Efforts to halt the extradition of three British bankers facing Enron related charges in the U.S. ended today when they were seated on board a flight headed from Gatwick Airport to Houston, Texas. The plane is currently somewhere over the Atlantic, with the three bankers seated near the back and surrounded by US marshals. No word on whether any passengers declined to board, fearing a possible ‘curse of Enron.’

‘NatWest Three’ on flight to US [BBC]

If you have ever been called to testify about Enron, you might want to check your life insurance policy is up to date. News is breaking that a fifty-three year old British banker who was questioned by U.S. authorities in connection the Enron case was found dead in an east London park yesterday. Neil Coulbeck is said not to have been directly involved with the Enron transactions for which the U.S. is seeking the extradition of three other Brit bankers, David Bermingham, Gary Mulgrew and Giles Darby. No word yet on cause of death.
Coulbeck worked in the US for the Royal Bank of Scotland, which acquired NatWest, as the head of financial markets for North America. He left in 2001, the same year Enron imploded.

Enron witness found dead in park [BBC]

Prominent businessmen and Conservative Party leaders in Britain are protesting the use of a “War on Terror” treaty to extradite three British bankers to the US, where they face charges related to the collapse of Enron.
A letter signed published in the Daily Telegraph, a right-leaning newspaper in Britain, urged the British government to hold off on extraditing threee former NatWest bankers—David Bermingham, Gary Mulgrew and Giles Darby. They are charged with conspiring with Enron executives to sell a stake in an Enron asset in 2000 for less than it was worth.
The Brits are protesting the use of a treaty aimed at speeding up the prosecution of terrorists to extradite alleged white-collar criminals. Apparently they don’t understand the Law of Prosecutorial Entropy in the US. As a reminder, that law states that all innovative criminal sanctions aimed at violent criminals will eventually be used to prosecute businessmen. See, for instance, the history of racketeering laws. See, also, the career of possible Republican presidential candidate Rudolph Giuliani.

Business chiefs protest at bankers’ extradition [Reuters UK]

Letter to John Reid, Home Secretary [Telegraph]

If there’s anything the growing scandal over options backdating seems to demonstrate, it’s that the brute force approach to dealing with corporate malfeasance is failing. In other words, you can’t just ban stuff and make it go away. Boards and executives will simply delve deeper into accounting exotica in order to avoid scrutiny. Harvard economist Jeffrey Alan Miron thinks the answer is to legalize fraud:

Should corporate fraud and malfeasance be crimes? Should the SEC dictate corporate disclosure and accounting practices? What would happen if all such matters were left to private parties?
To answer these questions, consider the following.
So an alternative to the criminal / regulatory approach to corporate misconduct is private contracts. Under this scenario, shareholders would attempt to design and enforce contracts for executives that discourage fraud. This could mean organizational structures that limit the power of any one executive, checks and balances like outside audits, and deferred compensation that is conditional on good performance.
Despite clever contracts, some fraud would still occur. But under the contracting approach, this would be a civil matter between shareholders and the corporation rather than a matter of criminal law.

Continue reading »

It was bound to happen. Anytime a scoundrel takes a sucker for everything he’s got, someone will eventually blame the sucker. Afterall, he shouldn’t have been a sucker in the first place.

So what about the victims that suffered at the hands of the above mentioned individuals when they lost their life savings, jobs, pensions etc.? I am sorry – but if someone had their life savings in one and only one stock, I would question their sanity. In fact, retirement money, pensions and other such assets should always remain in diversified funds. Pleading ignorance to this rule of thumb is like the smoker who pleads ignorance to the warning printed on the carton. So honestly, those who lost their livelihood due to the shenanigans at Enron really can’t blame anyone but themselves for not being careful with their own money. They put their eggs in one basket – their job, retirement savings and their future and now they want someone to pay for their own mistakes.

This reminds us of the con-man’s justification of his trade–”You can’t cheat an honest man.” Or, in the words of Mike Skinner (aka “The Streets”), “Using the following, I’m going to show you: A) How to con someone using their own greed, B) That you won’t feel bad ‘cos they’re trying to con you anyway, and C) TAKING THEIR MONEY!”
So, see, you don’t have to feel bad for the Enron investors. They deserved to have their savings wiped out by crooks because they were stupid and greedy. The stupid and greed deserve what they get. The smart and greedy, well, that’s another story. We guess that’s how it works.
My Opinion on the Enron Folly [Stocks Advice by StocksandBlogs.com]

Last week, we mentioned that one of the things that Ken Lay was doing during the hours between his conviction and the time he emerged from the Houston courthouse was standing around with his family. Seemed fair enough. We’d probably say a couple of prayers if we were convicted of crimes that promised to put us in jail for the rest of our lives too.
But when Lay emerged from the courthouse, he decided to deliver a miniature sermon on God’s role in our fate. Now we see professional athletes do this all the time, thanking God for their victories. But you usually don’t see the losers blaiming God, which is pretty much what it sounded like Lay was doing when he went on about remembering that “God is in control.”
Jeff Matthews was pretty disgusted.

The only thing missing from the whole tableau was Tammy Faye Baker dabbing those big raccoon-shadowed eyes of hers for the cameras and declaring her eternal affinity for the good Christian Ken.

As always, piety is the last comfort of the corrupt.
How to Give Christianity a Bad Name [JeffMatthewsIsNotMakingThisUp]

Enron Verdict Day (EV Day?) continues! Not surprisingly, the Houston Chronicle has some of coverage of the post-verdict scene. Here’s the Chronicle’s reporting on what memebers of the jury told the press after the verdict. This story runs down the reactions of ex-Enron employees, including one who speculates that Lay and Skilling are aliens from another dimension.