Lay, Skilling found guilty...

Good points LU Trader, but.....

The flip-side of the argument is: What made these guys worth so much money in salary and bonuses if all they do is blindly take advice from consultants? Where is the critical thinking and judgement being done?

Put ME in charge, pay me mega-bucks, and I'll hire all the consultants in the world to tell me what to do. Easy.

Sure the Board of Directors is to blame too (when are THEY going to get prosecuted?), but you can't reach a level that high and shuck-off your fiduciary responsibility to a lower-level employee (and that's what consultants are too). How did they get that high up the chain without having to deal with that stuff for years??

Skilling said in his testimony to Congress "I'm not an accountant Senator." (When he said he graduated from Harvard, I could almost feel the other Harvard grads in the room cringe!) So what does that mean - an accountant should always be co-CEO with the CEO to make the tough calls? Or only accountants should be CEOs?

Sorry, it doesn't wash.

Bill Gates earned what he's got. You may not like his business practices. You may hate Windows. But nobody can say he doesn't deserve success - and he's not an accountant. He never tried telling people they "didn't get it" either.
 
Wavestrider I agree.

Even if Lay and Skilling had no idea the "financial engineering" transactions were fraudulent, they are still guilty.

If I perform "emergency" open heart surgery with my kitchen knives on my neighbor, even though I am not even a paramedic, then I am guilty of fraud, recklessness, manslaughter and multiple other charges.

Same thing here, even if these guys had no idea what they were doing they are still guilty of fraud. It's financial malpractice. At the very least they should have refused to get into transactions they didn't fully understand.
 
Quote from buzzy2:

Wavestrider I agree.

Even if Lay and Skilling had no idea the "financial engineering" transactions were fraudulent, they are still guilty.
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I am wondering what will happen to the former CEO and CFO of Fannie Mae? Any thought?
 
Quote from pepper_john:

I am wondering what will happen to the former CEO and CFO of Fannie Mae? Any thought?
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It will be interesting. I think the fraud is similar in some ways, but the difference is Enron stock wiped out all the shareholders and the employee's 401k's. Thus, it created more of a political spectacle which, in turn, enables the "system" to come across as "vigilant watchdogs" for the public interest if/when they convict the wrongdoers.

On the other hand, with Fannie Mae, that's a delicate situation. If you notice, the press has made the whole scandal extremely low priority. Obviously FNM would be an exponentially larger scandal if the stock suddenly dropped to single digits and affected the debt markets in any significant way. I think that trying to bring Raines and his cronies to task would draw to much attention to the malfeasance with the company and tank the stock, which obviously the system really cannot handle right now.
 
"I think that trying to bring Raines and his cronies to task would draw to much attention to the malfeasance with the company and tank the stock, which obviously the system really cannot handle right now."

Funny - I thought the same thing about the AIG scandal. Too much damage to the markets to drag all that was under that rock into the sunlight, so it was minimized.

Which is what I kind-of thought about Long-Term Capital Management when it went belly-up - or the S&L's. If you're going to screw people, make sure you are so big that it becomes a poison-pill to the market. That way you can get away with most of it. Sometimes you even get the taxpayer to bail you out...
 
Quote from pepper_john:

I am wondering what will happen to the former CEO and CFO of Fannie Mae? Any thought?
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nothing. different standards for minorities in both the US and France as well as other western countries.
 
"Even if Lay and Skilling had no idea the "financial engineering" transactions were fraudulent, they are still guilty."

CEO pay and perks has become a 'big evil bubble' which intices these morons to take risky corporate decisions to cash in their stock options. End result is employees, average investors and economy hurts. These both dudes along with those of the WorldCom should be 'buttfucked to death' in the prison.
 
It's pretty simple if you steal someone's life savings (15- 20+yr career )through fraud you should get the death penalty.
 
I had a different understanding of the charges and trial than some posters. I thought the real crux of the charges went to their actions after the company was in deep financial trouble, not the transactions that got them in trouble. It may very well be appropriate to rely on accountants and lawyers regarding setting up off-books partnerships. It will not wash though to tell the public that everything is financially sound when you know it's not. And when you are secretly dumping your holdings. And when your response to a whistleblower is to investigate if you can fire her.

It doesn't make the jury's job any easier, but it's not uncommon for there to be little or no documentary evidence of guilt. If you're smart enough to become a CEO, you are usually smart enough not to write incriminating memos. There was abundant testimony from company officials implicating the defendants. The defendants' actions at the time seemed inconsistent with their claims of innocent mistakes and tended instead to corroborate the witness's allegations.
 
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