Saturday, May 27, 2006
For Skilling and Lay, there should be a set of penalties for all of the lives they have destroyed. First, liquidate all of their assets, wherever they may be hidden, and give the proceeds to the tens of thousands of people permanently crippled with hardship because of what they and their confederates have done.
Second, have Lay and Skilling spend the rest of their natural, healthy lives touring the country to serve those they bilked. Scrubbing septic tanks comes to mind.
The greed will continue
You can rest assured that the Lay and Skilling verdicts force the "good old boys" to put on their thinking caps to find many, many new ways to scam their companies and the government. Lots of money seems to breed evil and greed. The more you got, the more you want.
In the long run, this type of corruption will continue. The shame of it all is how these people, who could have done so much good, have forced so many people into near poverty and put a black mark on the American dream.
Former WorldCom Inc. Chairman Bernard Ebbers, sentenced in 2005 to 25 years in federal prison for leading an $11 billion fraud, is free pending his appeal. Cendant Corp.'s former Vice Chairman E. Kirk Shelton faces 10 years in federal prison for accounting fraud. He is also free pending appeal.
Former Tyco International Ltd. CEO L. Dennis Kozlowski and his former finance chief Mark Swartz are serving 8 1/3 to 25 years in New York state prisons for stealing from their company and defrauding investors.
May 26 (Bloomberg) -- Now that Kenneth Lay and Jeffrey Skilling have been convicted of the fraud that destroyed Enron Corp., the government is poised to seize $62 million of their assets.
Prosecutors are seeking to recover $57 million in cash, securities and real estate from Skilling, including his Houston home. They want Lay's high-rise condominium, worth about $5 million. The U.S. froze the assets in 2004, when Lay and Skilling, both former chief executive officers of now-bankrupt Enron, were indicted. A jury yesterday found them guilty of fraud and conspiracy.
Forfeitures are permitted if prosecutors can connect the assets to the crime. Under federal law, the seized assets could go to law enforcement, regulatory agencies or victims.
``Given the convictions, this will probably be a fairly perfunctory proceeding,'' Kirby Behre, a former prosecutor now in private practice and co-author of a book on federal sentencing for business crimes, said today. ``The judge has some discretion in the amount of the forfeiture order.''
Enron, once the world's largest energy trading firm, had more than $68 billion in market value before its bankruptcy in December 2001 wiped out thousands of jobs and at least $1 billion in retirement funds that held company stock.
You are telling me that they are only going after $62 million?? Easily, I would put at 10% of the rest of their fortunes that are stashed away in offshore and (Swiss?) bank accounts and other scam-like places to place huge amounts of cash.
Fork it over, Fannie Mae
The mortgage giant is paying for its accounting tricks.
May 27, 2006
IT WAS WAY BACK IN 2004 when mortgage giant Fannie Mae came under fire for using risky investments and accounting tricks to meet its earnings-per-share targets. On Tuesday, the company finally announced that it would pay $400 million in fines and accept stiff restrictions on its operations in a long-awaited settlement with the federal government.
The settlement, along with the release of a scathing report by the Office of Federal Housing Enterprise Oversight, is welcome not just because it is a victory against shoddy corporate oversight. Bringing Fannie Mae to justice is important because of the company's unique ties to Washington.
Fannie Mae's board should consider the next best thing to retroactively firing former Chief Executive Franklin Raines and former Chief Financial Officer Timothy Howard, who were allowed to take early retirement in 2004. It should force Raines and Howard — and any others who profited through the accounting tricks — to reimburse the company for the compensation they received by falsely achieving earnings targets. According to the report, $52 million of Raines' $90 million in compensation from 1998 to 2003 was linked to "achieving" earnings-per-share goals.