John Lott's Website: Prison is just one part of the penalty that Enron's Lay and Skilling face

5/27/2006

Prison is just one part of the penalty that Enron's Lay and Skilling face

From today's WSJ (5/27):

With the convictions, Mr. Skilling faces the loss of much or all of his estimated $57 million in assets, say federal authorities. Mr. Lay, who appears to be in much poorer financial shape, also faces the loss of his remaining wealth.

U.S. District Judge Sim Lake, who presided over their trial, can impose fines and order millions of dollars of restitution. Since Mr. Skilling was convicted on one count of insider trading, involving a $15 million sale of Enron stock, the government could move to seize that amount.

Mr. Skilling also faces a substantial claim on his remaining assets by his defense team for legal bills. (Mr. Lay wasn't charged with insider trading.) Both men also still face potentially large civil liabilities from shareholder lawsuits. . . .

1 Comments:

saturdaynightspecial said...: There isn't anything funny about any part of this, nor is there any reason to celebrate that people like Lay and Skilling will or may go to jail. Some employees lost their life savings. I suppose CEO's need to understand one thing: that when they are paid millions (that make them believe they are superstars) to run a company eventually there just may be one important drawback.

Here is some advice to all the superstars: invest in at least one internal audit team (two is better); and make sure these internal auditors are certified (CMA, repeat, CMA). If you pay an internal audit team and you are told the opposite then maybe you can hold your auditors accountable in court. In large entities internal auditors perform rolling audits: when they complete an audit in one section they move on to the next - they never stop auditing AND REPORTING TO MANAGEMENT. A CEO can easily use the internal report and compare it to an audit performed by an external audit performed by public accounting firms. The overwhelming large size of a business entity is not an excuse to claim you didn't know.

And here is some advice to employees about retirement savings (it's been around since the infamous stock market crash): 'never put all your eggs in one basket'.....DIVERSIFY !!!

Advice to all: all the government controls in place to prevent this kind of disaster did not. It proves how much collectivism or fascism disguised as capitalism does not achieve the intended results. It also proves fascism does not work either, and should prove to all the American born nazis here in the US to stop preaching, spreading and cheerleading the benefits of government controls. Since when is failure, after being outlawed, guaranteed to not occur?

This failure is one reason why proponents of guns want their guns to protect them in the event government will not. Government (police) will not protect you 24/7 in every place you go.; 5/27/2006 2:27 AM