Jeffrey Skilling given 24 Years
Former Enron CEO Jeffrey Skilling was sentenced to 24 years of prison.
This will likely translate to 20 years and four months if he is good
in prison. Skilling was seen as not very cooperative and possibly even
worse from a sentencing perspective not very humble or apologetic
during questioning.
Cooperative CFO Andrew Fastow was given a six year term for
cooperating with prosecutors in the case. Founder Kenneth Lay died
before his own sentencing and his conviction was overturned due to his
death, which prevented any potential appeals.
By comparison Bernard Ebbers, the CEO of WorldCom, received a 25 year
sentence for his role in that Fraud.
So what is the lesson of these convictions?
1. Company Officers of US Companies are accountable to US Law
2. If you die, you don't need to appeal to the courts (but maybe you
will to a higher power)
3. If you cooperate, you may still go to jail, but you may get out
before you die of old age.
4. Don't cook the books!
5. Ignorance is no defense!
6. If you are guilty of number 4, then you better apologize loudly
before sentencing.
Honestly, I'm not certain if too many other lessons have or will be
learned from this affair. Sorbanes Oxley has been created and
strengthened. Unfortunately, that legislation is very very flawed and
even more unfortunately has very very large loop holes that are being
used by Multi-National Corporations every day. From a pessimistic
perspective, these convictions may represent an old breed of corporate
officers that will do time in prison because they were not smart
enough to avoid the loopholes. I say pessimistic because too many
companies are looking for the loopholes instead of making changes in
the corporation to keep things on the up and up.
In the meantime, I look forward to the next big Public Accounting Firm
scandal to hit. Enough attention has been focused on the boardroom,
its time to get back to the trenches and root out some of the
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