The criminalization of Enron is really starting to unwind. The Houston Chronicle reported last night that the Justice Department won't seek to overturn a fifth circuit appeals court decision throwing out most of the 2004 convictions of several Merrill Lynch bankers.
The convictions for fraud and conspiracy of four Merrill executives were thrown out last August when the court ruled that the prosecutors had presented the jury with an improper legal theory. Prosecutors had argued that the conduct of the defendants had deprived Enron of its right to their "honest services." The appeals court ruled that since the allegations did not involve bribery or theft, and the conduct of the defendants was consistent with Enron's corporate goals, the defendants could not be convicted on the "honest services" theory.
Since the prosecution of former-Enron CEO Jeff Skilling, who is now serving a 24-year and four month jail sentence, also used the "honest services" theory, there has been some speculation that the court's decision might be a sign that it could overturn some of his convictions as well. When the fifth circuit court denied Skilling bail in December, it noted that there were "serious frailties" with his conviction on securities fraud and insider trading convictions.
The decision by the government not to appeal the fifth circuit ruling means that Skilling's appeal before the same court will be able to rely on ruling as controlling law. It may be too early for Skilling to pop the cork on the champagne. But it's probably not too early to start putting some on ice.
Government won't challenge appeal court's decision in Enron-related case [Houston Chronicle]
Posted by Lee D , Feb 16, 2007 3:46PM
On the civil law side, in light of the Merrill Lynch criminal appeal, I wonder if CIBC regrets having spent $2.5B to settle the suit against them, while TD and Royal Bank are still (to my knowledge) defending against their suits?
Posted by Bulging Bracket , Feb 16, 2007 5:55PM
Fastow is going to love this. Do a plea deal and serve an order of magnitude more time than the guy you help "convict".
Let this be a lesson to everyone: never plead out. Either through mortality or an exceptionally weak case, you'll be better off fighting the government than bending over and asking for another.
Posted by abe , Feb 17, 2007 1:57PM
BB has it right; how did Rudy do? Seem to recall he had his ass handed to him in court. In that vein: http://youtube.com/watch?v=87hllT_d4hQ
Bunch of perp walking mother bitchs.
Posted by Anonymous , Feb 18, 2007 4:10AM
The Enron prosecutions were/are characterized by perp walks, defamatory DOJ press conferences and unbridled use of witness intimidation, while the lynch mob never ceased to shout out its encouragement. You name the prosecutorial power/advantage, and it was abused. These prosecutions appears to be unraveling And if they do, perhaps the use of abuse will have been shown to be a dead end street, the “justice” in the criminal justice system more sturdy than it now appears. Of course, even then how to undo the damage done? As Skilling said, “good people have died.” Several fine men have spent and are spending time in prison on trumped up charges. Others are or will be imprisoned based on false, self-serving pleas. Yet folks like Rudy, who jumped started their careers with such abuse, seem to get along afterwards just fine. I going to listen to Abe's linked song again.