U.S. District Judge William G. Young of Massachusetts, the jurist who declared the federal sentencing guidelines unconstitutional a few months before the U.S. Supreme Court issued...
Former TSU President Slade indicted
After a six-month investigation, the shoe finally dropped on former Texas Southern University president Priscilla Slade. A Harris County Grand Judy indicted her yesterday on charges relating to alleged use of up to $1.9 million of school property for her...
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...
Hope for sanity in sentencing of business executives?
Although just one case, at least one federal judge has concluded that the resentment and scapegoating that has driven the criminalization of business during the post-Enron era has gone too far. In this thoughtful sentencing memorandum relating to the conviction...
Let's do lunch
Yes, lunch in LA can be so interesting. You remember Barry Munitz, don't you? Former UH wunderkind president, Maxxam executive, California state university administrator and besieged Getty Museum director, the talented Mr. Munitz certainly knows how to get around the...
The spokesman for the NatWest Three
What do you do when you can't hang out and chat with your blokes? Well, in the case of David Bermingham -- one of the three former London-based National Westminster Bank PLC bankers dubbed the "NatWest Three" in the lexicon...
Sending bad messages
It's hard to imagine that the federal government could have sent worse signals to foreign investors in US markets and businesses than the ones that it sent over the past week. First, there was the latest news about the NatWest...
Can the NatWest Three receive a fair trial in Houston?
Barry Turner, lecturer in criminal law and criminal evidence at Leeds Law School, makes the following declaration in this Times Online blog post regarding the NatWest Three, who are presently awaiting a bond hearing in Houston in regard to the...
Harmless error?
This previous post passed along the motion of former Enron Broadband executive Kevin Howard's motion for new trial based on serious allegations of juror misconduct and ex parte communications between the trial judge and the jury during deliberations (previous posts...
Another strange turn in the NatWest Three case
Neil Coulbeck, former chief of North American financial markets for NatWest’s corporate bank who provided evidence to the F.B.I. and the Justice Department about Enron-related transactions involving three former NatWest Bank colleagues, was found dead in an East London park...
Crashing the Ken Lay funeral?
Overall, the Houston Chronicle's coverage of the Enron case has at least been exhaustive, if not particulalry balanced. But in the interests of exhaustive coverage, was it really necessary for the hometown newspaper to have society columnist Shelby Hodge attempt...
Judge Kaplan sticks to his guns
Federal judges and prosecutors often have a cozy relationship. So, it was not particularly surprising that Southern District of New York U.S. Attorney Michael Garcia requested that U.S. District Judge Lewis Kaplan delete the names of federal prosecutors and his...
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...
The death of Ken Lay
Former Enron chairman and CEO Ken Lay died early this morning in Colorado, reportedly of a heart attack. He was 64 at the time of his death. I have a day's worth of meetings that prevent me from collecting and...
Kerkorian's deal for GM
Kirk Kerkorian's proposed deal to save General Motors came up just before the holiday weekend, so analysis of the proposal has been sparse to date (previous posts on GM's Enronesque experience are here). Last Friday, Kerkorian's Tracinda Corp. -- the...
Playing high stakes poker at Refco's Bermuda unit
Wall Street Journal reporters Carrick Mollenkamp, Ian McDonald and Peter A. McKay have authored this article of the day ($) in updating the fascinating story on the bankrupt, New York-based brokerage firm. Refco, Inc. (prior posts here). This WSJ report...
The Lay-Skilling forfeiture motion
In the least surprising post-verdict motion to date, the Washington Post's Carrie Johnson reports that the Enron Task Force filed its forfeiture motion yesterday against former key Enron executives Ken Lay and Jeff Skilling. A bookmarked pdf copy of the...
Criminalizing corporate agency costs and the KPMG decision
As noted earlier here, U.S. District Judge Lewis Kaplan earlier this week slapped the Department of Justice upside the head for threatening KPMG with indictment in the KPMG tax shelter case unless the firm threw its partners to the wolves...
Disparate results from overreaching prosecutions
Amidst a busy summer day, I pass along a rare and quick afternoon post on disparate results emanating earlier today from a couple of cases involving overreaching prosecutions of businesspeople. First, Peter Lattman (here and here), Dave Hoffman and Ellen...
Foreshadowing a key issue in the Lay-Skilling appeal
In a strong indication that he believes that the matter raises important appellate issues, U.S. District Judge Sim Lake issued this this 22-page opinion late last week in the criminal case of former key Enron executives Ken Lay and Jeff...
The clock is ticking on the NatWest Three
As noted in these earlier posts, the Enron Task Force's prosecution of three former National Westminster Bank PLC bankers has raised a political firestorm in the United Kingdom, where the Task Force is attempting to use the 2003 Extradition Treaty...
Skilling talks
In his first meaningful public comment since being convicted on 19 criminal charges, former Enron CEO Jeff Skilling agreed to this Wall Street Journal ($)/John Emshwiller interview in which he concedes, among other things, that his decision to testify before...
Rumblings from the jury room of the first Enron Broadband retrial
As noted in this earlier post, U.S. District Judge Vanessa Gilmore's decision to conduct the re-trial of former Enron Broadband executives Kevin Howard and Michael Krautz during the latter stages of the media-saturated Lay-Skilling trial was highly prejudicial to Howard...
Scheduling conference today in the sad case of Jamie Olis
On the heels of the Fifth Circuit ordering the release from prison yesterday of two other business executives who have been subjected to the Justice Department's demonization of business in the post-Enron era, U.S. District Judge Sim Lake will conduct...
Fifth Circuit orders the release of Bayly and Furst in the Nigerian Barge case
As this earlier post anticipated, the Fifth Circuit Court of Appeals this morning ordered the release of former Merrill Lynch executives Daniel Bayly and Robert Furst pending disposition of the appeal of their controversial convictions in the Enron-related Nigerian Barge...
Never underestimate what can go on in the jury room
When you put a dozen of so strangers in a jury room together, weird things happen. That's certainly been the case recently in Chicago, where the current big news is that the defense team for former Illinois Governor George Ryan...
Lerach goes for a piece of the Kinder Morgan action
Plaintiff's lawyer William Lerach is already looking to make a handsome $1 billion fee as lead counsel in the main Enron class action securities fraud lawsuit. Now, he's looking for a little more from an Enron spinoff. Yesterday, Lerach's firm...
The Ken Lay narratives
On several occasions while covering the Lay-Skilling trial, I noted that the Enron Task Force prosecutors were presenting a fundamentally weak case in an effective manner. Quite a few commenters both here and on other blogs took me to task...
A Quick Enron Reality Check?
As expected, the Conglomerate Enron online symposium last week generated over 15 interesting posts, including ones by the reliably insightful Larry Ribstein (see also here), Ellen Podgor, Don Langevoort, Lisa Fairfax, and Thomas Joo. However, one of the final posts...
Why bother with being a public company?
Following up on thoughts expressed in this post on the Kinder Morgan leveraged buyout from earlier this week, this Opinion Journal editorial (and related WSJ ($) article) note that the trend toward private equity financing is a direct result of...
VE under the Enron microscope
With the announcement yesterday of Houston-based Vinson & Elkins' $30 million settlement of one of the myriad of lawsuits pending against the firm as a result of its representation of Enron, the WSJ's Peter Lattman notes this BusinessWeek Online article...
The Conglomerate Enron Forum
On the heels of last week's jury verdict in the Enron Task Force's legacy case against former key Enron executives Ken Lay and Jeff Skilling, Gordon Smith, Christine Hurt and the rest of the blawgers over at the Conglomerate are...
Enron Broadband jury splits the baby
The jury in the first re-trial of the Enron Broadband case that ended in a mess of acquittals and a mistrial last year convicted former EBS CFO Kevin Howard (picture on the left) this afternoon on all five counts --...
The storms of Katrina
With hurricane season officially starting tomorrow, this NY Times article about the research that has been done over the past year into Hurricane Katrina provides some interesting information, including the stages of the storm on the New Orleans metro area:...
Monday morning QB'ing the Lay defense
Yes, it's Tuesday, but the Monday morning quarterbacking on the failed defense of Ken Lay is in full swing. Donald Watkins, an Alabama-based lawyer who headed up the defense team that handled the successful defense of former HealthSouth CEO, Richard...
Lessons from an Enron short
Jim Chanos is a well-known investor and investment advisor who specializes in shorting stocks -- one of his most famous shorting targets was Enron back in 2001. Making money by selling stocks short is most often accomplished through the process...
What might have been
In a development that drips with irony on the heels of last week's jury verdict in the Lay-Skilling trial, Houston-based Kinder Morgan, Inc. announced that its management team -- led by Kinder Morgan CEO and former Enron chief operating officer,...
Lay-Skilling, Week Seventeen
Remember that point made in the previous week summaries about the predisposition of the leaders on the jury determining the outcome of the trial of the corporate criminal case of the decade? Well, in a strong indication that this trial...
More on the corporate crime lottery
Amidst an overwhelmingly negative media drumbeat, former Enron executives Ken Lay and Jeff Skilling await a jury verdict that could send them to prison for most of the rest of their lives. Meanwhile, in Amsterdam, such matters are handled a...
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...
First Enron Broadband re-trial goes to the jury today
Almost ignored amidst the media's unprecedented focus on the Lay-Skilling trial, the first re-trial in the Enron Broadband case will go to the jury today after the prosecution and defense attorneys complete their closing arguments, which are expected to last...
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...
Lay-Skilling, Week Sixteen
Week Sixteen (prior week summaries here) of the corporate criminal case of the decade was closing argument week, and the lawyers used the full 12 hours over two and a half days that U.S. District Judge Sim Lake allocated for...
Ross Perot, Jr. v. Hughes & Luce
One of the enduring law firm-client relationships of the past generation in Texas has been that between the family of Dallas billionaire Ross Perot and the Dallas-based firm of Hughes & Luce, LLP. The firm long represented Perot personally and...
Judge Gilmore blasts the Fifth Circuit
Don't expect U.S. District Judge Vanessa Gilmore to be sending any holiday greeting cards to the Fifth Circuit Court of Appeals any time soon. In this unusually candid recusal order, Judge Gilmore accuses the appellate court of making an untrue...
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...
Judge Hughes confirms Hyde Act sanction
Following on this earlier post, this Harvey Rice/Chronicle story reports that U.S. District Judge Lynn Hughes ordered the Justice Department to pay $390,000 in attorney's fees and expenses to an Oklahoma attorney as a Hyde Act sanction for a bad-faith...
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...
Our Justice Department at work
Yesterday, in the last day of testimony in the criminal trial of former key Enron executives Ken Lay and Jeff Skilling, the Enron Task Force confirmed in open court that it refuses to grant immunity to half-a-dozen former Enron executives...
Lay-Skilling, Week Fourteen
Week 14 (previous week summaries here) of the corporate criminal case of the decade is in the books and the biggest news is that U.S. District Judge Sim Lake has issued an edict that he does not want the case...
New York's dockside bully
In the movie A Man for All Seasons, Sir Thomas More had the following exchange with King Henry VIII's henchman, Thomas Cromwell, when Cromwell threatened Sir Thomas for relying on his common law right to remain silent regarding the reasons...
First Enron Broadband re-trial begins today
The three-month trial last year of five former Enron Broadband Services (nicknamed "EBS") executives on fraud and insider trading charges ended in a disastrous mix of acquittals and a mistrial for the Enron Task Force. So, this time around, U.S....
Lynn Hughes strikes again
First, he hammered the FDIC with a record sanctions award in the long-running case against Maxxam chairman Charles Hurwitz. Then, he challenged the Enron Task Force's bludgeoning of a plea bargain from a mid-level former Enron executive. Now, U.S. District...
Lay-Skilling, Week Thirteen
Week Thirteen of the corporate criminal case of the decade (prior weeks posts here) was the Ken Lay week and, based on the media reports, it was alternately either the most boring or the most entertaining week of testimony in...
The real presumption in the Lay-Skilling case
Although the key presumption in the criminal trial of former key Enron executives Ken Lay and Jeff Skilling is supposed to be that the men are innocent of the charges levied against them, a far different presumption is turning out...
Stephen Cooper's big payday
This earlier post (also see here) noted the wrangling that had developed in the Enron bankruptcy case in New York over former Enron chapter 11 CEO Stephen Cooper's $25 million "success fee" request. That success fee, mind you, was on...
Enron point and counterpoint
As former Enron chairman and CEO Ken Lay prepares to take the stand today in Week Thirteen of the corporate criminal case of the decade, I wanted to pass along an interesting exchange of posts from this past week. This...
Lay-Skilling, Week Twelve
The Jeff Skilling segment of the corporate criminal trial of the decade concluded during Week Twelve (prior week summaries are here) as the former Enron CEO testified for a bit over three days on cross-examination from Enron Task Force director...
More troubles for V&E?
As noted earlier here, the venerable Houston law firm of Vinson & Elkins has received its fair share of bad publicity for its role as primary outside counsel for the social pariah, Enron. Probably the severest criticism for V&E was...
The brewing political storm involving the NatWest Three
As the testimony of former Enron CEO Jeff Skilling concludes today in a Houston courtroom, a political firestorm is brewing in the United Kingdom over the Enron-related case of the NatWest Three (previous posts here) -- the three former London-based...
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...
Lay-Skilling, Week Eleven
Week Eleven of the corporate criminal case of the decade (previous week summaries here) was the Jeff Skilling Week, and the former Enron CEO did not disappoint. In over three and a half days of direct examination (of which I...
Defending Mr. Skilling
As I look forward to sitting in for a couple of hours this afternoon during the direct examination of former Enron CEO Jeff Skilling in Houston federal court, attorney Paul Fisher and former Amoco economist Jim Johnston provide this interesting...
Is the worm turning in favor of the NatWest Three?
This London Daily Telegraph article reports that the Enron-related case of the NatWest Three (previous posts here) -- the three former London-based National Westminster Bank PLC bankers who are charged in Houston with bilking their former employer of $7.3 million...
She's everywhere!
On the heels of her cameo at the Lay-Skilling trial, the ubiquitous one -- Houston Congresswoman Sheila Jackson Lee -- gets more camera time standing next to colleague Cynthia McKinney apologizing about waylaying a Capital Hill police officer. Slampo will...
Will Jamie Olis be freed pending re-sentencing?
This Tom Fowler/Chronicle article reports on the oral argument yesterday at the Fifth Circuit Court of Appeals in New Orleans on former Dynegy executive Jamie Olis' appeal of U.S. District Judge Sim Lake's denial of Olis' motion to be released...
Lay-Skilling, Week Ten
After only one week of the defense's case and the tenth week of trial (prior week summaries here), it has become clearer than ever that the Enron Task Force's prosecution of former key Enron executives Ken Lay and Jeff Skilling...
