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Enron: Now Even Less Criminal Than Ever

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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]