Tuesday, October 13, 2009

Enron Update

The WSJ reports that the Supreme Court will consider the appeal of Jeffrey Skilling, former President, CEO, and COO of Enron:
The justices agreed to look at two issues in the Skilling appeal. Both could have broader repercussions in criminal cases, say legal observers. One has to do with the government's contention that Mr. Skilling violated his legal obligation of providing "honest services" to Enron shareholders because he lied to the public about the company's financial condition. Enron collapsed into bankruptcy in December 2001. The second issue involves Mr. Skilling's claim that he wasn't able to get a fair trial in Houston, Enron's headquarters, because of anger in the community over the company's collapse.
I find it curious that eight years after Enron's collapse we still see some ambiguity regarding the legal consequences of the Enron scandal.  If nothing else, this highlights the increased opportunity that managers have to get away with fraud, as financial statement fraud appears to be a difficult crime to prove/prosecute.

No comments:

Post a Comment