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More on Enron Ethics

New_century_chartA couple of posts back I wondered about Jeff Skilling and what he is thinking from his jail cell. Jeff got 25 years and Fastow got ten, their crimes was the evaporation of Enron to the detriment of shareholders and retirees.  Gee I wondered, Bear Stearns just accomplished the same thing in their hedge fund, but no one is going to jail, no one pays a fine, and the firm will no doubt pay bonuses to those involved.

Now  makes the Supreme Court case for liability on the part of the Enron Enablers.  

The victims of Enron could not recover from Enron, there was nothing left.  But what about the investment and commercial banks, and law firms that gave the thumbs up all the way to the end?  Note that former Goldman Partner Paulson, now Tsy Sec, is asking Bush to oppose this.  I could not disagree more.  Hardly a month goes by that a brokerage firm is not slapped with a censure or fine for violating fiduciary duty to its clients.   If Bear Stearns or Merrill or whoever markets a fund that loses ALL the investor money, should not these self proclaimed investment geniuses who made money on the deal be penalized?

You might check out the charts of BSC and LEH to see what the market thinks of these guys lately.

What do you thnk? 

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2 responses to “More on Enron Ethics”

  1. Jerry Avatar
    Jerry

    After reading “Final Accounting” By Barbara Toffler, and “The Smartest Guys In The Room,” I certainly understand the frustrations. I read an article once that was just sickening when it revealed all the names the Department of Justice did not bother to go after in an attempt to get to the “key players.” There is a list out there on the web that can list those who got away. There were certainly Board Members who profited not to mention other officers who got away scott clean. They make mention of an “invisible CEO” named Lou Pai who got away with over $200M married an “exotic entertainer” and bought a ranch in CO. (check that). It’s really frustrating. So to answer your question, YES! Go after everybody! Merrill Linch was buying barges from Enron (Merrill Linch is not in the Barge buying business)only to sell them back at a profit to cover up qtr losses! They new exactly what they were getting into and were blinded by profit and participated in transaction that laked any and all substance. No priniciple. I agree. Go after everybody.
    Jerry

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  2. Dennis Elam Avatar
    Dennis Elam

    Thanks Jerry, I believe that the stock market is now entering a bear phase in which asset values decline. No doubt the calls for retribution as assets decline of in the case of the Bear Stearns funds evaporate altogether will grow to be a loud chorus. After 1929 a Panel decided that stock trades should not be accepted by telephone as it allowed too much emotion and volatility in the mix. After the dot.com collapse we got SARBOX requiring statements to be ‘guaranteed’ by the CEO and CFO. What will be the result of continued hedge fund collapses? By the way a hedge fund is nothing more than an unregulated mutual fund. After the 1929 crash investment companies were so out of favor due to losses that there name had to be changed to market them to the public. And so the name investment company was changed to you guessed it, mutual funds.

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