Houston well-represented in the Fortune 500
Fortune magazine has just published its annual Fortune 500 list of America's largest public companies, and ExxonMobil again leads the pack. ConocoPhillips weighs in as Houston's largest public company at number six on the Fortune 500. Here is the top...
Will the other Merrill Lynch executives be freed?
On the heels of the Fifth Circuit Court of Appeal's extraordinary order last week commanding the release of former Merrill Lynch executive William Fuhs, the three other Merrill Lynch executives convicted in the Enron-related Nigerian Barge case -- including Merrill's...
Myths about Martha
In the original version of this Chronicle story (since revised) about Jeff Skilling's upcoming testimony in the Lay-Skilling trial and the importance of witness preparation, Austin-based jury consultant Doug Keene is quoted as making the following observation about Martha Stewart:...
Charting Lay-Skilling
In connection with this NY Times/Alexei Barrionuevo and Kurt Eichenwald article on the upcoming testimony of former key Enron executives Ken Lay and Jeff Skilling, the Times provides this handy chart of the government's core allegations in the trial. The...
When even Tiger can't help
The Enronesque experience of General Motors has been a common topic on this blog, but you know it's gotten bad for the automaker when even Tiger Woods's endorsement appeal cannot bolster one of the company's brands. This John O'Dell/LA Times...
Lay-Skilling, Week Nine
U.S. District Judge Sim Lake declared "Spring Break" at the conclusion of a short Week Nine of the criminal trial of former key Enron executives Ken Lay and Jeff Skilling as the prosecution concluded its case-in-chief and the Lay-Skilling team...
Fifth Circuit orders William Fuhs released from prison
In an extraordinary development, the Fifth Circuit Court of Appeals this afternoon -- just three weeks after oral argument in the appeal by four Merrill Lynch executives of their convictions in the controversial Enron-related Nigerian Barge case -- ordered former...
The Convertino case
Clear Thinkers favorite Peter Henning provides this cogent analysis of the important case of Richard Convertino, the former Assistant U.S. Attorney who was indicted yesterday on conspiracy, obstruction of justice, and perjury charges for his part as lead counsel in...
GM's Enronesque slide continues
Geez, talk about a bad day at the office. Embattled General Motors (prior posts here) conceded in its delayed regulatory filings filed yesterday that it had found "material weaknesses" or "significant deficiencies" in the company's accounting controls, and that the...
Bid high, then settle
Stephen Cooper, the fellow who oversaw Enron's liquidation for a couple of years, has backed off his request for a $25 million "success" fee (earlier post here) -- on top of his $1.3 million annual salary and tens of millions...
Criminalizing an executive's right to counsel
In the post-Enron era of criminalizing business, a business executive's attorney-client privilege with the company counsel of the executive has already become largely illusory (posts here, here here and here). Now, according to this Nathan Koppel/WSJ ($) article, the government...
Comparing Martin Frankel and Jamie Olis
Outside the glare of the trial of the corporate criminal case of the decade, a true corporate crook -- financier Martin Frankel -- was re-sentenced yesterday in a post-Booker hearing to 17 years in prison for pulling off one of...
Lay-Skilling, Week Eight
Week Eight (previous week summaries here) of the corporate criminal case of the decade drew to a close on Thursday with former Enron treasurer and Andy Fastow protégé Ben Glisan on the stand and with the Enron Task Force announcing...
The Glisan Deal
When former Enron treasurer and Andy Fastow henchman Ben Glisan cut his plea deal with the Enron Task Force in September, 2003, he did not -- unlike most other Enron plea bargainers -- enter into a cooperation agreement that required...
The costs of Quattrone
Ellen Podgor and Peter Henning do a great job of breaking down the issues and details of the Second Circuit's decision in overturning the conviction of Frank Quattrone yesterday, so I'm attempting to step back and assess the big picture....
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...
GM's Enronesque experience continues
This Floyd Norris/NY Times article reports that General Motors' descent toward what is increasingly looking like an inevitable reorganization is looking absolutely Enronesque: There was a time when General Motors was seen as the paragon of financial quality. Its bonds...
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...
Where is Waldo?, er, I mean Causey?
The mainstream media covering the criminal trial of former key Enron executives Ken Lay and Jeff Skilling continues mostly to miss the point that the prosecution's case over almost seven weeks now has been extraordinarily weak for a case of...
The Enron Task Force's unraveling Nigerian Barge case
Early last week, oral arguments were heard in the Fifth Circuit Court of Appeals on the appeal of the four Merrill Lynch executives who were convicted of wire fraud and conspiracy charges in November 2004 in the trial of the...
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'...
A real hero
While enduring Andy Fastow's explanations this past week on how he was a hero at times while working at Enron, I've been meaning to note the story of a real hero, Dallas-based blogger and writer, Virginia Postrel. Check out Virginia's...
Lay-Skilling, Week Six
The Andy Fastow Week of the criminal trial of former key Enron executives Ken Lay and Jeff Skilling drew to a quiet close on Thursday afternoon, which contrasted sharply with the crispness of his heavily-scripted direct examination and the combative...
The increasingly bizarre case of Lea Fastow
As expected, the media is all over the well-scripted direct examination of former Enron CFO Andy Fastow, although some media sources are already questioning the credibility of some of Fastow's direct testimony. However, given the breadth of Fastow's direct examination,...
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 risk of going for the cheap score
Former Enron Broadband chief operating officer Kevin Hannon will finish his testimony today in the trial of former key Enron executives Ken Lay and Jeff Skilling. Most likely, with the testimony of former Enron CFO Andy Fastow to follow, Hannon's...
Oral argument today in the Nigerian Barge appeal
Oral argument takes place today at the Fifth Circuit Court of Appeals in New Orleans in the appeals of Dan Bayly, Robert Furst, James Brown and William Fuhs, the former Merrill Lynch executives who were convicted of wire fraud and...
Lay-Skilling, Week Five
The pace of the Enron Task Force's legacy case against former key Enron executives Ken Lay and Jeff Skilling continued to pick up pace during its fifth week (earlier weekly summary posts here), but that quicker pace is highlighting an...
Criminalizing the business reporters
The increasing criminalization of business took an interesting turn earlier this week when the Securities and Exchange Commission's San Francisco office subpoenaed email and other documents from several journalists, including one who works at Dow Jones Newswires, another at MarketWatch.com,...
What is the presumption in the Lay-Skilling trial?
Chronicle business columnist Loren Steffy responds to this weekend post on the high price of asserting innocence and hindsight bias in prosecutions of corporate agency costs by urging us to remember the supposed lies that Ken Lay and Jeff Skilling...
While the price of asserting innocence is high, pleading guilty is lucrative
Alexei Barrionuevo, who has been doing a fine job covering the day-to-day developments in the Lay-Skilling trial for the New York Times, and his Times colleague Kurt Eichenwald -- who has written the best overall book on the Enron scandal,...
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...
Lay-Skilling, Week Four
Long trials tend to settle into a rhythm, and the criminal trial against former key Enron executives Ken Lay and Jeff Skilling is no exception. After four weeks of trial, the prosecution has put on three substantive witnesses. Each one...
The wit and wisdom of Sim Lake
U.S. District Judge Sim Lake is widely-considered to be one of the best jurists in Houston, and his no-nonsense handling so far of the criminal trial of former Enron executives Ken Lay and Jeff Skilling reflects why he is so...
NatWest Three prepare for a long trip to Houston
The downtown Federal Detention Facility is not normally the destination of choice for U.K. bankers traveling to Houston, but it is looking increasingly as if that's where three former U.K. bankers embroiled in a transaction devised by former Enron CFO...
While Sheila Kahanek tells her story, William Fuhs sits in prison
During its four year existence, the Enron Task Force has always been better at bludgeoning plea bargains and villifying former executives in the media than actually obtaining convictions in court. One of the former Enron executives who stood up to...
Lay-Skilling, Week Three
The glacial pace of the criminal trial of former key Enron executives Ken Lay and Jeff Skilling quickened this week, as former Enron Broadband CEO Ken Rice finished his testimony after not quite three days on the stand. Although the...
Give me a break
The Chronicle's Mary Flood reports that, upon completion of Mark Koenig's testimony earlier today in the Lay-Skilling trial, Koenig's lawyer released the following statement: "Mark Koenig has completed his testimony, and he will have nothing more to say until this...
"That you didn't really mean it is why we want to use it"
Even though most of the action is in the courtroom during the ongoing trial of former key Enron executives Ken Lay and Jeff Skilling, a few interesting tidbits still arise from time to time on the docket of the case....
Week Three Lay-Skilling trial schedule
As second week of the criminal trial of former key Enron executives Ken Lay and Jeff Skilling comes to a lumbering close, the beginning of the third week will bring a new witness and renewed interest in the trial. My...
Two interesting interviews
Economist Milton Friedman (previous posts here, here and here) and former General Electric CEO Jack Welch are the subject of a couple of recent interviews and, as usual, both of them have interesting observations to pass along. First, Friedman: "The...
Thinking about GM
These posts over the past year have chronicled General Motors' Enronesque slide toward what is increasingly appearing to be an inevitable reorganization case under chapter 11 of the U.S. Bankruptcy Code. That probable fate was reinforced this past week when...
Lay-Skilling, Week Two
At the outset of the criminal trial of former key Enron executives Ken Lay and Jeff Skilling, the Enron Task Force prosecutors estimated that it would take nine weeks to put on its case-in-chief against the defendants. Inasmuch as that...
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...
The second Lay-Skilling prosecution witness
The NY Times Alexei Barrionuevo, who is writing some of the best background pieces in connection with the criminal trial of former key Enron executives Ken Lay and Jeff Skilling, profiles former Enron Broadband CEO Ken Rice today, who is...
"You didn't think we really meant that, did you?"
During opening arguments last week in the criminal trial of former key Enron executives Ken Lay and Jeff Skilling, Lay defense attorney Mike Ramsey made the following observation to the jury about the Enron Task Force's indictment against the two...
What? A business scandal in The Woodlands?
The Woodlands is a dynamic suburban community on Houston's far northside, but it's not the type of place that one normally associates with business scandals. However, late last week, it appears that The Woodlands had its own real business scandal....
Week Two Lay-Skilling trial schedule
After a slumbering close to Week One of the criminal trial of former key Enron executives Ken Lay and Jeff Skilling, the prosecution will almost certainly attempt to pick up the pace of the trial this week. The prosecution will...
Short selling, Enron and Jamie Olis
Now that title got your attention, didn't it? ;^) Selling stocks short receives a bad rap generally because it generates profits from misfortune -- i.e., when the stock price goes down -- which is counter-intuitive to how most folks believe...
Lay-Skilling, Week One
So, week one of the Lay-Skilling trial is in the books. Let's review what we've learned. U.S. District Judge Sim Lake handles matters faster than the prosecutors and the defense attorneys do. Opening arguments are too long. The key evidentiary...
Shoe drops on former AIG and General Re execs
Almost lost amidst the publicity over the first day of testimony in the Enron-related Lay-Skilling trial was the news that a Virginia federal grand jury had issued indictments against former General Re Chief Executive Ronald Ferguson, former General Re Chief...
The long slog begins
Former Enron investor relations chief Mark Koenig led off the prosecution's presentation of evidence yesterday in the criminal trial of his former bosses, Ken Lay and Jeff Skilling, and it quickly became clear that the Enron Task Force's boring approach...
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...
The logistics of blogging the Lay-Skilling trial
Dwight Silverman is the technology columnist for the Houston Chronicle and is primarily responsible for ushering the local newspaper into the forefront of media and citizen blogging. In this timely post, Dwight outlines the logistics involved in gearing up the...
Speaking of that key evidentiary issue . . .
Peter Lattman posts this interesting piece on the oral argument in the Bernie Ebbers appeal that could well impact the key evidentiary issue in the ongoing trial of former Enron executives Ken Lay and Jeff Skilling. In the Ebbers appeal,...
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...
The schedule for the trial of the Enron legacy case
9 a.m. today: Jury selection, Ceremonial Courtroom, 11th floor, Bob Casey Federal Courthouse, 515 Rusk. The NY Times' Alexei Barrionuevo and Simon Romero report on the all-important jury selection process, which U.S. District Judge Sim Lake will handle himself and...
The Fazio Course of the Club at Carlton Woods
The day before the beginning of the Enron Task Force's legacy case, you probably figured that you would find an Enron-related post here today. But before turning to the long slog of that trial, a beautiful late-January Texas day has...
"You're fired, but you better keep selling our products"
Let's get this straight. Last year, American International Group's board effectively canned its chairman and CEO, Maurice "Hank" Greenberg -- the man responsible for building the company into an insurance industry behemoth over the past generation -- in order to...
The key evidentiary issue in the Lay-Skilling case
The Chronicle's Mary Flood leads today with this timely article on the key evidentiary issue in the upcoming criminal trial of top Enron executives, Ken Lay and Jeff Skilling -- to what extent the prosecution will be able to get...
The difference between theory and reality in regard to SOX
When I first saw this Washington Post article earlier today that assessing the overall effect of Sarbanes-Oxley on corporate governance in the post-Enron era, I thought about posting a piece on it, particularly given that SOX does not really deter...
Lay-Skilling trial is a tough ticket
The Chronicle's Claudia Feldman reports on the logistical challenge of accomodating the overflow of media representatives and spectators during the upcoming trial of former key Enron executives Ken Lay and Jeff Skilling. Inasmuch as U.S. District Judge Sim Lake's courtroom...
Are you ready to rumble Enron-style?
As the scheduled Monday commencement of the criminal trial of former key Enron executives Ken Lay and Jeff Skilling draws nearer, the Chronicle's Mary Flood -- who has spent more time on the frontlines of Enron-related cases than any other...
The focused Mr. Skilling
Following on this earlier profile, the Chronicle's Mike Tolson provides this extensive profile today of former Enron CEO Jeff Skilling as he gears up for the commencement of the Super Bowl of Enron criminal trials next Monday. Echoing thoughts that...
Profiting from criminalizing business
Andrew Weissmann, the former head of the Enron Task Force who stepped down last year at the conclusion of the Task Force's disastrous Enron Broadband trial, is joining the New York office of law firm Jenner & Block where he...
Emshwiller's Enron surprise
John Emshwiller of the Wall Street Journal ($) weighs in today on the defense strategy of former Enron key executives Ken Lay and Jeff Skilling for their upcoming criminal trial, and he is surprised to find that Lay and Skilling...
Jeff Skilling, interior designer
Fresh off this informative article on the energy trading industry from over the weekend, the NY Times' Alexei Barrionuevo scores again with this entertaining article on how former Enron chief executive officer Jeff Skilling designed and outfitted his defense team's...
