This sure sounds pretty darn similar to the corporate case of the decade:

[Stephen] Crawford, a former investment banker who was appointed co-president by Philip J. Purcell in March amid a power struggle, left the firm yesterday. . . Mr. Crawford’s pay package is particularly unusual because he was co-president for only three months, yet he will take home a severance package that pays him [$32 million] as if he had been co-president for two years and allows his stock to vest – the executive-suite equivalent of hitting the lottery.

That’s pretty good work if you can get it. ;^)

Amidst echos of the Supreme Court oral argument in the Arthur Andersen case, this NY Times article reports that the oral argument before the Second Circuit Court of Appeals in former Credit Suisse First Boston investment banker Frank Quattrone‘s appeal of his criminal conviction did not go well for the prosecution. Earlier posts on Mr. Quattrone’s appeal are here and here.
Mr. Quattrone was convicted in May 2004 of witness tampering and obstructing federal grand jury and SEC investigations into whether Credit Suisse First Boston was improperly requiring kickbacks in the form of larger than normal commissions from customers in exchange for hot initial public offerings. Mr. Quattrone was sentenced to a year and a half in jail, but — unlike former Merrill Lynch investment banker Daniel Bayly — remains free pending disposition of his appeal.
With the Supreme Court’s recent decision in the Arthur Andersen case as a backdrop, the three-judge appellate panel considering Mr. Quattrone’s appeal focused on how much the former investment banker needed to know about the investigations he was convicted of obstructing. As in the Andersen appeal, the judges focused on whether the trial judge’s instructions gave the jury leeway to convict Mr. Quattrone of a crime even if he lacked the requisite intent to commit the crime.

Continue reading →

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 trial that began on Tuesday morning and will conclude today.
No surprises have occurred so far in the closing arguments. As expected, the prosecution repeatedly pointed to the “elephant in the courtroom” — i.e., the huge amount of money that Defendants Hirko, Shelby and Yeager made on Enron stock sales (between the three, about over $150 million) during the period in which the prosecution contends that they were making false public statements about Enron Broadband’s technological capabilities. Similarly, counsel for Defendants Hirko and Yeager attacked the credibility and motives of key government witness and former Enron Broadband co-CEO Ken Rice, whose testimony was impeached at least to some extent earlier in the trial when he testified falsely that a portion of an Enron Broadband promotion video had been shown to analysts when, in fact, it had not.
An unexpected problem that developed for the prosecution during the trial reared its head again during the first day of closing arguments — that is, the highly different status of Defendants Howard and Krautz from Defendants Hirko, Shelby and Yeager, who made the big money in Enron stock sales. Messrs. Howard and Krautz did not make any huge stock sales and are charged instead with fraud in connection with their involvement in an Enron Broadband structured finance transaction. Nevertheless, the prosecution largely ignored them for large parts of the trial, choosing to focus on the more juicy securities fraud and insider trading charges against Defendants Hirko, Shelby and Yeager. From accounts of Tuesday’s arguments, the same trend continued, which may be an indication that the prosecution does not have much faith in its case against Messrs. Howard and Krautz and is trying to bear down on its case against the three big money defendants. Counsel for Messrs. Howard and Krautz will give their closing arguments this morning.
After an often tortuous three month trial, it’s doubtful that a day and a half of closing arguments will have much of an effect on the jury. In most long trials, my experience is that jurors have made up their minds long before closing arguments and, at this point, are simply interested in getting into deliberations so that they can freely talk about the trial among themselves. After the closing arguments conclude today, U.S. District Judge Vanessa Gilmore will read the charge to the jurors, who will then probably meet briefly and then adjourn for the day. Substantive jury deliberations will likely commence on Thursday morning.
Update: Here is Ms. Flood’s report from the remainder of the closing arguments on Wednesday.

The blogosphere has finally responded to New York AG (“attorney general” or “aspiring governor,” take your pick) Eliot Spitzer‘s campaign of criminalizing business, which recently crossed the line from merely misguided to petty and vindictive.
Check out Spitzer Watch, which is “exposing the hypocrisy of New York State Attorney General and gubernatorial candidate Eliot Spitzer.”
My sense is that this is going to be a very busy blog.