Friday, January 18, 2008

Enron-driven reforms are unraveling

Enron was the beginning, and now it's the end. The company's collapse in late 2001 alerted the investing public to the magnitude of corporate fraud. We realized no haven was safe.
It meant that even the biggest of companies, the bluest of blue chip stocks could be vulnerable to the greed and hubris that lurked within its corporate offices.

After Enron, attitudes began to change. Congress enacted sweeping changes aimed at strengthening internal controls and making top executives more accountable. Enron's victims sued its bankers, recovering some $7 billion in settlements. Now, even as the process begins for distributing that money, the reforms designed to protect investors from another Enronlike scandal are unraveling.

After six years as the avatar of reform, the lessons of Enron are being rolled back, the consequences overlooked, history rewritten to offer an air of legitimacy to the vacuous deals born in Smith Street hubris.

Enron-driven reforms are unraveling

Labels: enron, fraud, supreme court decision

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Wednesday, January 16, 2008

Top court ruling goes against investors

The US Supreme Court put new limits on shareholder suits against a company's banks and business partners in a ruling that may thwart efforts to recoup billions of dollars lost in frauds at Enron Corp. and HealthSouth Corp.
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The justices, voting 5 to 3, threw out a lawsuit by Charter Communications Inc. investors against two of its suppliers, Motorola Inc. and Scientific-Atlanta Inc. The court said the shareholders didn't show they relied on the alleged deception by the suppliers in making investment decisions.

The ruling is a triumph for business groups in what they called their highest priority in the court's 2007-08 term. Trade groups representing banks, accounting firms, and law firms took an especially keen interest, saying their members might present tempting targets for shareholder lawyers.

Top court ruling goes against investors

Labels: fraud shareholder lawsuit, supreme court decision

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