The pawn in the Milberg, Weiss game
This fascinating Rhonda Rundle W$J article profiles Southern California attorney Seymour Lazar, who was indicted last year for supposedly taking illegal kickbacks from Milberg Weiss Bershad & Schulman, the former law firm of securities fraud plaintiffs lawyers, William Lerach and...
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...
Missing the point
Chronicle business columnist Loren Steffy has been a harsh critic of Enron and its former key executives, Ken Lay and Jeff Skilling. In their motion to transfer venue of their upcoming criminal trial, Lay and Skilling have used Steffy's past...
More prosecutorial misconduct in the sad case of Jamie Olis
One can only wonder when the mainstream media will pick up on the outrageous conduct of the Justice Department in the sad case of former mid-level Dynegy executive Jamie Olis? First, in a prosecution that probably should never have been...
Successful Enron veterans expose myths
A couple of NY Sunday Times articles reports on the success of a number of former Enron executives. However, in doing so, the Times misses a major point that is sadly lacking in most mainstream media accounts of Enron's demise....
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...
Lay-Skilling trial no lay up for the Enron Task Force
Professors Bainbridge and Ribstein point to this Roger Parloff/Fortune magazine article that does a good job of summarizing the problems that confront the Enron Task Force in making its case against former key Enron executives Ken Lay and Jeff Skilling,...
Picking darkhorses in a new market
Maybe if Enron hadn't collapsed, it wouldn't have taken this long for this new market to develop. Tyler Cowen points us to the The Ticket Reserve, a web-based company that has created an options market for tickets to championship sporting...
The drift of the Lay-Skilling case
As noted earlier here, the clear drift over the past several weeks of the Enron Task Force's case against former key Enron executives Ken Lay and Jeff Skilling has been toward the charges relating to alleged misleading disclosure of material...
The Talented Mr. Kopper
The NY Times' Landon Thomas, Jr. -- whose interesting article on former Merrill Lynch executive Nigerian Barge defendant Daniel Bayly was highlighted in this previous post -- scores again today with this fascinating article on Michael J. Kopper, the former...
Causey still not on Task Force's witness list
The Chronicle's Mary Flood reports that former Enron chief accountant Richard Causey, who pled guilty to a single count of securities fraud last week under an plea deal in which he agreed to serve seven years in prison, is still...
The high price of asserting innocence
Last week, former Enron chief accountant Richard Causey pled guilty to a single count of securities fraud and agreed to a seven-year prison term after vigorously defending himself from multiple charges of business crimes for over two years. Had he...
Jamie Olis resentencing hearing postponed
The long-awaited resentencing hearing in the sad case of Jamie Olis that was scheduled to take place today has been postponed indefinitely to give U.S. District Judge Sim Lake time to review recently-filed materials in the case relating to the...
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 pleads to seven years
As expected, former Enron chief accountant Richard Causey pled guilty Wednesday afternoon to a single count of securities fraud while agreeing to a prison sentence of seven years and a fine of $1.250 million. A bookmarked copy of the plea...
Causey plea deal expected today
The Chronicle, the Wall Street Journal ($), 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...
Cleaning up on mopping up Enron
The Washington Post's Carrie Johnson -- who has written more balanced articles on the Enron scandal than her better-publicized colleagues in the mainstream media -- weighs in with this interesting piece today on the process of selling Enron's remaining assets...
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...
The Wall Street Journal's Enron conflict of interest
The Wall Street Journal's ($) John Emshwiller reports that former Enron chief accountant Richard Causey is currently negotiating with Task Force prosecutors regarding a possible plea bargain under which he would testify against his former bosses, Ken Lay and Jeff...
Calpine tanks
In a widely-anticipated move, Calpine Corp. filed a chapter 11 case the Southern District of New York yesterday (I'll bet getting a case of that size filed during the N.Y. transit strike was fun) to restructure over $17 billion in...
An incredible story about webcam porn
NY Times reporter Kurt Eichenwald -- best known for his coverage of the Enron scandal for the paper and his book on the scandal, Conspiracy of Fools -- pens this remarkable Times article, which tells the incredibly sad story of...
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...
Ruling against the Enron retention bonuses
Among the more interesting civil cases that arose out of the Enron Corp. bankruptcy case are the various lawsuits that were filed to recover retention bonuses paid to former key Enron executives. Retention bonuses are payments made to a company's...
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...
Fastow: "What do you mean 'tax fraud?'"
This earlier post noted that Lea Fastow -- a former mid-level Enron executive and wife of demonized former Enron CFO Andrew Fastow -- was prosecuted more harshly than normal for tax fraud because of her relationship to Fastow and endured...
Duke traders acquitted on most counts
In another stunning loss for federal prosecutors in the post-Enron prosecutions of persons involved in the energy trading industry, a federal jury in Houston federal court yesterday acquitted former Duke Energy trader Todd Reid on all counts of conspiracy, fraud...
The myth of the government cure-all
Sometimes it's hard to keep up with all the muddled thinking that is passed off as keen economic insight in much of the mainstream media. My thoughts along these lines started last week with this David Ignatius/Washington Post op-ed in...
More Enron indictments on the way?
As anticipated in this earlier post, U.S. District Judge Sim Lake concluded in a hearing yesterday that the defense team of former key Enron executives Ken Lay, Jeff Skilling and Richard Causey had not established in his mind that prosecutorial...
Avoiding GM's Enronesque experience
General Motors' seemingly intractable descent into chapter 11 has been a common subject here, so I took notice of this Sean Gregory/Time magazine article that explores the following question: why are the U.S. manufacturing plants of foreign automakers thriving while...
The Times mudslings at the Texas Genco deal
You can't slip a deal past the New York Times in which too much money is being made. In this article that is clearly intended to decry capitalists taking advantage of deregulated markets, the Times compares the sellers in the...
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...
Case against former Duke Energy traders goes to the jury
This Bloomberg News article reports that the criminal case against former Duke Energy traders Timothy Kramer and Todd Reid went to the jury yesterday in Houston federal court. Messrs. Kramer and Reid are charged with racketeering, conspiracy, wire and mail...
Spitzer drops another misguided prosecution
Following the decision to drop his dubious prosecution (or was that persecution) of Theodore Siphol in regard to alleged improper trading of mutual funds (here, here, here and here), New York Attorney General Eliot Spitzer dropped similar fraud and larceny...
USA Today scoops the majors in analyzing the Enron Task Force's legacy case
Is it just me or does anyone else find it odd that this USA Today article is doing a better job of covering the prosecutorial abuse that is taking place in the Enron-related criminal cases than supposedly more thorough national...
Disassembling the case against DeLay
This earlier post noted the weak nature of the indictment against former House Speaker Tom DeLay, although the Republican outrage over the indictment rings somewhat hollow. But following up on the thought about the dubious basis of the indictment, former...
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...
Lay-Skilling-Causey witness intimidation allegations scheduled for hearing
This Mary Flood/Chronicle article reports that U.S. District Judge Sim Lake has scheduled a hearing in the Enron Task Force's legacy case against former key Enron executives Ken Lay, Jeff Skilling and Richard Causey over the defendants' allegations that the...
The judge said what?
New York Bankruptcy Judge Prudence Carter Beatty -- who is overseeing the Delta Airlines chapter 11 case -- is apparently somewhat of a live-wire on the bench. The airline pilots union has already asked her to recuse herself over remarks...
Checking in on GM's Enronesque experience
Following up on posts here and here from last week, General Motors' seemingly relentless descent into a formal reorganization under chapter 11 continued yesterday as its share price fell to its lowest closing since December, 1991. Previous posts on GM's...
The troubling case of the NatWest Three
The NatWest Three are the three former National Westminster Bank PLC bankers based in London -- David Bermingham, Giles Darby and Gary Mulgrew -- who are charged in Houston with bilking their former employer of $7.3 million in one of...
Are the WaPo editors reading Clear Thinkers?
On the heels of yesterday's post regarding General Motors' Enronesque experience, the Washington Post business section leads with this article today that links General Motors and the "b word" in the same headline, and includes the following tidbit of information:...
Roping in the hedge funds
As the regulators and financial media wait on pins and needles for the next Enronesque experience in business, much attention has recently been focused on the generally unregulated -- at least until now -- world of hedge funds. David Skeel...
Where it first does not succeed, the Enron Task Force tries, tries again
The Chronicle's Mary Flood reports in this article that the Enron Task Force has obtained three "streamlined" indictments against the five former Enron Broadband executives who were the subject of the previous failed Task Force prosecution over the same subject...
Meanwhile, with regard to Shell's Enronesque experience . . .
Remember Royal Dutch/Shell's Enronesque experience relating to overstatement of reserves from last year? Well, the British equivalent of the SEC -- the Financial Services Authority, or FSA -- announced yesterday that it had concluded its investigation of former senior Shell...
GM's Enronesque experience continues
Already under the pressure of an SEC investigation into its accounting, beleagured automaker General Motors Corp. announced late yesterday -- after the close of New York Stock Exchange trading -- that it will restate financial results for 2001 by reducing...
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...
Steffy on the sad case of Jamie Olis
Chronicle business columnist Loren Steffy -- who blogs over at Full Disclosure -- does not generally share my view that government has gone overboard in the post-Enron era of criminalizing merely questionable business transactions. However, when it comes to the...
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...
Finally, some justice for Jamie Olis
The sad case of Jamie Olis has been a frequent topic on this blog as an egregious example of the injustice that has resulted from the government's increasing criminalization of business in American society. Last night, after many months of...
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 --...
What really happened at Refco?
Those of us who have been following the Refco case are familiar with the allegations that have brought the big securities trader to its knees in bankruptcy -- Refco's former CEO, Phillip R. Bennett, hid ties to the bad debt...
Enron cases are simply different
It is standard operating procedure in white collar criminal cases for the defense attorney to advise the defendant not to make public statements prior to trial so as not to risk making a statement that the prosecution could discover and...
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...
Finessing witness intimidation
When Don Corleone wanted to intimidate someone, he would "make them an offer that they could not refuse." Taking a page from the Don's book, when the Enron Task Force wants to intimidate a favorable defense witness from testifying in...
Refco's Enronesque experience
As noted in this earlier post, an old fashioned run on the bank resulting from a lack of trust in the marketplace -- as opposed to losses attributable to a relatively small number of shady business deals -- is what...
Criminal case against former Duke Energy traders goes to trial
It's not as sexy as some of the Enron-related criminal trials, but the trial of two former Duke Energy natural gas traders began in Houston federal court yesterday. Former Duke traders Timothy Kramer and Todd Reid face racketeering, conspiracy, wire...
More on criminalizing risk-taking
Robert Weisberg is Edwin E. Huddleson, Jr. Professor of Law and director of the Criminal Justice Center at Stanford University, where he teaches a course on white collar crime with David Mills, who is a senior lecturer there. In this...
WSJ editors do better, but where have they been?
After criticizing the Wall Street Journal yesterday for running a listless article about prosecutorial misconduct in the Enron-related criminal cases, it's only fair to note that the WSJ editors do much better today in this editorial ($) (see this related...
Is this all the better that the WSJ can do?
I recognize the Wall Street Journal's John R. Emshwiller has already cashed in on the Enron saga. But even that reason for wanting to move on to something else cannot explain this tepid ($) article on the prosecutorial misconduct that...
Defending the most important executive perk
A fair bit of chatter was generated in the locker rooms of many golf clubs over the past weekend by this Wall Street Journal ($) article on Friday that detailed the rather embarrassing use of corporate aircraft as airborne limousines...
Langone unmasks the Lord of Regulation
You remember Kenneth Langone, don't you? Mr. Langone is the co-founder of Home Depot who chaired the New York Stock Exchange compensation committee that approved Richard Grasso's $140 million pay package. As a result, he is a defendant along with...
The myopia of the Times
It should be considered progress whenever the New York Times runs an article questioning the draconian prison sentences that are being handed down to business executives in connection with the government's criminalization of business during the post-Enron era. However, one...
A Judge challenges the Enron Task Force's bludgeoning of a plea bargain
A frequent topic on this blog has been the unjust nature of the government's questionable tactic of bludgeoning business executives into plea bargains by playing on the executive's fear of a draconian prison sentence (often an effective life sentence) if...
Duke Energy sheds wholesale power and trading assets
In a move that was widely-anticipated in energy circles, Duke Energy Corporation plan to shut most of its money-losing wholesale power and trading businesses and take a third-quarter pretax charge of about $1.3 billion. Duke is shedding most of its...
2006 -- The Enron Trial Year
Over four years after Enron's descent into bankruptcy, 2006 is shaping up as the year of the Enron criminal trials. First, in mid-January, the trial of the Enron Task Force's legacy Enron case -- i.e., the trial that everyone will...
Woody Hayes' advice to defense counsel in the Enron cases
Peter Henning over at the White Collar Criminal Prof Blog is skeptical that U.S. District Judge Sim Lake's letter-writing campaign is going to induce any of the recalcitrant witnesses in the criminal case against former Enron executives Ken Lay, Jeff...
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...
Judge Lake's letter-writing campaign
In a hearing yesterday afternoon in Houston federal court, U.S. District Judge Sim Lake continued to grapple with strong evidence that the Enron Task Force has engaged in a systematic campaign of intimidating witnesses in the upcoming trial of former...
The Lay-Skilling-Causey motion to dismiss
As noted in earlier posts here and here, the longstanding suspicions that the Enron Task Force has been engaging in witness tampering in the Enron-related criminal cases is now in full public view. This Mary Flood article reports on the...
More on the illusory attorney-client privilege
Picking up on the subject of this post from a couple of months ago, this NY Times article notes that corporate targets of criminal investigations can no longer effectively rely on the attorney-client privilege protecting communications between corporate representatives and...
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...
Judge examining Lay-Skilling witness tampering charges
Following on this post from earlier this summer, U.S. District Judge Sim Lake gave his strongest indication to date that he is prepared to take action against the Enron Task Force's strategy to deny former Enron chairman Ken Lay, former...
DeGabrielle is the choice for U.S. Attorney
First Assistant U.S. Attorney Don DeGabrielle -- the favored candidate of most of Houston's criminal defense bar -- was recommended to President Bush today by Texas Senators Kay Bailey Hutchison and John Cornyn to become the next U.S. Attorney for...
The Enron Task Force attempts to muzzle Sherron Watkins
When the Task Force fingered the record number of 114 co-conspirators in their legacy case against former Enron chairman Ken Lay, former CEO Jeff Skilling and former chief accountant Richard Causey, the Task Force effectively ensured that most defense witnesses...
