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Remember Enron?

Posted by: David Ring
March 02, 2010
Topic: High Profile Cases

It seems like ages ago that Enron, one of the largest, most respected, and most profitable corporations in America, collapsed in 2001 amid a massive accounting scandal.  It turned out that Enron had actually lost a fortune trading in complex derivative securities but hid those losses in even more complex, off-the-balance-sheet companies. 

After a high-profile trial in Houston (where Enron's headquarters were located, and where many folks who worked at Enron lost their jobs and their life savings since all of their 401k and pension investments were in Enron stock), top executive Jeffrey Skilling was convicted of a variety of securities crimes and sentenced to 24 years in prison.  Another top exectutive, Kenneth Lay, died from a massive heart attack after the trial and before he went to prison.

This week, Skilling's lawyers argued before the U.S. Supreme Court in their attempt to obtain a new trial or at least a reduced sentence for Skilling.  The Supremes appeared receptive to some of the arguments, particularly those involving a very vague fraud statute that Skilling was found guilty of violating and also the fact the trial was held in Houston, rather than a more impartial venue. 

On its face, Skilling's 24-year prison sentence seems excessive, especially with the passage of time and the subsequent meltdown of so many other major companies, financial institutions, banks, and real estate firms in the past few years for similar misdeeds.  The Supremes are likely to cut him a break.