To the People

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or TO THE PEOPLE.

Tuesday, October 17, 2006

Graves Rolling in Houston

Today Enron investors and employees were upset that a federal judge in Houston
wiped away the fraud and conspiracy conviction of Kenneth L. Lay, the Enron Corp. founder who died of heart disease in July, bowing to decades of legal precedent but frustrating government attempts to seize nearly $44 million from his family.
Enron was a fraud operation but I think that there were some major prosecutorial excesses in this case.

First, the DOJ on a flimsy case that was too-late overturned by SCOTUS caused Arthur Andersen to go out of business. The over-zealous indictment resulted in thousands of people losing their jobs and partners in the firm losing their life savings. That is no small thing. You can find the SCOTUS ruling here. Oops, we're sorry. DOJ staff, if only when you are wrong we could cancel your retirement benefits and fire you and make you give up your life savings as well.

The loss of Arthur Andersen hit many US companies hard as they had to change their auditor and the field of competition went from 5 to 4.

Second is how, exactly, do you calculate the losses to shareholders? Do we also calculate their gains on the stock as it shot upward? How many shareholders or employees made a ton of money on Enron's stock?