Criminalizing statements that perpetuate a myth
Regulation FD requires full disclosure of securities issuers’ communications with analysts for the supposed purpose of protecting the hypothetical ordinary investor. It's one of those regulations that sounds good on the surface, but fails miserably in practice. The truth is...
Did Gordon Gekko think of that?
Well, the government's seemingly relentless campaign to criminalize business in the post-Enron era has finally reached the one industry -- the movie business -- that relishes such matters when they happen to somebody else. The Wall Street Journal ($) is...
Securities litigation is like Being John Malkovich?
Peter Henning comes up with that apt description of Bruce Carton's analysis of the black hole that is developing in the securities litigation arena, where litigation seemingly begets litigation about the original litigation. The latest example is speculation over Milberg...
More on criminalizing risk taking
Vic Fleischer over at the Conglemerate blog continues his campaign to increase the business of the white collar criminal defense bar with a couple of posts (here and here) in which he suggests that "financial engineering" of the type that...
Two banks settle Enron bankruptcy estate claims
J.P. Morgan Chase & Co. and Toronto-Dominion Bank announced yesterday that they had agreed to pay about $420 million to settle their parts of the "Megaclaims" lawsuit that the Enron bankruptcy estate filed against 10 banks for allegedly aiding and...
Important substantive consolidation decision
The Third Circuit Court of Appeals issued this decision yesterday in connection with the Owen Cornings chapter 11 case in which it reversed a bankruptcy court decision that substantively consolidated Owens Corning and its numerous units as one entity for...
KPMG strikes deal in tax shelter probe
You know that the criminalization of business in the post-Enron era has become routine when it's newsworthy that the government has decided not to use its prosecutorial power to prompt another Arthur Andersen-type meltdown of a major accounting firm. This...
George Melloan gets it
A couple of months ago, this post noted Wall Street Journal columnist George Melloan's op-ed on the Supreme Court's Andersen decision in which he harshly criticized the government's abuse of the rule of law to pursue currently unpopular businesspeople. Today,...
Plaintiffs in Enron class action plaintiffs turn up the heat on Merrill Lynch
Assuming that you have not already been chloroformed by the recent discussion of the Nigerian Barge criminal case, this AP story reports on a development last week that tees up Merrill Lynch's involvement in that transaction where it ought to...
Is Berkshire becoming a target?
This NY Times article reports that Berkshire Hathaway Inc. has disclosed that government authorities are probing at least one of the company's insurance subsidiaries other than General Reinsurance Corp. over accounting of "finite risk" reinsurance transactions. Here are the previous...
Heat turned up a notch on Milberg Weiss
This Wall Street Journal ($) article reports that federal investigators have turned up the pressure in its investigation of several prominent plaintiffs class action securities lawyers at the former Milberg, Weiss law firm, including granting immunity to a former Milberg...
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...
"Busted for Yoga"
Ellen Podgor has the blog title of the day in this post on the extension of Martha Stewart's home confinement over at the White Collar Crime Law Prof blog. Money quote: "We should all feel safer knowing that Martha will...
The legal cost of avoiding an Enronesque experience
Following on this earlier post that addressed the hard-nosed approach that Allied Capital Corporation has taken in attempting to avoid an Enronesque meltdown in the face of an ongoing criminal investigation, this Washington Post article notes that Allied Capital's approach...
Discussing the Merrill Lynch defendants' Nigerian Barge appeal
This post earlier in the week on the appeal of the Merrill Lynch defendants in the Enron-related Nigerian Barge case generated quite a bit of traffic and some interesting responses from around the blogosphere. First, Larry Ribstein complimented the post...
Dynegy continues restructuring plan with big asset sale
Houston-based Dynegy, Inc. announced yesterday that it had agreed to sell its natural-gas-processing business for $2.48 billion to Houston-based Targa Resources Inc., the energy company that private-equity firm Warburg Pincus LLC founded. As a part of the deal, Targa Resources...
CIBC puts Enron class action settlement amount over the WorldCom record
Canadian Imperial Bank of Commerce announced today that it has agreed to pay $2.4 billion to settle the class action securities litigation against the bank arising out of the demise of Enron Corp. in late 2001. The CIBC settlement is...
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...
Kinder Morgan's big Canadian deal
Houston-based pipeline operator Kinder Morgan Inc. announced a big bet Monday on the development of the Western Canadian oilfields -- the purchase of Vancouver-based Terasen Inc. for $3.1 billion in stock and cash and the assumption of $2.5 billion in...
The Chron interviews outgoing Enron Task Force Director
The Chronicle's Mary Flood, who has done a fine job of covering the Enron case for the local newspaper, interviews Andrew Weissmann, the former Enron Task Force director who resigned as director of the Task Force this past week amidst...
The sad case of Daniel Bayly
Daniel Bayly has had an impeccable professional career. A 30 year veteran of the executive ranks of Merrill Lynch, Mr. Bayly joined Merrill in 1972 as an associate in New York and rose through the ranks to become a managing...
How to avoid an Enronesque experience
This earlier post that compares American International Group, Inc.'s business model to that of Enron Corp. makes an important point about the true reason that Enron collapsed. The general public's perception -- fueled by the Enron Task Force and most...
Epstein on judicial activism
Richard A. Epstein is the James Parker Hall Distinguished Service Professor of Law at the University of Chicago, and the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution. In this Wall Street Journal ($) 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...
That's one helluva hangover
With Enron and other business scandals, it's been a bit difficult to keep up with the ongoing grand jury investigation in Boston into whether mutual fund employees improperly accepted gifts or entertainment from brokers. Fidelity Investments has already disciplined 16...
More on the criminal investigation of Milberg Weiss
This New York Sunday Times article provides the most detailed report to date on the three-year investigation into whether prominent class action securities plaintiffs lawyers -- William Lerach and Melvin I. Weiss -- and their former New York law firm...
More on the Enron Broadband trial closing arguments
Following on this post from earlier this week on the closing arguments in the Enron Broadband trial, a Clear Thinkers reader offered the comments below on the closing arguments, a transcript of which is downloadable here (the pdf file is...
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...
Final arguments in Enron Broadband trial
The Chronicle's Mary Flood -- who has done a fine job as the Chron's primary reporter on both the Enron-related Nigerian Barge trial and the ongoing Enron Broadband trial -- files this report on the final arguments in the latter...
More misconduct by the Enron Task Force?
As this Chronicle article reports, the evidentiary phase of the Enron Broadband trial closed on Friday as the prosecution rested after putting on a thankfully short rebuttal case that lasted less than a day in a trial that just finished...
Lea Fastow goes home
The Chronicle's Mary Flood reports that Lea Fastow -- who served a longer sentence under harsher conditions because of her marriage to former Enron CFO Andrew Fastow -- was released early this morning to go home from a halfway house...
Is the Lord of Regulation unhinged?
Showing an appalling lack of prosecutorial discretion that has become commonplace in this post-Enron era of criminalizing business, prosecutors from the office of New York attorney general Eliot Spitzer announced Thursday that they will re-prosecute beginning August 22nd the four...
The end is in sight in the Enron Broadband trial
After three often tortuous months, the end is finally in sight for the Enron Broadband trial, the Chronicle's Mary Flood reports today. The last of the five defendants to testify -- former Enron Broadband Services CFO, Kevin Howard -- took...
Update on Enron's Dabhol power plant
One of the enduring symbols of Enron Corp.'s failed foreign business investments was its investment in the Dabhol Power Plant on the Maharashtra coast approximately 150 miles south of Mumbai. When it first began producing power in the late 1990s,...
Let's see, how can we blame Enron for this?
One of the enduring myths of this era of criminalizing business practices is that Enron's energy trading policies were one of the primary causes of California's power crisis during the early part of this decade. Well, with Enron gone, that...
No fan of Lerach
In this NY Times op-ed, Joseph Nocera tees off on the lead Enron class action securities fraud plaintiffs' lawyer, William Lerach, who has his share of troubles these days (noted here and here). After noting Larry Ribstein's compliment of Mr....
Is the prosecution engaging in witness tampering in the Skilling - Lay criminal case?
I was at the Federal Courthouse yesterday for a late morning hearing and decided to stick around and pop into an early afternoon status conference in the government's biggest Enron-related criminal case -- that is, the case against former Enron...
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 $2.7 billion accounting fraud at the huge health services company. Along with the sentencings in...
The folly of mercantilism
Sebastian Mallaby joined the Washington Post editorial page in 1999 after 13 years with The Economist magazine, and is the author of The World's Banker: A Story of Failed States, Financial Crises, and the Wealth and Poverty of Nations (Penguin...
Is Lerach a target?
The dozens of securities fraud lawsuits against Enron and various other parties are consolidated under the federal multi-district litigation rules in Houston federal court. The legal community involved in those cases is abuzz today with the news that a federal...
Throwing popcorn at Enron
This NY Times article interviews Bruce A. Williamson, the former Duke Energy executive who the Dynegy, Inc. board brought in to restructure (some would say liquidate) the company following the economic fallout in the energy trading industry resulting from the...
While Theodore Sihpol goes home, William Fuhs goes to jail
Continuing relentlessly to avoid addressing the real issue, this NY Times article speculates that the problem with Eliot Spitzer's recent unsuccessful prosecution of Theodore C. Sihpol, III was not that he charged Mr. Sihpol in the first place, but that...
Criminalizing risk taking
Two columns in today's Wall Street Journal address one of the too little-discussed effects of this post-Enron era's criminalization of business -- that is, the chilling of beneficial risk-taking. In his weekly WSJ ($) column, Alan Murray examines the motives...
The effects of criminalizing auditors
This Wall Street Journal ($) article picks up on the theme of this post from late last year -- i.e., that the government's regulation of accounting firms through criminalization of their services is contributing to the shortage of accounting firms...
The increasing criminalization of business
This Wall Street Journal ($) article examines the increasing criminalization of business in the post-Enron era, which has been a frequent topic on this blog. Although the article does a reasonably good job of summarizing the troubling trend, it comes...
Observations on the Tyco verdict
The morning brings several interesting obserations regarding yesterday's guilty verdict in the trial of former Tyco International, Ltd. executives, L. Dennis Kozlowski and former Tyco finance chief Mark H. Swartz. Over at Conglomerate, Professor Hurt (a former Houstonian, by the...
Ripples from the Andersen decision reach the Bayly appeal
This post from mid-May noted former Merrill Lynch executive Daniel Bayly's motion to the Fifth Circuit Court of Appeals requesting that he remain free during the appeal of his conviction and sentence in the Enron-related Nigerian Barge case. Subsequently, the...
Local Judge News
The morning brings us news on several judges with local ties who are entering new phases of their lives. First, U.S. District Judge Ewing Werlein, Jr. announced yesterday that he would be taking senior status on December 31. Although he...
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....
First Enron Broadband defendant testifies
On the heels of the dramatic testimony that occurred late last week, this Chronicle article reports that Rex Shelby, former senior vice president of engineering and operations for Enron Broadband, yesterday became the first of the five defendants in the...
JP Morgan Chase settles Enron class action
On the heels of Citigroup's settlement last week, J.P. Morgan Chase & Co. elected to avoid the risk of being placed in the "last to settle" position that it found itself in the WorldCom class action securities fraud litigation and...
Greater Houston Partnership names new Executive Director
The Greater Houston Partnership Monday named Jeff Moseley as its new Executive Director to replace Jim Kollaer, who announced his resignation in February after 15 years in that position. Mr. Moseley is a former Denton County Judge who is currently...
A foul odor emanates from the Enron Broadband trial
Following on the heels of this post from yesterday, the slumbering Enron Broadband trial was jolted Friday as Lawrence Ciscon -- a former Enron Broadband systems engineer who the Enron Task Force has fingered as a target of its ongoing...
Citi settles Enron civil securities fraud claims
Citigroup Inc., the nation's largest financial institution, announced this morning that it has agreed to pay $2 billion to settle class-action claims over its role in the sale of Enron Corp. stock and bonds prior to the company's collapse into...
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 Enron Airline?
A sure sign that a discussion on a particular subject has deteriorated to an unrecoverable level is a participant's allegation that the other side's position defends Nazism in some respect. With regard to discussions about business, it's quickly becoming evident...
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...
Checking in on the NatWest Three
This Telegraph.com article updates the Enron-related case of the "NatWest Three," the three former National Westminster Bank PLC bankers based in London who are charged in Houston with bilking their former employer of $7.3 million in a scheme allegedly engineered...
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...
Lea Fastow released from prison
The Chronicle's Mary Flood reports that Lea Fastow -- who served a longer sentence under harsher conditions because of her marriage to former Enron CFO Andrew Fastow -- was released to a halfway house from the Federal Detention Center in...
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...
More on AIG's Enronesque experience
American International Group Inc. released its long-delayed annual report yesterday and, as expected, reported a 2.7% hit to the company's net worth along with cautionary notes about the longer-term cost that AIG is confronting as it deals with multiple governmental...
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...
The ubiquitous nature of business fraud
A couple of articles today about local business disputes reiterate the truism that, so long as humans are involved in a market economy, the risk of fraud is an essential element of virtually every transaction. In this NY Times article,...
The Lord sues AIG and Greenberg
New York AG ("Attorney General" or "Aspiring Governor," take your pick) Eliot Spitzer and the New York State Insurance Department filed a civil lawsuit today against American International Group, Inc and its two former top executives -- former CEO Maurice...
The BBC on the NatWest Three
In its inimitable style, the B.B.C. has produced a news video segment on the three U.K. bankers who have been dubbed the "NatWest Three" (earlier posts here) in the Enron case. To view the video: Go to this site. Hit...
Prosecution rests in the Enron Broadband trial
The prosecution rested Wednesday in the Enron Broadband trial, about five weeks after the beginning of the trial. Here are previous posts on the trial. The trial has been a strange one. Looking like a tap-in for the prosecution at...
Update on Enron's "NatWest Three"
One of the more interesting sidelights to the criminal investigations into Enron Corp. has been the saga of the "NatWest Three" -- David Bermingham, Gary Mulgrew and Giles Darby, the three former National Westminster Bank PLC bankers based in London...
The Chronicle makes a point about DeLay that it failed to make about Enron
A good, old-fashioned snit between Texas political opponents gave the Houston Chronicle an opportunity this week to make a good point about the rule of law and the integrity of governmental investigations. But in so doing, the Chronicle highlighted its...
Juror rebellion brewing in Enron Broadband case
As noted in this previous post, the Enron Broadband trial -- after some early fireworks -- has really turned into a snoozer. And, according to this Chronicle article, the jurors are close to open rebellion: Initially, lawyers for both sides...
Perelman hammers Morgan Stanley
Based on the developments related in this previous post, it's not particularly surprising that a Florida jury awarded billionaire financier and Revlon, Inc. chairman Ronald Perelman $604.3 million against Morgan Stanley on his claims that Morgan defrauded him when he...
U.S. Attorney calls it quits
Michael Shelby, the U.S. Attorney for the Southern District of Texas for the past three and a half years, announced his resignation today to enter private practice. The U.S. Attorney's position in Houston has been a revolving door for years....
Would you please pass the coffee?
This earlier post noted that, after some early sparks, the ongoing criminal trial of the Enron Broadband case has not exactly been a toe-tapper. In that regard, the Wall Street Journal passes along the following exchange that took place earlier...
SEC lawyer who headed Enron investigation named Enforcement Division chief
The Securities and Exchange Commission lawyer who headed the agency's investigation into Enron Corporation has been named to head its enforcement division. Here is the SEC's press release on the appointment. Linda Chatman Thomsen, 50, will be the first woman...
More Nigerian Barge sentencings
The two remaining unsentenced former Merrill Lynch executives and the only Enron executive convicted of fraud and conspiracy in the Enron-related criminal trial known as the Nigerian Barge case are being sentenced today by U.S. District Judge Ewing Werlein in...
Couldn't you arrange for some false testimony or something?
After last week's fireworks in the ongoing Enron Broadband criminal trial noted here and here, the Chronicle's Mary Flood reports that the attorneys in the trial have reverted to the dubious tactic of chloroforming the jury with mind-numbing techno-jargon: On...
The Enron brand
One of the remarkable cultural developments since the collapse of Enron Corporation has been the branding of the "Enron" name to become synonomous with all forms of corporate corruption. Earlier this week, the prosecution's use of the Enron brand in...
It's a tough time to be an insurer
Frustrated with the Lord of Regulation getting all the headlines recently, the Federal Bureau of Investigation announced yesterday a wide-ranging inquiry into the insurance industry that could extend into banking and other financial sectors. FBI investigators and insurance regulators from...
"You guys scare me to death"
Following this development from Monday, the Enron Task Force prosecution is now clearly in serious damage control mode in the ongoing criminal trial against five former Enron Broadband Services executives in Houston federal court. As this Mary Flood Houston Chronicle...
Checking in on the Enron Broadband trial
An interesting development occurred last Friday during the ongoing Enron Broadband trial, and the development is turning into the first genuine problem for the Enron Task Force prosecution based on Mary Flood's report of today's testimony. Here's what happened on...
It continues to get worse for AIG
Following on this progression of damaging public disclosures over the past several months, American International Group Inc. announced yesterday, as this NY Times article reports, that the company has decided to delay for a third time the publication of its...
AIG is sounding more like Enron all the time
As noted earlier here and here, there are several characteristics of the structure of American International Group Inc. that are similar to the structure of Enron Corp. In particular, both companies' business is largely dependent on its customers' trust and,...
AIG's Enronesque experience continues
As noted in this previous post, the reason that Enron crashed was that its business model required that its customers rely on the company's financial integrity and not necessarily on the company's net worth. Accordingly, when Enron's financial integrity came...
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 $65 million. The settlement occurred at the beginning of the fifth week of...
Upcoming Supreme Court argument in the Arthur Andersen case
On Wednesday of next week, the U.S. Supreme Court will hear arguments over the meaning of the law under which now defunct accounting giant Arthur Andersen was prosecuted and convicted. Previous posts are here, here, here, here, and here...
Did Skilling violate the Rule?
In what appears to be a questionable ruling, former Enron CEO and COO Jeff Skilling was required to leave the courtroom on Friday morning during the ongoing trial of the Enron Broadband trial. Normally, at the commencement of most trials,...
Lay's team heaves a sigh of relief
U.S. District Judge Sim Lake ruled Thursday afternoon that bank-fraud charges against Enron former chairman and CEO Ken Lay would be tried to him without a jury early next year immediately following the multi-defendant conspiracy jury trial against Mr. Lay,...
A masterful performance
Inasmuch as I had to appear at an hearing in federal court early this morning, I stuck around after my hearing to attend the sentencing hearing of former Merrill Lynch executive Daniel Bayly in connection with the Enron Nigerian Barge...
More on sentencing run amok
Following on the heels of this post from last week on the sentencing hearing tomorrow in U.S. District Judge Ewing Werlein's court in regard to two defendants in the Enron-related Nigerian Barge case, developments in another case this past week...
The Lord of Regulation's abuse of power
In this Wall Street Journal ($) op-ed, Chief Executive magazine editor William J. Holstein addresses a common theme of this blog -- namely, the dubious motives and methods behind New York AG ("Attorney General" or "Aspiring Governor," take your pick)...
The Enron Broadband Trial
Almost three and a half years after Enron collapsed into bankruptcy, the first criminal trial involving exclusively former Enron executives will crank up in front of U.S. District Judge Vanessa Gilmore in Houston federal court on Monday. Here is the...
Sentencing run amok
The Chronicle's Mary Flood reports today on recent developments in the Enron-related Nigerian Barge case, in which four former Merrill Lynch executives and one former Enron executive are awaiting sentencing after being convicted last year of wire fraud and conspiracy...
Dynegy settles class action claims
Former Enron suitor Dynegy Inc. has agreed to pay $468 million to settle a class action suit that accused the Houston-based company and several of its former officers and directors of conspiring to cook the company's books to mislead investors....
Lay's response to government's quick trial request
The gamesmanship continues in the battle between the Enron Task Force and former Enron chairman and CEO Ken Lay over when and how to handle the trial of the government's bank fraud charges against Mr. Lay. Prior posts on this...
Justice Department's brief in Arthur Andersen appeal
Here is the Justice Department's brief in Arthur Andersen's appeal to the U.S. Supreme Court of its criminal conviction of witness tampering in connection with its destruction of Enron Corp.-related documents during the latter stages of that company's collapse in...
The Lord of Regulation chats with the Oracle of Omaha
Let's review the landscape of regulating business for a moment. Various former executives of disgraced and insolvent Enron Corp. are under indictment for using structured finance transactions that independent lawyers and accountants approved to mislead investors regarding Enron's true financial...
Lawyers, bring your schedules
Coming on the heels of this earlier post on the Enron Task Force's use of Ken Lay's prior public statements to move for an early trial on the pending bank fraud charges pending against him, Mary Flood of the Chronicle...
Enron-AIG-Berkshire: Regulating earnings management
Don't miss Wall Street Journal ($) columnist Holman Jenkins' Business World piece today. In analyzing the Lord of Regulation's assault on American International Group, Inc. and its long history of being rewarded by the market for its adroit management of...
The Lord of Regulation moves the market
In an effort to calm the harried investors in his latest target, American International Group Inc., New York AG ("Aspiring Governor") the reigning Lord of Regulation Eliot Spitzer announced yesterday that his office expects to reach a civil settlement with...
The Enron law of unintended consequences
Remember that motion that former Enron chairman and CEO Ken Lay filed last fall in which he requested a separate trial from his Enron co-defendants Jeff Skilling and Richard Causey? You know, the one in which U.S. District Judge Sim...
Is it possible to dissolve a governmental agency?
This Chronicle article reports on the brewing controversy over whether the Harris County-Houston Sports Authority -- the quasi-governmental agency created to coordinate the construction of Houston's Minute Maid Park, Reliant Stadium and Toyota Center -- should be dissolved because its...
Chronicle wins prestigious award for Enron coverage
Kevin Whited at blogHouston.net notes that the Houston Chronicle has been awarded a prestigious business writing prize from the Society of American Business Editors and Writers in the Breaking News category for its coverage of the indictment of former Enron...
Absolutely Enronesque
In the most stunning in a series of revelations that has rocked the U.S. business community, American International Group Inc. admitted yesterday to numerous and substantial accounting irregularities that could reduce its net worth by over $1.75 billion. Moreover, the...
JPMorgan Chase wins a key decision in Enron-related litigation
Only a week after agreeing to an embarrassing $2 billion settlement arising from its role as an underwriter of WorldCom bonds, JPMorgan Chase got some good news yesterday in a securities fraud case arising from its somewhat different dealings with...
Big news for Houston law firms
A couple of interesting news items popped up yesterday in regard to the Houston legal community. First, venerable Houston-based law firm Bracewell & Patterson announced that Rudolph W. Giuliani, the former mayor of New York and former U.S. Attorney for...
Meanwhile, the Enron investigation goes on and on and on
This Mary Flood Houston Chronicle article reports that a second grand jury has been empaneled to replace the original federal grand jury that has been investigating the Enron scandal for the past three years. According to Ms. Flood, Enron Task...
The Lord of Regulation demands even more from AIG
In what is becoming a typical development in such sagas, this NY Times article reports that the board of financial services giant American International Group Inc. is considering a move to restate its financial statments as a result of suspected...
The Schiavo case
A number of friends have asked me why I have not blogged on the Terri Schiavo case, to which I have stolen Eugene Volokh's reply that "I know nothing about the Schiavo matter, and -- despite that -- have no...
Well, at least it's playing close by
The Chron's Mary Flood reports today that the documentary Enron, The Smartests Guys in the Room (earlier post here) will open in Houston on April 20 at the River Oaks Theatre, just down the street from where Ken Lay, Jeff...
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...
More on "Conspiracy of Fools"
Following this earlier excerpt, The New York Sunday Times is running this second excerpt from Kurt Eichenwald's new book on the Enron scandal, Conspiracy of Fools. I am about halfway through Conspiracy of Fools and it is excellent. With more...
McGuire's sleight of hand
Legal issues involving public figures often have a public-relations dimension as well as a political angle, and this past week's Congressional testimony of Mark McGuire regarding Major League Baseball's steroids scandal is a case in point. The key legal issue...
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...
Outside directors' liability
Bernard S. Black, a University of Texas Law School professor, contributed to this timely article that summarizes the landscape of outside directors' liability to investor lawsuits in the wake of the recent Enron and WorldCom directors' settlements. The article nicely...
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...
Meanwhile, over at AIG and Berkshire . . .
And while the business and legal worlds focus on the implications of the Ebbers conviction, this NY Times article reports on the uneasiness at Berkshire Hathaway as New York Attorney General Eliot Spitzer carves another notch in his anti-business...
The "honest idiot" defense fails
Bernie Ebbers' honest idiot defense fails as he is convicted on all counts. The conviction is further bad news for former Enron chairman Ken Lay and former CEO Jeff Skilling who are claiming -- as did Mr. Ebbers -- that...
First excerpt from "Conspiracy of Fools"
This NY Sunday Times article provides the first excerpt from Kurt Eichenwald's new book about the collapse of Enron Corp. -- Conspiracy of Fools -- that was the subject of this earlier post. The entire excerpt is well worth reading,...
Small PUD's anti-Enron P.R. campaign appears to working
This earlier post told the story of the Snohomish County Public Utility District, which is riding an unparalleled wave of popularity among its customers despite hiking electricity rates 50 percent in the past four years and disconnecting a record number...
More courthouse steps settlements in WorldCom class action
Deutsche Bank AG, German bank WestLB AG and Italian bank Caboto Holding Sim joined most of the other financial institution-defendants in the WorldCom class action yesterday in agreeing to settle fraud allegations for their participation in the sale of WorldCom...
Texas Pacific's purchase of Enron Oregon utility scuttled
The Oregon Public Utility Commission announced Thursday that it had decided not to approve Texas Pacific Group's proposed $2.35 billion purchase of Enron subsidiary Portland General Electric because "the potential harms or risks to PGE customers from the deal outweigh...
Enron-related developments
The Chronicle's Mary Flood, who continues to do a bang up job of keeping up with the unfolding events relating to the various aspects of the Enron scandal, has a couple of Enron-related news items today. First, she reports that...
Warren Buffet's annual letter to shareholders
Uber-investor Warren Buffett's 2004 performance letter to Berkshire Hathaway, Inc's shareholders was published over the weekend. While citing such diverse characters as W.C. Fields and Jesus Christ, Mr. Buffett accepted blame for a drop in Berkshire's 2004 earnings. Here is...
B of A settles in WorldCom class action
In two weeks, the trial cranks up of claims by investors and creditors who lost billions in the WorldCom accounting scandal against WorldCom's former underwriters, outside directors, and Arthur Andersen. Consequently, over the next several weeks, there will probably be...
Enron saga turns Grisham
This Weekend Advisor column in the Wall Street Journal ($) 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...
A small utility's $122 million anti-Enron P.R. campaign
Despite hiking electricity rates 50 percent in the past four years and disconnecting a record number of customers for failure to pay bills, a Seattle area, publicly-owned utility has become a West Coast hero for, as this Washington Post article...
Feds start investigating Krispy Kreme
A couple of weeks ago it was the sale of the corporate jet. This week it's a federal criminal investigation as formerly high-flying retail doughnut franchisor Krispy Kreme Doughnuts, Inc. moved a step closer to what appears to be an...
Lay-Skilling criminal trial will start in January 2006
Mary Flood of the Houston Chronicle is reporting that U.S. District Judge Sim Lake has scheduled the criminal trial of former Enron chairman Ken Lay, former CEO Jeff Skilling, and former head accountant Richard Causey to begin on January 17,...
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...
Lea Fastow's motion to reduce sentence is denied
The Chronicle's Mary Flood, who continues to do a fine job of covering the Enron scandal, posted this article today regarding U.S. District Judge David Hittner's denial of Lea Fastow's motion to reduce her one year sentence for misdemeanor tax...
Bad Bankruptcy
Following this post from last week, the Senate Judiciary Committee approved bankruptcy "reform" legislation on Thursday that imprudently makes it harder and more expensive for people to discharge their personal liability for substantial debts in bankruptcy. Given Congress' Republican majorities,...
A lawyer you will be hearing about in the Enron case soon
This NY Times article profiles Reid Weingarten, the Washington, D.C.-based criminal defense attorney who is currently representing former WorldCom CEO Bernard Ebbers in his criminal trial. Mr. Weingarten is also representing former Enron chief accountant Richard Causey in his criminal...
NatWest bankers caught in Enron web try to stay in England
David Bermingham, Gary Mulgrew and Giles Darby -- the three former NatWest investment bankers facing possible extradition to the United States in connection with Enron-related fraud charges -- are floating an unusual and creative legal strategy in England that amounts...
Spitzer takes dead aim at AIG
New York AG (meaning either "attorney general" or "aspiring governor") Eliot Spitzer and the Securities and Exchange Commission issued subpoenas yesterday to American International Group Inc. in connection with investigations into AIG's earnings management techniques relating to certain types of...
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...
Courting Failure
This may seem a bit odd coming on the heels of the previous post, but UCLA law professor Lynn LoPucki's long-awaited new book -- Courting Failure : How Competition for Big Cases Is Corrupting the Bankruptcy Courts (UM Press 2005)...
Indicted Duke trader cops plea bargain
Brian Lavielle, one of three former Duke Energy Corp. natural gas traders who were indicted last April for booking phony trades to increase bonus compensation, pleaded guilty in Houston Thursday to falsifying books and agreed to cooperate in the federal...
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...
A hopeful sign in the Enron Nigerian Barge case?
Yesterday brought perhaps the first sign that a more measured approach to sentencing in white collar criminal cases may be in the offing since the current trend of criminalizing questionable business transactions began with the meltdown of Enron in late...
More clear thinking on reforming corporate governance
Following on a thread that involved earlier posts here and here, Professor Ribstein expands in this post on his proposal for reforming corporate governance: My solution to the problems of corporate governance is to put pressure on managers to distribute...
Juror Questionnaire in the Enron Broadband case
This is the questionnaire that prospective jurors in the upcoming Enron Broadband criminal trial will be given. Here are the prior posts on the Broadband case, which is scheduled to crank up on April 1 in Houston before U.S. District...
Least surprising motion of 2004 denied
U.S. District Court Sim Lake (picture here) today issued an order denying former Enron Corp. CEO and COO Jeffrey Skilling, former Enron Chairman Kenneth Lay and former Enron Chief Accounting Officer Richard Causey's motion to transfer venue of their upcoming...
Enron, the documentary
As noted several times on this blog, the most popular book on the Enron affair to date has been the one written by Fortune reporters Bethany McLean and Peter Elkind, Smartest Guys in the Room: The Amazing Rise and Scandalous...
Why hasn't the Disney-Ovitz case settled?
Given the high stakes of the ongoing Disney-Ovitz trial, a reader asks Professor Ribstein that question, and the Professor speculates that the reason is the importance of the case. Having been involved in similar high stakes cases, that's certainly one...
Enron bankruptcy CEO takes over at Krispy Kreme
Krispy Kreme Doughnuts Inc. took a big step closer to chapter 11 today as it announced that its chairman and chief executive, Scott A. Livengood, retired and that turnaround expert and current Enron CEO, Stephen F. Cooper, was named CEO...
Harvard Prof not impressed with Enron directors' settlement
Lucian Bebchuk is a professor at Harvard Law School and a co-author of Pay Without Performance: The Unfulfilled Promise of Executive Compensation. In this NY Times op-ed, Professor Bebchuk takes dead aim at the recent Enron directors' settlement and he...
Criminalizing greed, dishonesty, and mendacity
Last week, I received the following email from a reader who was responding to this earlier post: You had this comment on your website, today. "In what alternative reality is it that a busy law dean and expert on ethics...
Looking upstream and downstream in prosecuting accounting fraud
This this NY Times article reported last week that nine executives from a several food supply companies have been charged with crimes for their part in a revenue pumping scheme at U.S. Foodservice, a subsidiary of the Dutch company Royal...
The lagging reform movement in corporate governance
The NY Times' Kurt Eichenwald, who has been covering the Enron scandal and other post-Dotcom business busts over the past several years, reviews in this NY times article the current status of the lagging government reform movement in regard to...
Texas Pacific Group paddling upstream on Portland General Electric acquisition
This post from a couple of weeks ago noted this WSJ profile on Texas Pacific Group, the Fort Worth-based investment fund founded by former bankruptcy lawyer David Bonderman and business whiz Jim Coulter in 1993. Well, it appears that TPG...
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"...
Ken Lay promotes his website
The Houston Chronicle's main Enron reporter -- Mary Flood -- weighs in today with this piece on how former Enron chairman and CEO Kenneth Lay is using sponsored links to direct websurfers to his website. Sponsored links appear prominently in...
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...
WorldCom outside directors settlement
10 of the 12 former outside directors of WorldCom Inc. have agreed in principle to pay $18 million out of their own pockets as a part of a $54 million settlement of the class-action lawsuit that WorldCom bondholders and shareholders...
The WSJ on the case against Ken Lay
This John R. Emshwiller and Rebecca Smith Wall Street Journal ($) article provides an overview of the Justice Department's criminal case against former Enron chairman and CEO, Ken Lay. Mr. Emshwiller and Ms. Smith have been covering the Enron scandal...
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...
Judge Gilmore to instruct jury on Justice Dept. refusal to disclose death penalty analysis
Following on the matters addressed in this earlier post, U.S. District Judge Vanessa Gilmore ruled on Thursday that she will instruct the jury regarding the government's failure to comply with her prior order to disclose the basis of its decision...
WSJ profiles the Texas Pacific Group
This Wall Street Journal ($) article profiles the Texas Pacific Group, the Fort Worth-based investment fund founded by former bankruptcy lawyer David Bonderman and business whiz Jim Coulter in 1993. Originally established to invest in and restructure Continental Airlines to...
Criminalizing auditors out of business
As a part of a management shakeup, Fannie Mae decided late last week to fire KPMG LLP as its outside auditor after 35 years of service because its financial statements from 2001 through mid-2004 can "no longer should be relied...
Mistrial declared in trial of former Westar CEO
Although overshadowed by the Enron-related criminal cases, the business fraud criminal trial of former Westar Energy, Inc. CEO David Wittig and his right hand man has been making quite a bit of news over the past few months in Kansas....
The corporate case of the decade
This NY Times article mostly misses the point about the key issues arising from the ongoing civil trial over the Walt Disney Co. board's decision to pay Michael Ovitz a rather generous severance package for essentially doing nothing during his...
Fifth Circuit upholds vague Commodity Exchange Act reporting law
The Fifth Circuit Court of Appeals in New Orleans issued this decision on Friday in the case of former Dynegy trader Michelle Valencia that upholds a controversial law that the Justice Department has used to charge a group of Houston...
Is the worm turning on Bush Administration policies toward business?
In his Wall Street Journal ($) Political Capital column today, Alan Murray reports that certain business interests that supported President Bush's re-election are conducting a quiet campaign to persuade the White House to dump Securities and Exchange Commission chairman, William...
Remember Martin Frankel?
Given the federal government's increasing propensity to regulate business through criminalizing questionable business transactions, it's easy to overlook the instances where the criminal justice system actually punishes a real bonafide business crook. Martin Frankel was a small-time New York money...
Global Crossing case drawing to a close
The Securities and Exchange Commission is expected to fine at least three former executives of Global Crossing Ltd., the fiber-optic company that went bust in the business downtown earlier this decade. The fine on the executives -- including the company's...
That's one helluva conspiracy
The Enron-related criminal cases just seem to get more bizarre by the day. This Chronicle article reports that the Enron Task Force has named 114 unindicted co-conspirators in the Task Force's criminal case against former Enron executives Ken Lay, Jeffrey...
Ken Lay's lawyer hammers the Chronicle and the Enron Task Force
The public relations contest that the Enron case has become continued today. In this Chronicle op-ed, Mike Ramsey -- former Enron chairman and CEO Kenneth Lay's criminal defense attorney -- levels a blast at the Chronicle for adhering to the...
Krispy Kreme = Boston Market
This Floyd Norris' NY Times column does a nice job of explaining the developing debacle of Krispy Kreme, the share price of which peaked at $49.74 in the summer of 2003, but which has fallen as low as $9.35 recently....
An annuity for auditors
Don't miss Holman Jenkins, Jr.'s Business World column this week in the Wall Street Journal ($) in which he reviews the rather remarkable effects of the Sarbanes-Oxley legislation, which was Congress' knee-jerk public relations reaction to the WorldCom and Enron...
A new form of business regulation
Don't miss George Mason University law and economics whiz Henry G. Manne's brilliant Wall Street Journal ($) op-ed from yesterday in which he criticizes Eliot Spitzer's latest assault on business. Dean Manne cuts through the fog of Spitzer's public relations...
Enron pipeline sales close
Enron Corp.'s liquidating chapter 11 plan accelerated on Wednesday when the company closed the $2 billion sale of its prized remaining assets -- its interest in three natural gas pipelines. Enron's Bankruptcy Court approved the sale in September of Enron's...
Enron's legal tab
This Atlanta Constitution-Journal (free registration required) article takes the first stab at an issue that deserves more scrutiny -- the nearly $1 billion legal fee tab that the attorneys involved in the Enron chapter 11 case are charging the estate...
Enron Task Force targets Linda Lay
Enron Task Force prosecutors are investigating whether Linda Lay, the wife of Enron's former Chairman and CEO, Kenneth L. Lay, engaged in illegal insider trading by selling Enron stock days before Enron filed its chapter 11 case on December 2,...
That's sure not Led Zeppelin
When I moved to Houston over 33 years ago as a young college student, 101.1 KLOL-FM was the rock station to listen to "heavy" rock music as opposed to the "bubblegum" rock music that my little sisters enjoyed. KLOL was...
Nigerian Barge jury finds $13.7 million market loss
The jury in the Enron-related criminal trial known as the Nigerian Barge case concluded the market loss hearing by determining today that the sham barge sale that was at the center of the trial cost Enron shareholders $13.7 million. In...
The least surprising motion of the year
In an expected move, former Enron Corp. CEO and COO Jeffrey Skilling, former Enron Chairman Kenneth Lay and former Chief Accounting Officer Richard Causey filed a motion Monday stating that Phoenix, Denver or Atlanta would be fairer places in which...
Dan Cogdell profiled
After winning the only acquittal for any of the defendants in the Enron-related Nigerian Barge trial, Houston-based defense attorney Dan Cogdell is profiled in this Houston Chronicle article. Cogdell did a magnificent job in the trial and clearly was the...
The Nigerian Barge market loss hearing
After convicting four former Merrill Lynch executives and a former Enron executive of wire fraud and conspiracy charges yesterday, the jurors in the Enron-related trial known as the Nigerian Barge case heard from opposing expert witnesses today regarding the market...
Nigerian Barge Jury convicts five out of six defendants
The federal jury in the Enron-related criminal case known as the Nigerian Barge case acquitted a former Enron accountant today and found her five co-defendants guilty of wire fraud and conspiracy charges. The jury cleared former Enron accountant Sheila Kahanek...
Dynegy agrees to buy energy plants
Houston-based Dynegy Inc. has entered into an agreement to purchase from Exelon Corp. all of the outstanding shares of ExRes SHC Inc. Through the acquisition, Dynegy will acquire a 1,042-megawatt, 7,211-Btu heat rate, combined-cycle independence power generation facility near Scriba,...
Enron's mismanagement of trust
R. Preston McAfee is the J. Stanley Johnson Professor at the California Institute of Technology and formerly held the Murray S. Johnson Chair at the University of Texas at Austin. In this concise and insightful article for The Economists’ Voice...
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...
Nigerian Barge case goes to the jury
Final arguments ended today in the Enron-related criminal trial of four former Merrill Lynch executives and two former mid-level Enron executives in what has become known as the Nigerian Barge trial. Earlier posts on the trial may be reviewed here,...
Checking in again on the Nigerian Barge trial
The first Enron-related criminal trial -- the mess known as the Nigerian Barge trial (previous trial posts here, here, and here) -- will conclude its evidentiary phase today and U.S. District Judge Ewing Werlein will complete the charge to the...
WaPo on Justice's Corporate Task Force
This Washington Post article does a decent job of reviewing the work over the past two years of the Justice Department's Corporate Task Force that was created as a result of the meltdown of Enron Corp....
Lay's bid for a separate trial backfires
U.S. District Judge Sim Lake >ruled unexpectedly on Tuesday that former Enron Chairman and CEO Ken Lay will face two separate criminal trials -- one with former Enron CEO Jeff Skilling and former chief Enron accountant Richard Causey, and another...
The Birthplace of Bush Paranoia
Several months ago, Professor Ribstein commented on the phenomena in this election of Bush-bashing, which the Professor observed is premised on "an assumption that Bush and his supporters are not credible -- that they are all idiots or worse." Along...
Enron-related extradition of British bankers approved
A British judge ruled Friday that three British bankers indicted in the U.S. on Enron-related fraud charges could be extradited to stand trial in Texas. Here is a prior post that reports on the background of this case leading up...
Checking in again on the Nigerian Barge trial
The defendants began putting on their cases this week in the Enron-related Nigerian Barge trial in Houston federal court, and already there have been some significant developments. Attorneys for defendants and former Merrill Lynch executives James Brown and Daniel Bayly...
Checking in again on the Nigerian Barge trial
I was in federal court yesterday, so I had occasion to drop in again (here is my earlier report on the trial) on the ongoing Enron-related Nigerian Barge trial, which was concluding its third week. The prosecution's second star witness...
Another Enron-related plea deal
Timothy DeSpain, Enron's assistant treasurer from 1999 to 2002, was arraigned before a federal magistrate Tuesday and released on a $100,000 bond in connection with securities fraud criminal charges that he conspired with other Enron executives to present Enron's financial...
Fannie Mae Enron?
This Wall Street Journal ($) editorial examines the recent report issued by the Office of Federal Housing Enterprise Oversight (Ofheo) in regard to Fannie Mae's accounting machinations and what it found is troubling, to say the least. By improperly delaying...
"We'll Getcha & Mangle Ya"
New York-based Weil, Gotshal & Manges is a major international law firm that is particularly well-known in bankruptcy and reorganization circles. The firm is counsel for the debtors-in-possession in both the Enron and MCI/WorldCom reorganization cases, which are two of...
Stros get closer; Giants keep pace
Jeff Bagwell hit a massive two-run Crawford Street yak and the Stros overcame some jittery fielding with solid relief pitching as they remained on top of the NL Wild Card standings with a 4-2 victory over the Rockies on Friday...
Enron prosecutors pursue extradition of English bankers under U.K. terrorism law
Three former Natwest Bank bankers appeared in a London court yesterday to fight extradition to the United States, where they are facing fraud charges in connection with a deal with Enron Corp. Natwest bankers David Bermingham, Giles Darby and Gary...
Checking in on the Nigerian Barge trial
I had a hearing on Monday afternoon in federal court, so I went a bit early and sat in on the ongoing trial of the first Enron-related criminal case to go to trial -- the Nigerian Barge case. Today was...
Lehman Brothers settling Enron claims
The Wall Street Journal ($) is reporting today that brokerage house Lehman Brothers Holdings Inc. is close to a $220 million settlement to resolve a class-action lawsuit alleging that it and other big brokerage firms participated in a scheme with...
New plan for the Astrodome
With the construction of the Juice Box and Reliant Stadium, one of the local political footballs that is lobbed around Houston from time to time is the following issue: What should we do with the Astrodome? The local sports and...
Charlie Beckham named chairman of the State Bar Bankruptcy Law Section
Charles A. ("Charlie") Beckham Jr., a partner with Haynes and Boone LLP in Houston, has been elected as chair of the bankruptcy law section for the State Bar of Texas for a term running through June 2006. Deborah D. Williamson,...
San Diego public financing emulates Enron
This post from earlier this year pointed out the similarity between the federal government's accounting and financing of Medicare and Social Security benefits with Enron's accounting and financing of its infamous off-balance sheet partnerships. This NY Times article reports that...
Are you ready to rumble? -- First Enron criminal trial begins Monday
After three years from Enron Corp.'s demise into bankruptcy, dozens of indictments and plea bargains, and an unprecendented government and media campaign to demonize former Enron executives, the first criminal trial against former Enron executives will begin Monday in Houston...
Did TXU commit securities fraud?
This Texas Observer article provides an interesting analysis on how Dallas-based TXU Corp dealt with the carnage in the energy industry resulting from the demise of Enron Corp....
The prospects for real Social Security reform
In his weekly Business World column today, the Wall Street Journal's ($) Holman Jenkins, Jr. lays out the case that a second Bush Administration may be the one time that realistic reform of Social Security could actually take place: People...
Merrill Lynch invests in energy trading business
This NY Times article reports that Merrill Lynch & Co. jumped back into the energy-trading business with an agreement to buy Entergy-Koch, LP -- the Houston-based joint-venture trading unit of Entergy Corp. and closely held Koch Industries -- for an...
Enron's feed trough
The Wall Street Journal ($) is reporting that Stephen F. Cooper, the independent chief executive officer of Enron Corp. during its chapter 11 case, is preparing to request approval of a $25 million bonus for his and his firm's (Kroll...
Another trial in an Enron criminal case gets pushed back
Remarkably, almost three years after Enron's descent into bankruptcy amid wide-ranging allegations of corporate fraud, the Enron Task Force still has not taken a criminal indictment against a former Enron executive to trial. And one of the first Enron-related criminal...
Enron finalizes pipeline deal
Enron Corp. agreed to sell its CrossCountry Energy business to a venture of Southern UnionCo. and a General Electric Co. unit in a deal the companies valued at $2.45 billion. CrossCountry Energy holds Enron's interests in three domestic natural-gas pipelines...
Ken Lay's Washington Post op-ed
In this Washington Post op-ed, former Enron chairman and chief executive officer Kenneth Lay makes the following disclosure and asks a very reasonable question: At my request, my lawyers have filed motions in federal court asking for an immediate and...
The Enron noose tightens
The Government's noose around neck of Jeffrey Skilling and Kenneth Lay got a bit tighter today as Kevin P. Hannon, former chief operating officer of Enron Corp.'s heavily promoted telecommunications unit, became the latest former Enron executive to plead guilty...
Bank of NY tees off on Citigroup over Enron-related instruments
This Wall Street Journal ($) article reports that Bank of New York Co. sued Citigroup Inc. earlier this week over the sale of financial instruments related to Enron Corp. The lawsuit could involve as much as $2.5 billion in liability...
Another Enron plea deal
Mark Koenig, the former head of Enron's investor relations section, agreed to a plea bargain today with the Enron Task Force in regard to newly-filed criminal charges against him, and agreed with the Securities and Exchange Commission to pay civil...
Skilling and Causey request separate trials
As expected, former Enron CEO Jeffrey Skilling and chief accountant Richard Causey filed motions with the U.S. District Court in Houston Friday requesting that their pending criminal case be severed for separate trials. Their motions mirrored a similar motion that...
Enron cases are different
You know that the criminal cases related to the demise of Enron Corp. are a different breed of cat when articles such as this appear in the Houston Chronicle explaining what former Enron chairman Kenneth Lay and former Enron CEO...
Update on the sad case of Jamie Olis
David Gerger, appellate counsel for former Dynegy finance employee Jamie Olis filed Mr. Olis' appellant's brief with the Fifth Circuit Court of Appeals this week in which Mr. Gerger contends that Mr. Olis' conviction and 24-year prison sentence should be...
Is Ken Lay a criminal?
William Anderson is an economics professor at Frostburg State University and an adjunct scholar at the Mises Institute. Here is an earlier post in which Professor Anderson challenged the reasoning behind an indictment earlier this year of several former executives...
The importance of good timing in going bust
This NY Times article provides a fine report on the demise of Global Crossing, Ltd., the telecommunications company that went down under suspicious circumstances at the same time as Enron Corp. was cratering. However, unlike Enron, the Justice Department established...
Lay's proposed September trial date denied
U.S. District Judge Sim Lake denied former Enron Chairman and CEO Kenneth Lay's motion for a September trial date during a hearing on Wednesday, but agreed that Lay was entitled to a quick trial. Judge Lake did not set a...
Nigerian Barge case postponed again
The Enron Task Force's recent decision to re-indict the defendants in the Enron-related Nigerian Barge case has caused another postponement of the trial in that case. The trial, which was scheduled to begin on either August 16 or 17th, has...
Ken Lay presses for a speedy trial
In an astounding move in a case of nearly unprecedented negative publicity, Ex-Enron Chairman and CEO Kenneth Lay requested U.S. District Judge Sim Lake today to grant a speedy trial -- even possibly waving a jury trial to get it...
The politics of academia addresses a knotty Enron issue
It's always interesting to watch the machinations that occur whenever academics must address a conflict between their academic principles and the devilish necessity of money. This Houston Chronicle story picks up on this earlier article concerning the University of Missouri-Columbia's...
The ongoing cost of public financing of sports stadiums
In an effort to persuade Moody's investment rating agency from downgrading its bonds to junk status, the Harris County Sports Authority voted to issue $37.2 million in new bonds this week to cover the ongoing cost financing the building of...
Enron trader cops plea
John Forney, former manager of Enron Corp.'s online trading desk, pleaded guilty today to charges in California that he manipulated energy markets during California's power crisis. Mr. Forney, who is 42, is the third Enron executive to plead guilty to...
Enron goes nuclear on the PBGC
Enron Corp. has forcefully asked the New York Bankruptcy Court overseeing its chapter 11 case to enjoin the Pension Benefit Guaranty Corp.'s lawsuit in Houston to take over four of Enron's retirement plans. In pleadings filed Wednesday, Enron accused the...
Chuck Watson settles with Dynegy
Dynegy founder and former chief executive officer Chuck Watson and his chief operating officer -- Steve Bergstrom -- will receive a combined $32 million in severance payments under a settlement of their severance claims with the company. Mr. Watson will...
Criminalizing business
Gil Weinrich has a piece at TCS Central that proposes a different approach to punishment of corporate wrongdoers: Our society does a poor job of penalizing [corporate] crime. . . In the white-collar arena, the unrequited losses endured by victims...
The cost of having an Enron-related deal tried to a jury rather than a judge
An English court yesterday provided a glimpse of the difference between the civil justice there and the American system as it relates to controversial business practices such as those that Enron Corporation practiced. In this decision handed down by an...
Blakely Redux
With strong prompting from the Justice Department, the issues regarding the validity of federal and state sentencing guidelines generated by the U.S. Supreme Court's recent Blakely v. Washington decision are going to be teed up again soon in the Supreme...
Enron Broadband defendant pleads guilty
Ken Rice, the former head of Enron’s broadband Internet business, became the 11th person to plead guilty to an Enron-related crime when he admitted to a single count of securities fraud this morning before U.S. District Judge Vanessa Gilmore in...
Enron objects to employee settlement
Setting up a potential jurisdictional battle between two federal courts, Enron Corp. filed an objection in U.S. Bankruptcy Court in Manhattan yesterday seeking to block a settlement payment of the $85 million in insurance proceeds to approximately 20,000 current and...
Mike Ramsey interviewed
Following on this earlier Wall Street Journal ($) profile, Mary Flood, who has been covering the Enron case for the Houston Chronicle, interviews Mike Ramsey, lead criminal defense attorney for Kenneth Lay, in today's Chronicle. Not much of Mr. Ramsey's...
Enron Task Force PR staff fights back
The unusual nature of Ken Lay's somewhat desperate public relations campaign in connection with the criminal charges that are pending against him has been noted earlier here, here, and here. Not to be outdone, the Enron Task Force pumped its...
Blakely decision prompts revised Enron indictments
The U.S. Supreme Court's recent decision in Blakely v. Washington (prior posts here) -- which has called into question the Constitutionality of both state and federal sentencing guidelines -- has prompted Enron Task Force prosecutors to re-indict defendants in the...
Pettitte stops Stros skid
Andy Pettitte pitched a season-high eight innings as the Stros extended the D-Backs losing streak to 10 in a 5-2 victory on Wednesday night at the BOB in Phoenix. Pettitte (6-3), who was 1-2 in his previous six starts, pitched...
J.P. Morgan ups ante in Enron litigation
In announcing its second quarter results today, J.P. Morgan Chase & Co. announced that it has increased its total litigation reserve to $4.7 billion before taxes. The reserve covers Morgan's contingent liability in the ongoing Enron civil litigation and other...
Lay PR campaign continues
According to this Houston Chronicle article, Ken Lay's criminal defense attorney, Mike Ramsey, is apparenly not happy that Enron Task Force lawyers had sent letters to U.S. District Judge Sim Lake in late May and mid-June indicating that they were...
Ken Lay's insider trading
One of the most interesting aspects of the government's indictment against former Enron Chairman and CEO Kenneth Lay is that it does not includes any insider trading charges. On the other hand, the SEC's civil complaint against Mr. Lay includes...
Enron reorganization plan approved
U.S. Bankruptcy Judge Arthur Gonzalez approved Enron Corp.'s Chapter 11 reorganization plan today in New York, under which $63 billion of claims will share about $12 billion in cash and the value of stock in newly formed companies that will...
WSJ on Mike Ramsey
This Wall Street Journal ($) article profiles Houston criminal defense attorney, Mike Ramsey, who is heading up the criminal defense team that is defending former Enron Chairman and CEO, Kenneth Lay. The article captures Mr. Ramsey's homespun wit in the...
Two trials, two CEO's
The Wall Street Journal's ($) Holman Jenkins' weekly column today addresses the different troubles facing former Enron Chairman and CEO Kenneth Lay and Pfizer's CEO Hank McKinnell. First, Mr. Jenkins examines the indictment against Mr. Lay and observes that it...
Let's make CEO negligence criminal
Enron's excesses and the unprecedented media firestorm over the company's collapse have muddled the reasoning of even normally clear thinking business columnists. The latest to be afflicted is the Wall Street Journal's ($) Alan Murray, who comes up with this...
More on the sad case of Jamie Olis
This LA Times article is the best analysis that I have seen to date regarding what occurred in the sad case of former mid-level Dynegy accountant Jamie Olis that resulted in the absurd 24 year sentence for Mr. Olis. In...
Innocent until proven guilty, except in the Enron case
This Houston Chronicle article reports on a survey that defense attorneys commissioned in connection with one of the upcoming Enron-related criminal trials. The survey concludes that over 80% of potential jurors in Houston believe that believe that the indicted Enron...
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...
Ken Lay indicted
A Houston federal grand jury has charged former Enron Chairman and CEO Kenneth Lay with an unknown number of crimes today under a sealed indictment. The indictment will be unsealed in a hearing tomorrow morning, at which time Mr. Lay...
B of A settles Enron claims
This NY Times article reports on yesterday's announcement that Bank of America Corp. is the first bank defendant to settle claims against it in the Enron Corp. class-action lawsuit alleging that some of the country's top banks and securities firms...
Juice Box is wired
The Stros announced yesterday that the Minute Maid Park (better known as the "Juice Box") is now wired for WiFi high speed internet access....
Lay and lawyers in D.C. to try and meet with Enron Task Force
On the heels of an extraordinary front page NY Sunday Times interview, the Chronicle reports that former Enron CEO Ken Lay is in Washington, D.C. this week to lobby for a meeting between the Lay's lawyers and the prosecutors working...
Ken Lay gives an incredible interview on Enron
In an unusually bold move in connection with an incredibly difficult case to defend, former Enron chairman and CEO Kenneth Lay is the subject of a wide-ranging interview on the Enron criminal investigation that appears in this NY Times Sunday...
Enron Task Force adds charges in Nigerian Barge case
The Enron-related criminal case dubbed the "Nigerian Barge case" would already be in trial but for a conflict with the Judge's previously scheduled vacation that resulted in a postponement of the trial until mid-August. Using that delay to their advantage,...
Chiseling in on Oscar Wyatt's Enron asset play
Reuters reported Tuesday that Enron Corp. has received an offer for its CrossCountry Energy unit from an unidentified "investment-grade company" that is substantially larger than the earlier bid that Houston oilman Oscar Wyatt's company made earlier this year. This Chronicle...
Enron criminal defendants: This is your Judge!
One U.S. District Judge is doing something about the federal sentencing guidelines. Here is the opinion. Here is a follow-up NY Times article on the opinion....
Well, this is an interesting approach
Mike Ramsey, the Houston-based criminal defense attorney who is representing former Enron CEO and Chairman Ken Lay, has requested another meeting with the Enron Task Force to plead his case that Mr. Lay should not be indicted. Ramsey's move in...
Stros take Angels series
The Stros took advantage of Wade Miller's gutty pitching performance and scored runs from unlikely sources as they beat the Angels 3-1 Sunday afternoon to take two out of the three game series at the Juice Box. Miller gave up...
It's definitely no resort
This NY Times article does a good job of describing what Lea Fastow, the wife of former Enron CFO Andrew Fastow, will face while serving her one year prison sentence at the Houston Federal Detention Center in downtown Houston....
Enron Task Force moving on Ken Lay
This Houston Chronicle story reports that the Enron Task Force plans to ask a grand jury to indict in the next two weeks Ken Lay on charges relating to the last few months he was CEO of Enron before the...
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...
Skilling gets some scratch
U.S. District Judge Sim Lake approved an agreed order that allows ex-Enron CEO Jeff Skilling to receive what could be approximately $1 million in annual interest earnings off a portion of the $66 million in assets that Judge Lake froze...
You just never know
In their most improbable win of the season, the Stros scored a run in five different innings to beat the Brew Crew in the final game of the Stros marathon two week, 12 game road trip, 5-4. Playing without Lance...
Plaintiffs counsel in Enron civil litigation involved in merger
Lerach Coughlin Stoia & Robbins LLP -- lead plaintiffs' counsel in the multi-district civil litigation against Enron Corp. -- announced today that it is merging effective August 1 with Boca Raton-based Geller Rudman PLLC. Both firms specialize in class action...
Judge Hittner goes nuclear on Mike DeGeurin
U.S. District Judge David Hittner today took the unusual step of issuing a ten page order admonishing prominent Houston criminal defense attorney, Dick Degeurin, for sending a background report about DeGeurin's client, Lea Fastow, to the Bureau of Prisons. Mrs....
Enron Nigerian Barge criminal trial postponed
Following on the earlier post from today, U.S. District Judge Ewing Werlein has postponed the trial of the Enron Nigerian Barge case. The trial will now begin on August 16....
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...
Nigerian Barge defendants go on the offensive
This NY Times article reports on a potentially important development in the Enron-related criminal case against two former Enron executives and four Merrill Lynch executives dubbed the "Nigerian Barge case." The Houston Chronicle story on these latest developments is here....
Nigerian Barge case update: Justice won't call Fastow
As noted in this earlier post, the Enron Task Force's first trial in a case stemming from its over two year investigation into the collapse of Enron Corp. will begin next Monday in U.S. District Judge Ewing Werlein's court in...
Stros' buzzard's luck
The Stros lost their seventh game in the last nine on Saturday afternoon as the Cards scored six runs in the last two innings in their 10-3 victory. Albert Pujols went nuclear on the Stros, going 4 for 5 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...
Stros leaking serious oil
The Stros limp home tonight after losing their fifth straight game and fourth straight to the Reds, 7-5. Berkman is the only player hitting consistently well, and no one is pitching lights out at this point. Not a good combination,...
Oscar Wyatt makes big Enron asset play
This NY Times article reports on Enron Corp.'s announcement today that, subject to Bankruptcy Court approval, it has agreed to sell for $1.8 billion its most valuable remaining pipeline assets to a company run by colorful Houston billionaire Oscar Wyatt,...
Stros are road warriors
For the second straight night, the Stros hammered a pitcher who had dominated them a week earlier and improved their road record to 12-4 as they beat the Marlins at Pro Player Stadium, 10-2. Tim Redding continued his improved pitching...
Another former Enron exec cops a plea
This Chronicle story reports on today's plea bargain and settlement involving Paula Rieker, the former Enron managing director of investor relations. Under the deal, Ms. Rieker will turn over to the SEC nearly half a million dollars she made off...
Stros pound Fish
Baseball is a bewildering game. Last Wednesday night at the hitter friendly Juice Box, Dontrelle Willis threw 91 pitches in hurling a complete game 5-2 victory for the Marlins over the Stros. The Stros' Wade Miller left that game in...
Stros break three game skein
The Stros showed signs of breaking out of their collective slump of over the past week as they cranked out 12 hits on Saturday night in defeating the Mets, 7-4. Andy Pettitte won his fourth straight game since coming off...
CFTC investigating natural gas storage numbers
This Chronicle article reports that the Commodity Futures Trading Commission has subpoenaed information from several energy companies -- including Duke Energy Corp., El Paso Corp., CenterPoint Energy Inc. and Oneok Inc. -- to determine more information about how storage data...
Partial settlement in Enron employee class action
This NY Times article reports on the $85 million partial settlement that has been in the works for quite some time in the Tittle class action lawsuit involving claims of former Enron employees who lost their shares in their 401K...
Institutional litigation reserves increasing
On the heels of the news of Citigroup's WorldCom settlement and increase in litigation reserves for other (i.e., Enron) investor litigation, this Wall Street Journal ($) article reports on the pressure that other financial services firms are facing to increase...
Citigroup WorldCom settlement: one down, Enron to go
This NY Times article reports on the settlement of the WorldCom class action lawsuit against Citigroup. The $2.65 billion settlement is the largest ever by a bank, brokerage firm or auditor to settle an investor fraud case based on the...
Say what, Wendy Gramm?
Floyd Norris notes in this NY Times article that Securities and Exchange Commission chairman William Donaldson is not sounding or acting like the go-slow regulator that many expected when he was named to the post. As Mr. Norris notes: [Mr....
The amazing Barry Bonds
If you hadn't noticed, Barry Bonds has just completed one of the best months of hitting in the history of Major League Baseball. In April, Bonds' had an incredible .472 batting average, an equally impressive .696 on base average, an...
Skilling gets mild slap for his New York adventure
U.S. Magistrate Frances Stacy told ex-Enron CEO Jeff Skilling this afternoon that he must quit drinking alcohol, get both alcohol and mental health treatment, be subject to a curfew and get a job or do volunteer work in order to...
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...
Another Enron-related plea bargain
The SEC and the Enron Criminal Task Force are preparing to bring civil and criminal charges -- along with a plea bargain and a settlement -- against Paula Rieker, the former corporate secretary and investor-relations executive of Enron Corp. Government...
Milberg Weiss split consummated
This NY Times article reports on the long brewing split into two firms of the large class action plaintiffs' firm, Milberg Weiss Bershad Hynes & Lerach. One of the firms will be led by William Lerach, based in San Diego,...
Enron Task Force blinks, enters into new plea deal with Lea Fastow
This Chronicle article reports that Lea Fastow, wife of ex-Enron CFO Andrew Fastow, was charged with a misdemeanor tax count today and is scheduled to plead guilty at a new arraignment next Thursday. Previouwly subject to a six counts of...
More on Skilling's New York Adventure
As noted earlier here, the Enron Task Force has requested that the Court in its criminal case against former Enron CEO Jeff Skilling impose additional conditions on Skilling's pre-trial release because of Skilling's well-publicized bender in New York City on...
Three Duke Energy traders indicted
Three former executives involved in Duke Energy's energy trading operation have been indicted in what the local U.S. Attorney's Office contends was a fraudulent scheme to attain bonus compensation through making part of Duke Energy's trading operations look profitable when...
Skilling's New York adventure comes under scrutiny
The bizarre tale of former Enron CEO Jeff Skilling's hospitalization in New York a couple of weeks ago took another twist as the Enron Task Force filed pleadings in the pending criminal case against Skilling today contending that Skilling's conduct...
Judge sets Lea Fastow trial to begin June 2
U.S. District Judge David Hittner kept the pedal to the metal in the Lea Fastow trial today by scheduling the case to begin on June 2. Everyone still expects that the government and counsel for Ms. Fastow will cut a...
Enron, Judge Gilmore, and the Rolling Stones
The Chronicle reports here that the Enron criminal case against several individuals formerly involved in Enron's Broadband unit has induced U.S. District Judge Vanessa Gilmore to begin quoting the Rolling Stones: Citing nonlegal scholar Mick Jagger, a federal judge Monday...
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...
Enron partners buy out interest in troubled India plant
This NY Times article reports that The Bechtel Group and the General Electric Company, partners of Enron Corporation in the troubled Dabhol Power Company in India, have bought Enron's 65 percent share of Dabhol to recoup part of the $1.2...
Jeff Skilling's New York adventure
Former Enron CEO Jeffrey Skilling was taken to a hospital early today after several people called police saying he was pulling on their clothes and accusing them of being FBI agents. New York police found Skilling at 4 a.m. at...
Lea Fastow withdraws guilty plea
U.S. District Judge David Hittner announced to a crowded federal courtroom this morning that he would not accept the plea arrangement between the Enron Task Force and Lea Fastow. The judge declined to tell Lea Fastow what his sentence would...
Lea Fastow plea bargain
This morning, Lea Fastow -- wife of former Enron CFO Andrew Fastow -- will learn whether federal District Judge David Hittner will accept her plea bargain with the Enron Task Force....
O.K., but no golf bets
U.S. District Judge Sim Lake has released less than $225,000 of former Enron chief accountant Richard Causey's money that is subject to the court's previous order freezing substantially all of Mr. Causey's assets and $55 million of former Enron CEO...
Holman Jenkins on the sad case of Jamie Olis
As noted on this blog before, Holman Jenkins is one of America's most insightful commentators on business issues. In his Wall Street Journal ($) column today, Mr. Jenkins addresses the injustice that occurred recently in the 24 year sentence given...
Calvin Murphy charged with sexually assaulting five daughters
In a stunning development on the local Houston scene, former Houston Rocket and Basketball Hall of Famer Calvin Murphy was charged today with sexually molesting five of his own children in the late 1980s and early 1990s. Murphy, who is...
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...
The sad case of Jamie Olis
This NY Times article reports on the sad case of a former midlevel executive of Houston-based Dynegy, the energy company that attempted to merge with Enron and then called off the deal shortly before Enron filed bankruptcy in December, 2001....
Opinion continuing freeze on Skilling assets
Following on this post from yesterday, here is U.S. District Judge Sim Lake's opinion continuing the freeze on former Enron CEO Jeff Skilling's assets pending further order of the Court in Skilling's criminal case. Essentially, Judge Lake rules that the...
Skilling assets remain frozen
U.S. District Judge Sim Lake refused today to lift a freeze order that the Enron Task Force had obtained on $55 million of former Enron CEO Jeff Skilling's assets pending further order of Judge Lake. I will be interested to...
ChevronTexaco: Enough already
Clearly worn down by the prospect of dealing further with the Harris County Commissioner's Court, ChevronTexaco announced yesterday that it had closed the deal to buy the former Enron Building in downtown Houston. In light of the County's recalcitrance, I...
The cost of Skilling's defense
The Chronicle leads with a misleading headline today regarding the $23 million that former Enron CEO and COO Jeff Skilling has set aside to pay the cost of his defense in Enron-related matters. The Chronicle article suggests that the $23...
County continues to play hardball with Chevron over Enron Building
This previous post addressed Mayor White's premature announcement of ChevronTexaco's purchase of the former Enron Building in downtown Houston. Harris County Commissioners announced today that they are not inclined to grant the ad valorem tax abatement that ChevronTexaco was relying...
Enron MDL Trial Date postponed again
This Chronicle story reports that Judge Melinda Harmon has postponed the trial of the consolidated securities fraud civil suits against former Enron insiders and and financial institutions that conducted business with Enron until October, 2006. The number of depositions that...
Prosecutors get chummy with the Fastows
This Chronicle report indicates that the Enron Task Force and the Fastows are having some very interesting conversations of late, and the Task Force would like to continue the discourse....
Skilling scheduling conference and other Enron-related news
The scheduling conference was held today in former Enron CEO Jeff Skilling's criminal case, and it doesn't sound as if it went all that well for the Enron Task Force. Federal District Judge Sim Lake agreed with the Skilling defense...
Chevron-Texaco and Harris County continue to play hard ball
As this prior postreported, Chevron-Texaco is balking at closing its purchase of the former Enron building in downtown Houston because Harris County Commissioners have not approved a tax abatement in favor of Chevron-Texaco. This Houston Chronicle article reports that Chevron-Texaco...
Waste Management names new CEO reshuffles top management
Houston-based Waste Management named David P. Steiner to succeed A. Maurice Myers as chief executive officer. Mr. Myers will remain as chairman until November, when he will retire. Upon Mr. Myers' retirement, board Director John Pope, a former president and...
If Ebbers Masterminded the Fraud, Why Didn't He Sell More Stock?
Floyd Norris is one of the most insightful business reporters for the NY Times. In this column today, Mr. Norris raises the issue that, if former WorldCom CEO Bernie Ebbers really masterminded an elaborate fraud at WorldCom, why didn't he...
Did Mayor White jump the gun?
On Feb. 25, Houston Mayor Bill White announced to much fanfare that ChevronTexaco had agreed to buy the former Enron building in downtown Houston. But this Chronicle story today indicates that the deal apparently has developed an unexpected hiccup: Mayor...
More Enron Grand Jury news
This Chronicle article reports that former Enron treasurer Ben Glisan, the right hand man of former CFO Andrew Fastow and the only former Enron executive who is presently serving prison time, has been testifying before the Enron grand jury in...
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...
Bankruptcy Court competition for big business reorganization cases
This Atlanta Jounal Constitution article discusses an issue that UCLA law professor Lynn LoPucki characterizes as a "race to the bottom" -- i.e., bankruptcy courts in certain jurisdictions bending federal bankruptcy law to market themselves to debtors' lawyers who often...
The similiarities between Enron and U.S. Govt. financing
A substantial part of the Justice Department's criminal cases against former Enron executives Jeff Skilling and Richard Causey involves their complicity in Enron's liberal use of "off-balance sheet" partnerships that Enron used to shift risk on debt that otherwise would...
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's friends and family
This Houston Chronicle article relates ex-Enron CEO and COO Jeff Skilling's inadvertent meeting at the Houston Federal Courthouse this past Thursday with ex-Enron treasurer Ben Glisan, who was ex-Enron CFO Andrew Fastow's right hand man during the final year and...
Skilling Indictment Overdrive
All the major newspapers have multiple articles on yesterday's indictment of former Enron CEO and COO, Jeff Skilling. The best are The Houston Chronicle, The Wall Street Journal ($), and The New York Times. As mentioned in earlier posts, I...
Update on Skilling Indictment
Here is the indictment against ex-Enron CEO Jeff Skilling, which also serves as a supeceding indictment against former Enron chief accountant, Richard Causey. As noted earlier in an earlier post, the indictment continues a government strategy in the Enron-related criminal...
Skilling Indicted
The Chronicle is reporting that the Houston federal grand jury investigating the demise of Enron Corp. indicted Jeff Skilling, Enron's former CEO, this afternoon. Mr. Skilling surrendered to the FBI to the FBI in Houston early Thursday. Earlier posts regarding...
El Paso writes down reserves
Houston based El Paso Corporation disclosed that it is reducing the value of its estimated proven reserve base of its oil and gas properties by 41%. Proven reserves represent what an oil and gas company can reasonably expect to produce...
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...
More on Impending Skilling Indictment
The NY Times follows yesterday's Houston Chronicle report with this article on the impending indictment of former Enron CEO, Jeff Skilling. Mr. Skilling and former Enron Chairman Ken Lay are the two highest ranking former Enron officers who have not...
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,...
The Law of Unintended Consequences
In the aftermath of Enron's demise, Congressmen fell over themselves in self-righteous indignation proposing legislation that would ensure that such a debacle would never occur again. Not only does the nature of man ensure that another Enron debacle will occur,...
CFO's: Beware of this Award
Paul Krugman pens a review in this week's NY Times Review of Books in which he makes the following observation: In 1998, CFO Magazine gave an Excellence award to Scott Sullivan, the chief financial executive of WorldCom. In 1999 it...
Hounding Martha But Not Kenny Boy?
In an earlier post, I noted a report that the Justice Department is currently focusing on whether to indict former Enron Chairman and CEO Ken Lay. In a NY Times piece today, the timing of which is not good for...
Lawyers Need Lawyers
Many of my friends in business complain regularly (and with much validity) about how often they are required to consult attorneys. They will derive much pleasure from this NY Times article, which explains that now law firms are hiring general...
Feds Allegedly Focusing on Lay
The Wall Street Journal's John Emshwiller reports (subscription required) today that federal investigators are hunkering down on their investigation of former Enron Chairman and CEO, Ken Lay. Mr. Emshwiller has been reporting on the Enron meltdown from the beginning back...
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